Fast-moving consumer goods

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Soft drinks are FMCGs

Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) are products that are sold quickly and at relatively low cost. Examples include non-durable goods such as soft drinks, toiletries, and grocery items. Though the profit margin made on FMCG products is relatively small, more so for retailers than the producers/suppliers, they are generally sold in large quantities. FMCG is probably the most classic case of low margin/high volume business. Many of the players on the retailer side such as Walmart, Carrefour, Choithram, Tawseel, Sheel, Walgreens or Metro Group and supplier side are among the largest and most recognized global companies.

Fast-moving consumer electronics are a type of FMCG and are typically low priced generic or easily substitutable consumer electronics, including mobile phones, MP3 players, game players, and digital cameras which are of disposable nature.

Global leaders in the FMCG segment include Johnson & Johnson, Colgate-Palmolive, Anheuser-Busch InBev, Henkel, Kellogg's, S.C. Johnson, Dr Pepper Snapple Group, Beiersdorf, Mars Inc., Heinz, Nestlé, Reckitt Benckiser, Unilever, Procter & Gamble, L'Oréal, The Coca-Cola Company, General Mills Inc., PepsiCo, Mondelēz and Kraft Foods.[1]

Scope

The term FMCGs refers to those retail goods that are generally replaced or fully used up over a short period of days, weeks, or months, and within one year. This contrasts with durable goods or major appliances such as kitchen appliances,which are generally replaced over a period of several years.

FMCG have a short shelf life, either as a result of high consumer demand or because the product deteriorates rapidly. Some FMCGs—such as meat, fruits and vegetables, dairy products, and baked goods—are highly perishable. Other goods such as alcohol, toiletries, pre-packaged foods, soft drinks, and cleaning products have high turnover rates. An excellent example is a newspaper—every day's newspaper carries different content, making one useless just one day later, necessitating a new purchase every day.

The following are the main characteristics of FMCGs:[2]

  • From the consumers' perspective:
    • Frequent purchase
    • Low involvement (little or no effort to choose the item – products with strong brand loyalty are exceptions to this rule)
    • Low price
  • From the marketers' angle:

ISIC definition

The retail market for FMCGs includes businesses in the following International Standard Industrial Classification (ISIC) (Revision 3) categories[3][4]

  • ISIC 5211 retail sales in non-specialized stores
  • ISIC 5219 other retail sale in non-specialized stores
  • ISIC 5220 retail sale of food, beverages and tobacco in specialized stores
  • ISIC 5231 retail sale of pharmaceutical and medical goods, cosmetic and toilet articles
  • ISIC 5251 retail sale via mail order houses
  • ISIC 5252 retail sale via stalls and markets
  • ISIC 5259 whole sale goods

Supplier industries for FMCGs include

  • 1511 meat and meat products
  • 1512 fish and fish products
  • 1513 fruit and vegetables
  • 1514 vegetable and animal oils and fats
  • 1520 dairy products
  • 1531 grain mill products
  • 1532 starches and starch products
  • 1533 animal feeds
  • 1541 bakery products
  • 1542 sugar
  • 1543 cocoa, chocolate and sugar confectionery
  • 1544 macaroni, noodles, couscous
  • 1549 other food products
  • 1551 spirits; ethyl alcohol
  • 1552 wines
  • 1553 malt liquors and malt
  • 1554 soft drinks, mineral waters
  • 1600 tobacco products
  • 2101 pulp, paper and paperboard
  • 2102 corrugated paper, containers
  • 2109 other articles of paper and paperboard
  • 2424 soap and detergents, cleaning preparations, perfumes.

See also

Template:Consumer behavior

References

  1. ↑ http://www.mandmglobal.com/community/blog/12-04-27/The-FMCG-landscape-an-infographic.aspx
  2. ↑ Product Management in India. PHI Learning. 2004. pp. 26–27. ISBN 978-81-203-1252-4. Retrieved 2010-06-19. 
  3. ↑ Aydın Çelen; Tarkan Erdoğan and Erol Taymaz (June 2005). Fast Moving Consumer Goods Competitive Conditions and Policies (PDF). Economic Research Center, Middle East Technical University. Retrieved 2007-07-09.  , p.2
  4. ↑ Aydın Çelen; Tarkan Erdoğan and Erol Taymaz (June 2005). Fast Moving Consumer Goods Competitive Conditions and Policies (PDF). Economic Research Center, Middle East Technical University. Retrieved 2007-07-09.  , p.3-4

External links

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