consumer goods

What is a consumer product?

Consumer goods are products that ordinary consumers buy for consumption. Also known as the final product, a consumer product is the end result of production and manufacture, the item that consumers will see on store shelves. Clothing, food, and jewelry are all examples of consumer goods. Basic or raw materials, such as copper, are not considered consumer products because they must be transformed into usable products.

key takeaways

  • Consumer goods or final products are goods sold to consumers for their own use or enjoyment, not as a means of further economic productive activity.
  • From an economic point of view, consumer goods can be classified as durable goods (used for more than three years), non-durable goods (used for less than three years), or pure services (consumed immediately when produced).
  • For marketing purposes, consumer products can be grouped into different categories based on consumer behavior, how consumers buy goods, and how often consumers buy goods.

Learn about consumer products

Consumer goods are goods sold to consumers for home or school use or recreational or personal use. There are three main types of consumer goods: durable goods, non-durable goods, and services.

Durable goods are consumer goods that have a long lifespan (ie, more than three years) and are used over time. Examples include bicycles and refrigerators. Non-durable goods are consumed in less than three years and have a short lifespan. Examples of non-durable goods include food and beverages. Services include auto repairs and haircuts.

Consumer goods are also called end products or end products because they are the final output of a production process that takes place over time. Entrepreneurs and businesses combine capital goods (such as machinery in factories), workers’ labor, and raw materials (such as land and base metals) to produce consumer goods for sale. Goods that are used in these production processes but are not themselves sold to consumers are called produced goods.

The Consumer Product Safety Act was created in 1972 to oversee the sale of the most common consumer products. The act created the U.S. Consumer Product Safety Commission, a five-appointed committee that oversees product safety and issues recalls of existing products.

Consumer Goods Marketing

Convenience items are those items that are frequently consumed and can be purchased at any time. These goods are mainly sold by wholesalers and retailers and include items such as milk and tobacco products. Convenience items can be further subdivided into primary convenience items (meeting a customer’s basic needs) and impulse convenience items (non-priority items, such as cigarettes).

Shopping items are items that require more thought and planning to buy than convenience items. Shopping items are more expensive, more durable and last longer than convenience items. Examples include furniture and televisions.

Specialty consumer goods are rare and often considered luxury goods. Purchases of special items are reserved for shoppers who can afford to make a purchase. Marketing jobs are geared towards niche markets, usually high society. These products include furs and fine jewelry.

Non-demand consumer goods are readily available, but only available to a few market members for purchase. These items are generally not repurchased and are often used to meet specific needs, such as life insurance.


One of the largest consumer goods groups is called FMCG. This segment includes non-durable goods such as food and beverages, which move rapidly along the chain from producers to distributors and retailers to consumers. Companies and retailers like this segment because it contains the fastest-moving consumer goods in stores, offering high shelf space turnover opportunities.

From a marketing perspective, consumer products can be divided into four categories: convenience, shopping, specialty, and non-sale items. These categories are based on consumer buying patterns.

Marketers divide consumer goods into four categories based on consumer buying patterns: convenience, shopping, specialty, and non-demand.

Consumer Goods ETFs

The largest consumer ETF is the iShares US Consumer Staples ETF (IYK). Founded in 2000 as the iShares US Consumer Products ETF, it held 58 stocks and had net assets under management (AUM) of $954 million as of February 2022. The fund originally tracked the Dow Jones U.S. Consumer Staples Index, but has changed in 2021 to track the Russell 1000 Consumer Staples RIC 22.5/45 Cap Index. The largest holdings are Procter & Gamble, Coca-Cola, Pepsi, Philip Morris and CVS.

In addition to the Russell 1000 Consumer Staples Index, several of the largest companies are missing. Nestle, the world’s largest consumer goods company as of 2021, is one company not represented in the ETF holdings.

Privately traded consumer goods

The index also does not include privately traded consumer goods companies. The two largest privately held consumer goods companies are Mars and SC Johnson. Mars is best known for its candy and chewing gum brands, while SC Johnson is a home-focused consumer goods company with brands such as Pledge, Raid, Ziploc and Windex.

What are the types of consumer goods?

There are three main types of consumer goods: durable goods, non-durable goods, and services. Durable goods with a long life, such as appliances and tools. Non-durable goods such as packaged food and beverages are consumed in less than three years. Services include intangible goods such as repairs, cleaning and consulting.

How do marketers classify consumer products?

Based on consumer buying patterns, marketers divide consumer goods into four categories: convenience, shopping, specialty, and non-demand. Convenience items are those items that are frequently consumed and easily purchased, such as packaged foods and beverages. Shopping items require more planning and tend to be more expensive and durable than convenience items. Specialty consumer goods, such as jewelry, are often considered luxury items that only those wealthy enough can afford. Finally, unsought consumer goods are readily available but rarely purchased.

What is the difference between capital goods and consumer goods?

Capital goods, such as buildings, machinery, equipment, vehicles, and tools, are the physical assets that companies use during the production process to manufacture products and services that consumers use later. Capital goods are not manufactured goods; rather, they are used to make finished goods. Consumer goods are products that are used by consumers and have no future production use. Some commodities can be considered physical or capital goods, depending on how they are used.

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