Characteristics of Consumer Goods - Essay Example

Characteristics of consumer goods Consumer goods are produced and sold directly to end users ina mass market. They are also referred to as final goods, since they result from a production process. They cannot be used to produce another good but fuel the service industry, through creation of jobs. These goods, mostly household items are required for daily use, for example detergents, cooking oil, beauty products, and food items. Packaging: Their packaging in different forms and sizes depend on market type, those targeting low income areas like the slums are available in small units, so that the target market can afford. This however does not mean that the said target market are of lower consumption level compared to high income areas residents, the only difference with high income consumers is that they frequent shops more often because they purchase in small quantities. High income consumers on the other hand usually buy their goods in large quantities all at once. But since buying in bulk decreases the average cost, consumers buying in small units pay more for the similar good eventually (McCracken, 1988, p21). The price of bathing soap packed by the dozen for example, is cheaper than buying them in singular units. Cost: Consumer goods are generally low priced compared to capital goods; this is because they are available in small units, have a lower cost of production, as well as consumer protection laws that guard against arbitrary increase in prices. The reason for these protective laws is that their price changes have an overall effect on inflation. Distribution: Consumer goods have a wide distribution network. After the manufacturing process, these goods are sent to end users through wholesalers and retailers. For example, detergents received by wholesalers are packaged in bales, upon distribution to the retailers, these bales are opened and the goods repackaged into smaller and more economical units. A picture showing a variety of consumer goods According to McCracken (1988, p. 4), consumer goods move at high volumes since sales are made to a mass market. Distribution is efficient because delays can cause shortages in the entire system which has high price implications on the consumer. Due to this massive production and distribution, the average profit margin on a single product is usually minimal, but the overall turnover is high. The margin realised from the sale of a car is big compared to that of a food item, but stock movement in the car business in slow. Importance of product knowledge to successful marketing Product knowledge is vital across all the production and distribution stages since it is a determinant of the actual sales volumes. It is difficult to sell a product to a market that is not aware of the benefits accrued from its consumption. Having a good knowledge of individual products within a retail outlet can help the management adopt advertisement and sales promotion strategies to woo clients. This is so because the sales team will have enough communication materials to inform potential clients on the benefits of the product. Being well informed on product benefits helps in handling complaints from customers, who normally make their sales decisions based on propaganda and stereotypes. Product knowledge helps the sales team overcome these challenges by giving factual product information. If employees in a store are aware of the product they are selling, for example, then they gain confidence and can easily articulate to the client the aforesaid benefits. Employees with little or no product knowledge tend to avoid enquiries from the customers because they cannot clarify on its benefits over others. A confident sales team is central to attraction of customers in any shop or business. Product A product is a good or a service that is manmade or produced by natural means, and offered to the market for consumption. It moves across distribution lines from the producers of raw materials to wholesalers, who distribute it to the retailers. The retailers then sell it to the consumers, who are at the end of the chain. As it moves across these stages, it changes in form and size according to the market specifications. Most products are tangible goods but others are ideas and services. A detergent is a consumer good that is commonly used in many households. In the same notion, a computer specialist can come up with business solutions software and sell it to his clients to aid them prepare their financial statements. Both of these are products but are not similar in nature and form. Product line This is all the products manufactured by the same company, mostly offered to a similar market or consumer groups. A company can have several product lines and continuously re-invent itself by introducing other lines to respond to the changing market needs. Beiersdorf is a global beauty products company which has a wide product line with the same brand name; Nivea. It has shampoos, moisturizers, beauty oils, concealers, lotions, and powders to its name. Companies manufacturing or selling consumer goods expand by increasing goods offered in the same product line, this gives them economies of scale in production and distribution of the goods thereby increasing their portfolio (Product knowledge, 1977, p. 97). Product mix This is a combination of goods produced or distributed by the same company. Retail outlets increase their product mix to increase their market share, and obtain economies of scale in marketing (Kotler & Armstrong, 2012, p.13). This is because individual products in a company like Shoprite are marketed with the company brand name thereby reducing overhead costs in advertising. An expanded product mix also increases the risks for the company through competition; however, it is beneficial if done in response to market demand. A business outlet involved in sale and distribution of food items has the food label as its overall product. The food is categorised under fresh vegetables, dry food, drinks and fresh juice. This is the product mix that the company has in its line of trade. The individual categories for example fresh juice are the product lines that the business deals in. The product lines are what determines the nature of the business and they form the product mix. Take-away food Take away foods are packaged in bio degradable materials that can be recycled to avoid environmental destruction and to discourage littering. Its packaging material should not be a heat transfer material that can cause unnecessary discomfort to the user by over-heating. It should also be opaque to hide the content (Kerry & Butler, 2008, p.41). Indoor pot plants They should be stored in strong but well ventilated packages to prevent them from mishandling that can result in their destruction. The package should be easy to carry and move during transport and should be green in colour to show the nature of the content at a glance. Handcrafted pottery for the tourism trade These are very fragile items in that they can be easily damaged through mishandling. They have to be packaged in a transparent cover that can show the content at a glance without necessarily opening to minimize wear and tear, this packaging should reflect the culture of the people making the product for ease of identification. Cut flowers Cut flowers are stored in biodegradable papers that can be recycled for other uses. The packaging material must preserve the freshness of the flowers inside, meaning it should not be a heat absorber, but a conductor. Cut flower’s packaging material must have bright and attractive colors to emphasize on its symbol. Important points in product presentation Relevance: The presentation should be relevant to the particular customer or market. The way a product is presented and displayed must be self explanatory to the customer, and must address their particular needs. During or before the presentation, the sales team has to ask the customers questions relating to the product so they can be able to prepare and structure their responses appropriately. Information: According to Clarke & Slabbert (1987, p. 7), all the parties involved in the product presentation must be well informed about the product and presentation schedules. The managers must constantly give information to the sales team, clients and partners about the whole exercise. This ensures that there is orderliness in the process and ensures timelines are met. Use of visual aids: The presentation must be interesting by incorporating other visual images for example animation and graphics. These create an ease of understanding by the prospective customer. Customers, especially the young ones understand graphical representations better that the wordings. Clarity: The presentation has to be clear and straight to the point to avoid time wastage in being wordy. Clarity of purpose is therefore beneficial to both the sales team and the customer. Clarity is also reinforced using visual images and highlighting on the benefits rather than the features of the product. Belief: The sales team must believe in the product they are marketing in order to be sincere about what they are talking about. This is what determines the confidence they will employ when presenting the product. Prospective customers listen to presenters who know what they are talking about and those who believe in the product. Use of dramatization to explain the use and benefits of the product makes the customers gain a deeper understanding of the product. This is because practical processes are easily memorised and understood than merely reading out the facts without explaining. Bibliography Kerry, J., & Butler, P. (2008). Smart packaging technologies for fast moving consumer goods. Chichester, England: John Wiley. Clarke, D. D., & Slabbert, J. O. (1987). Product presentation. Bonn- Bad Godesberg: Kessler, Verl. für Sprachmethodik. Kotler, P., & Armstrong, G. (2012). Principles of marketing (14th ed.). Boston: Pearson Prentice Hall. McCracken, G. D. (1988). Culture and consumption: new approaches to the symbolic character of consumer goods and activities. Bloomington: Indiana University Press Product knowledge. (1977). Scranton, Pa.: ICS Employee/Management Development. Read More