All of life can be broken down into a series of transactions. And a majority of these transactions consist of exchanging goods in return for several favorable alternatives such as cash, credit, or different products.
Most of the manufactured products can be categorized either into consumer goods or industrial goods.
Consumer Goods vs Industrial Goods
Consumer goods are products that individuals purchase for personal use. Industrial goods are products that are used in the production of other goods and services but are not considered capital goods. Consumer goods are intended for immediate use by individuals, unlike industrial goods.
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Consumer goods, true to their name, are goods that are produced with the aim to satisfy or fulfill consumer wants and desires. These are products that directly help quench the want or need of the customer.
They are sold through several means and are ultimately marketed to the customers for their final consumption. A few examples of customer goods include food and clothing.
Unlike their counterpart who are directly consumed or used, industrial goods are used in the further production of goods. Owing to this reason, they are known as intermediate goods.
According to their name, these goods are used in industries, businesses, and other related organizations for the production of goods. Raw materials, machinery, or similar components fall under the category of industrial goods.
|Parameters of Comparison||Consumer Goods||Industrial Goods|
|Definition||Consumer goods refer to those goods that are produced to satisfy the wants of the ultimate consumers.||Industrial goods refer to those goods that are used in the making of other goods.|
|Buyers||There exist several buyers whose locations are scattered across varied regions.||The buyers are few and can be found in concentrated regions.|
|Elasticity||They have an increased level of demand elasticity.||The elasticity for the demand for industrial goods is fairly low.|
|Value||The value of consumer products is low, by comparison.||The value of the purchases bought and sold is high.|
|Influences||The market is affected by the change in consumer behavior.||It is typically affected by technological or global changes.|
What is Consumer Goods?
As the name suggests, consumer goods refer to goods that are produced to satisfy the customer’s wants and needs.
These are final goods that are purchased in order to fulfill the customer and provide them with satisfaction.
Due to the necessity of these types of goods, they are used across wide expanses of areas. They are bought in singular or a small amount and typically have a lesser value.
There exist a large number of sellers dealing in consumer goods. These sellers could be wholesalers, manufacturers, or retailers who can be found in all parts of the country.
Similar to the sellers, there exist an extended amount of buyers for these products. They are the final consumers of this product who purchase this product to satisfy their desire.
They are alternatively known as final goods or end products. There exist several types of consumer goods, namely, durable, non-durable, and customer services.
There are exist shopping goods, convenience goods, specialty goods, and unsought goods that are typically classified under consumer goods.
Consumer goods have a high elasticity of demand and are generally influenced by human emotions.
The demand for these products is direct as there exist no other facts than the satisfaction of the customer need that induces their purchase.
What is Industrial Goods?
Industrial goods hold their definition in their name. They are goods that are used for the further making or production of other goods.
This makes industrial goods the intermediate goods that are required in the manufacturing process of goods.
Industrial goods typically refer to the demand for the customer goods that are needed to be produced.
They are of two types, namely support goods and production goods. Goods that are applied in the production of a final customer product are termed production goods. And goods that help in the process of production of consumer goods are called support goods.
Industrial goods are often produced to help further production industries, businesses, and related organizations. Industrial goods include raw materials, machinery, components of a machine, etc., that help in the production process.
The number of buyers present is of a lower number. Similarly, the seller base is relatively low. And the cost of these products is high due to their infrequent purchase and sale.
They have a demand that is derived from the need for consumer goods.
They have inelastic demand when compared to their counterpart. The factors influencing the demand and supply of these goods are based on huge technological, legal, and global factors.
Main Differences Between Consumer Goods and Industrial Goods
- Consumer goods refer to final products that satisfy the needs, desires, and wants of a consumer. Industrial goods refer to products that help make or manufacture other goods.
- The demand for consumer goods is direct, whereas industrial goods are derived.
- The number of buyers and sellers involved in purchasing and selling consumer and industrial goods is high and low, respectively.
- The goods purchased by the consumers are low in quantity and of little value. Comparatively, industrial goods have a high value.
- The factors influencing the purchase of consumer goods lie on its buyer. The factors influencing the purchase of industrial goods are technological, legal, or global factors.
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Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.