A consumer product is a finished good purchased by an individual or household for personal use. These items, which we buy for daily needs like hygiene, entertainment, or sustenance, represent the final link in the supply chain. They are intended for direct consumption by the end-user.
Defining a Consumer Product
A consumer product is intended for the final purchaser for personal, non-commercial use, not for manufacturing or resale. The distinction lies in the purpose of the purchase. For instance, a laptop bought for personal tasks is a consumer product.
In contrast, industrial products are purchased by companies for their operational needs or to produce other goods. If a company buys laptops for its employees, those are considered industrial products. The physical item is identical, but its intended use changes its classification.
The demand for industrial goods is often derived from the demand for consumer goods. A bakery buys industrial ovens because consumers are buying bread. The customer base for industrial products is smaller and more concentrated than the vast, dispersed market for consumer products.
Types of Consumer Products
Products are categorized based on consumer buying habits and the effort involved in the purchase decision. The four main types are convenience, shopping, specialty, and unsought products.
Convenience Products
These are low-priced items that consumers purchase frequently and with minimal effort, such as milk, bread, and soap. Because they are often bought on impulse or out of habit, their marketing focuses on extensive distribution. Brand recognition is built through mass advertising and in-store promotions.
Shopping Products
Shopping products are items consumers buy less frequently, spending more time and effort comparing factors like quality, price, and style. Examples include airline tickets, furniture, and electronics. Consumers may visit multiple stores or browse online to gather information for these more expensive goods. Marketing emphasizes product differentiation through advertising and personal selling to highlight unique benefits.
Specialty Products
Specialty products have unique characteristics or brand identification that compel buyers to make a special purchase effort. Consumers actively seek a specific brand or item, such as a luxury car or a designer watch, rather than comparing options. These products are sold through exclusive dealers at high price points, and their marketing focuses on building a powerful, exclusive brand image.
Unsought Products
Unsought products are goods the consumer does not know about or normally consider buying. Purchases are driven by necessity or persuasion, not proactive desire, such as with life insurance or funeral services. Since consumers are not actively looking for these items, marketing requires aggressive advertising and personal selling to create awareness and convince people of the need.
The Importance of Classification
A product’s classification directly shapes a company’s business strategy. The category informs the marketing mix, including pricing, promotion, and distribution. Misclassifying a product can lead to ineffective marketing and lost sales.
For example, a convenience product requires wide distribution and competitive pricing, while a specialty product thrives on exclusive distribution and high pricing. A shopping product needs a more selective distribution to allow for comparison, and an unsought product requires marketing that builds awareness for when a need arises. Aligning strategy with product type is necessary to connect with the target consumer.
Regulation of Consumer Products
Because consumer products are for public use, ensuring their safety is a government concern. In the United States, the Consumer Product Safety Commission (CPSC) is the primary federal agency for this oversight. Established in 1972, the CPSC’s mission is to protect the public from unreasonable risks of injury or death from consumer products.
The CPSC has authority over thousands of items, developing safety standards, banning hazardous products, and facilitating recalls. The agency also researches potential hazards and educates consumers. Certain categories, such as automobiles, food, and drugs, are regulated by other specific agencies like the National Highway Traffic Safety Administration and the Food and Drug Administration.