We explain what consumer goods are, how they are produced and classified. Also, what are its characteristics and some examples.
What are Consumer Goods?
Consumer goods are understood as all the products and merchandise that a nation or a sector produces to satisfy a specific need of the population and that are acquired by its public for said purposes. Some consumer goods are food, footwear, furniture, real estate, electronic devices, etc.
They are distinguished from production goods or capital goods in that they are made to feed other production processes, as is the case of certain raw materials , semi-processed goods, etc. Consumer goods (or final consumer goods) go directly to the final consumer , so they represent the last link in the production chain.
All consumer goods have a price determined by the costs of their production , distribution, marketing and promotion, so that all the sectors involved in satisfying the specific need of the client receive their portion of the stipulated payment. Consumer goods can be material goods (such as food) or immaterial goods (such as a service).
Characteristics of consumer goods :
Economic goods are not found in their natural and abundant state.
Economic goods or scarce goods are understood as those that must be produced and obtained in exchange for a price determined by their production chain.
They are not in a state of natural abundance in the world , and therefore are considered scarce.
All consumer goods are economic goods.
Free goods are distinguished from scarce goods in that they are naturally abundant , therefore they are not part of any production chain and cannot be traded.
These goods have no owner or price , although they also serve to satisfy certain needs. For example, breathing air is a free good.
Types of consumer goods
Final goods go directly to the consumer.
Consumer goods are classified based on the following criteria:
- Based on your time of use. They can be durable goods (exceeding 3 years since their acquisition), which do not sell out as quickly and do not require repurchase; non-durable goods, which run out in a close period of time that exceeds one day; and perishable goods, which cease to be useful very quickly after consumption.
- Depending on the degree of completion. In this case we are talking about final goods, those that go directly to the consumer , and intermediate goods, which must go through yet another manufacturing process before being marketed.
the production chain
The tertiary sector is responsible for the distribution of goods.
Consumer goods are the final product of a chain in which all the necessary actors intervene so that the good is produced , distributed and sold to its natural consumers. This process is known as the production chain and comprises the following:
- Primary sector. It is in charge of extracting the raw material, refining it if necessary, and starting the entire circuit. Without that raw material there would be no product to make.
- Secondary sector. It is the area dedicated to the intermediate tasks of transformation, processing and manufacturing. Its final object is a consumer good (ready to be marketed) or an intermediate good (which will feed another instance of the same secondary sector).
- Third sector. It is the sector in charge of the distribution and commercialization of the product, that is, the one that takes it to the stores so that the consumer obtains it.
supply and demand
The principle of supply and demand sets market prices.
Given that the same consumer good is produced by different actors in the same society , that is, different manufacturers can dedicate themselves to the same product , a competitive relationship is established between them for the attention and preference of the consumer. This is known as supply and demand: the supply of ready-to-eat products and the demand from consumers.
Among other things, this principle is responsible for setting the prices of consumer goods: the higher the demand and the lower the supply, the price will rise; and the lower the demand and the higher the supply, it will go down.
The sum of all the actors and competitors in the commercialization of consumer goods results in the establishment of a market : a consumer community in which producers compete for customer favoritism and in which all activities are carried out. commercial transactions involving the consumption of goods and services.
Producers promote their goods to encourage consumption.
Despite not intervening in the production of consumer goods, the marketing or promotion of the product also influences its reception by consumers and may be responsible for one consumer good being more in demand than another.
Since producers want to enjoy the favoritism of consumers, they invest part of their profits in promoting their goods above the competition, encouraging their consumption through various persuasive strategies.
Capital goods are those durable goods that, once consumed, are used for the production or management of goods and services , that is, they form part of the capital of a productive company . Such is the case of machinery, electronic equipment, etc.
Cigarettes are consumed immediately as an emerging need.
Convenience goods or products are relatively low-priced consumer goods and are consumed immediately , with minimal effort, as part of impulse purchases, emergent needs, or daily consumption habits, such as cigarettes.
Examples of consumer goods
Examples of consumer goods are:
- Food. Fruits, dairy, meat, fish, chicken, milk, consumables in general.
- Tools. Screwdrivers, hammers, knives, forks, wooden pallets , brushes, brushes and all kinds of useful accessories.
- Clothing. Accessories, footwear, clothing, underwear.
- Textiles. Carpets, sheets, towels, curtains, cushions.
- electronics. Computers, cell phones, stereos .
- Editorials. Books, magazines, brochures, notebooks.
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