MAJOR DIFFERENCES BETWEEN CONSUMER GOODS AND INDUSTRIAL GOODS

INTRODUCTION

The market, as an entity, comprises of different products. However, these products may be difficult to understand for consumers. Therefore, for conveniences, better identification and differentiation,  producers and marketers have decided to classify goods in two forms, namely; consumer goods and industrial goods.

Product: A product can be refer to anything tangible and intangible that is capable of satisfying human wants.

Consumers goods: Consumer goods are goods purchase for immediate consumption or for household use. These goods are distinguish among convenience, shopping specialty, and unsought goods.

The goods which are bought for household use, personal use, or family use from retail stores are called “consumer goods”. The consumers have certain buying habits and based on these habits the consumers goods are divided into three different sub-categories:

·        Shopping goods

·        Specialty goods

·        Convenience goods.

The consumer goods can also be differentiated or categorized into durable and non-durable goods.

Durable goods are goods which have longer durability such as furniture etc. Whereas, non-durable goods include food, supplies for school etc.

1.   Convenience Goods: Goods which the consumer wants to buy with maximum convenience are mostly non-durable, bought in small quantities, are of low value, and frequently purchased are called “convenience goods” like milk, bread etc. These goods which are planned buys are called “staple goods” where are goods like newspapers, candies, etc which are bough impulsively and where not planned are called “impulse goods”.

2.   Shopping goods: The goods which are of higher value, purchased infrequently after a lot of comparing and deliberation by the consumer are called “shopping goods” like televisions, refrigerators etc.

3.   Specialty goods: Goods which are special for a consumer for which he has planned a lot and wants at all costs are called “specialty goods” like clothing of a special brand, automobile of a particular brand, jewellery etc.

è Industrial Goods: Goods which are bought by companies to produce other products which are sold later are called “industrial goods”, these goods can be directly or indirectly used in the production of goods which are classified according to their usage instead of consumer habits. The durable goods are called “capital items” as they are of very high value and non-durable goods are called “expense items” and are usually used within a year. They have been categorized into five subcategories:

·        Industrial supplies: These include frequently bought expense items like computer paper, office supplies, light bulbs which help in the production of a final product are called industrial supplies.

·        Installations: Capital items used directly in making other goods are called “installation goods” like machine tools, conveyor systems commercial ovens etc.

·        Fabricated parts and materials: Goods which are used in a final product without processing are called “fabricated parts” like batteries, spark plugs, etc, used in automobiles. Items which require processing before using in final products are called “fabricated materials” such as steel, fabric for upholstery etc.

·        Accessory Equipment: Accessory equipment are capital items which have a shorter life and are less expensive than installations such as hand tools, desk computers etc.

·        Raw Materials: Products bought in their raw form like crude oil, iron etc which need to be processed before producing any goods are called “raw materials”.

Differences Between Consumer And Industrial Goods

Given below are some of the differences between consumer and industrial goods.

1.   The consumer goods are those which are meant for final consumption by the consumer or in simple words they are used by the consumers directly while industrial goods are those which are not used by the consumers directly but these goods are used for the production of consumer goods.

2.   Bread, Soap, furniture are some of the examples of consumer goods while lubricants, copper, timber, tools etc are some examples of industrial goods.

3.   While the number of customers for consumer goods is very large but the quality purchased by them is less whereas the number of customers for industrial goods is less but they purchase the quantities in bulk.

4.   The demand for consumer goods is autonomous demand as these goods are demanded for ultimate consumption while the demand for industrial goods is derived demand as these industrial goods are used for the production of consumer goods.

5.   While the market in which the companies can sell consumers goods is large because of large number of customers whereas in case of industrial goods the market is small because of less number of buyers of such goods.

CONCLUSION

The major difference between these is that consumer goods are final goods while industrial goods are a factor of production. This means that consumer goods are simply used by the consumer while industrial goods are used to create other goods. For example, the cloths that are wear are consumer goods. So is our home computer or our mobile phone. By contrast, an industrial goods is something like a welding machine or a drill press or the robots that are used to make cars. The difference, then, is really in what they are used for.

REFERENCES

1.   M.O. ODE; B.O Duru NNEBUE; C.M. Mathew (2011): Fundamentals of Marketing Principles and Applications, 6^th edition, Divine computers, Kaduna.

2.   Amber, T. (2003): Marketing and the Bottom Line. The New Methods of Corporate Wealth, 2^nd ed. Pearson Education, London.

3.   Internet “Google”

4.   Abbah Adikwu Linus: Basics to purchasing Management 1^st edition Ray Product, Makurdi.