A final goods or consumer goods is a commodity that is used by the consumer to satisfy current needs or needs, as opposed to intermediate goods which are used to produce other goods. A microwave oven or a bicycle is a final good, while some parts of it are purchased to manufacture intermediate goods .
When used in measures of national income and production, the term “final goods” includes only new goods. For example, gross domestic product (GDP) based on resale of goods excludes items counted in the previous year to prevent double counting . In that context, the economic definition of goods also includes those commonly known as services .
Manufactured goods are those goods that have been processed in some way. They are different from raw materials but include both intermediate goods and final goods.
Law
There are legal definitions. For example, the United States Consumer Product Safety Act has a broad definition of a consumer product , which begins:
Consumer products.—The term “consumer product” means any article, or any constituent part thereof, produced or distributed for sale to a consumer in or near (i) a permanent or temporary home or residence, a school , or entertainment, or otherwise, or (ii) in a permanent or temporary home or residence, a school, recreation or otherwise, for the personal use, consumption or enjoyment of a consumer; but such term does not include— (a) any article which is not customarily produced or distributed for sale to a consumer, or for use or consumption, or enjoyment,
It then lists eight additional exclusive exclusions and other details.
Endurance
Final goods can be classified into the following categories:
- durable goods
- Short-lived items
- Services
Consumer durables typically have a significant lifespan, which is at least one year depending on the guarantee or warranty period. The maximum life depends on the durability of the product or goods. Examples include equipment, cars and boats. On the other hand, capital goods , which are tangible in nature, such as machinery or buildings or any other equipment that can be used in the manufacture of the final product, are durable goods with a limited lifetime that are determined by the manufacturers before their sale. Huh. The longevity and often-high cost of durable goods usually cause consumers to postpone spending on them, which makes durable goods the most volatile (or cost-dependent) component of consumption.
Consumer non-durable goods are purchased for immediate use or for very immediate use. Generally, the lifespan of non-durables ranges from a few minutes to three years: food, beverages, clothing, shoes and gasoline are examples. In everyday parlance, non-durable goods are consumed or “used”.
Consumer services are intangible in nature. These cannot be seen, felt or tasted by the consumer but still give satisfaction to the consumer. They are also indivisible and variable in nature: thus they are produced and consumed simultaneously. Examples are haircuts, medical treatments, auto repairs and landscaping.
Buying habits
Final goods can be classified into the following categories, which are determined by the buying habits of the consumer:
- convenient material
- shopping goods
- specialty goods
- unsought goods
Convenience goods, shopping goods and specialty goods are also known as “red goods”, “yellow goods” and “orange goods”, respectively, under the yellow, red and orange goods classification system.
Convenient material
Convenience goods are consumed regularly and are readily available. Generally, convenience goods fall under the category of non-durables such as fast food, cigarettes and tobacco with low value. Convenience goods are mostly sold by wholesalers or retailers in order to make the goods available to consumers in larger quantities. Convenience goods can be further divided into main convenience consumer goods and impulse convenience consumer goods.
Prime Convenience Consumer goods are the basic needs of the consumer. These goods are readily and in large quantities available: milk, bread, sugar, etc.
Impulse convenience consumer goods are not on the priority list of the consumer. They are bought on an impulse basis , without any prior planning : potato wafers, candies, ice cream, cold drinks, etc.
Consumer goods shopping
Buying consumer goods are those goods that take a lot of time and proper planning before making a purchase decision; In this case the consumer makes a lot of selections and comparisons based on various parameters like cost, brand, style, comfort etc. before buying an item. Shopping goods are costlier than convenience goods and are durable in nature. Consumer goods companies usually try to set up their shops and showrooms in active shopping areas to attract the attention of customers and their main focus is to do more advertising and promotion to attract more customers.
Examples include clothing items, TVs, radios, shoes, household items, etc.
Specialty consumer goods
Specialty goods are unique in nature; These are unusual and luxurious items available in the market. Special goods are mostly bought by the upper classes of the society as they are expensive in nature and difficult for the middle and lower classes. Companies advertise their goods by targeting the upper class. These goods do not fall under the category of necessity; Rather they are bought on the basis of personal preference or desire. Brand name, exclusivity and special features of an item are the key features that attract customers and compel them to buy such products.
Examples include antiques, jewelry, wedding dresses, cars, etc.
Unwanted consumer goods
Unwanted goods neither belong to the need group of the consumer goods list nor belong to the specific goods. They are always available in the market but very few are bought by the consumers, either on the basis of their interest or their need for some specific reason. The general public does not often buy such goods.
Examples include snowshoes , firefighters , flood insurance , etc.
Mergers and acquisition
In the consumer products sector, 107,891 deals have been announced between 1985 and 2018, amounting to a total value of approximately US$5,835 billion. 2007 was the year with the largest value (US$4,888 billion), followed by a steep decline (-70.9%) in 2009. [2] This is now the second major M&A wave in the consumer products sector, after the first wave in 2007, and is expected to decline.
