Industrial Goods vs Consumer Goods

Goods may be classified as consumer goods or industrial goods, depending on their intended use and target market. Consumer goods are products meant for final consumption by the ultimate consumer, while industrial goods are meant to be used in the production of other goods and services or any other business activity. In this article, we will discuss the differences between consumer goods and industrial goods.

Consumer Goods

Consumer goods and services refer to products meant for final consumption by the ultimate consumer. Examples of consumer goods include bread, butter, soap, toothpaste, while consumer services include hair cuts and personal healthcare.

Number of Customers

The number of customers for consumer goods is often very large. This is because consumer goods are demanded by a large population and target a broad market segment.

Demand

The demand for consumer goods is autonomous demand, meaning that they are demanded by the ultimate consumer directly. On the other hand, the demand for industrial goods is derived demand, meaning that the demand for one good is a result of the demand for another good.

Market Research

Consumers often do not conduct extensive research or analysis of their demanded products, while in the case of industrial goods, an extensive study is done. This is because industrial goods are purchased for commercial production or other business activities, and their choice is often more critical and subject to more scrutiny.

Quantity Demanded

In the case of industrial goods, the quantity demanded per customer is often high. This is because industrial goods are purchased for commercial production and the volume of production often requires a large quantity of inputs.

Market

The market for consumer goods is large and open, while the market for industrial goods is often limited. This is because industrial goods target specific industries and commercial production, rather than the general population.

Industrial Goods

Industrial goods refer to goods that are meant to be used in the commercial production of other goods and services or any other business activity. Raw materials, engines, lubricants, tools, etc. are some examples of industrial goods.

Demand

The demand for industrial goods is derived demand, meaning that the demand for one good is a result of the demand for another good. This is because industrial goods are inputs in the production of other goods and services.

Market Research

In the case of industrial goods, an extensive study is done before purchasing. This is because the choice of industrial goods is critical for commercial production and subject to more scrutiny.

Quantity

Demanded The quantity demanded per customer is often high for industrial goods. This is because they are purchased for commercial production and the volume of production often requires a large quantity of inputs.

Market

The market for industrial goods is often limited, as they target specific industries and commercial production, rather than the general population.

Thus, consumer goods and industrial goods are two distinct types of goods with different intended uses, target markets, and demand patterns. Understanding the differences between consumer goods and industrial goods is crucial for businesses and individuals who seek to understand the workings of the market and make informed decisions about the products and services they purchase.

Month: Current Affairs - August, 2013