Fast-moving consumer goods

Store aisle of fast moving consumer goods
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, over-the-counter drugs, processed foods and many other consumables.[1][2] In contrast, durable goods or major appliances such as kitchen appliances are generally replaced over a period of several years.

Many fast moving consumer goods 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, chocolate, candies, and cleaning products, have high turnover rates. The sales are sometimes influenced by holidays and seasons.

Packaging is critical for FMCGs. The logistics and distribution systems often require secondary and tertiary packaging to maximize efficiency. The unit pack or primary package is critical for product protection and shelf life but provides information and sales incentives to consumers.

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; thus, the cumulative profit on such products can be substantial. FMCG is a classic case of low margin and high volume business.

Characteristics

The following are the main characteristics of FMCGs:[1]

  • From the consumer's perspective
    • Frequent purchase
    • Low involvement (little or no effort to choose the item)
    • Low price
    • Short shelf life
    • Rapid consumption
  • From the marketer's perspective

ISIC definition

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

  • ISIC 5211 retail sales in non-specialized stores
  • ISIC 5219 other retail sales in non-specialized stores
  • ISIC 5220 retail sales of food, beverages and tobacco in specialized stores
  • ISIC 5231 retail sales of pharmaceutical and medical goods, cosmetic and toilet articles
  • ISIC 5251 retail sales via mail order houses
  • ISIC 5252 retail sales via stalls and markets
  • ISIC 5259 wholesale goods
  • ISIC 5269 wholesale medical prescriptions

Supplier industries for FMCGs include:

  • 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
  • 2430 men's and women's inner garments, shaving gels, deodorants

Fast-moving consumer electronics

Fast-moving consumer electronics are typically low-priced generic or easily substitutable consumer electronics, including mobile phones, MP3 players, game players, earphones, headphones, OTG cables, and digital disposable cameras.

See also

References

  1. 1 2 Ramanuj Majumdar (2004). Product Management in India. PHI Learning. pp. 26–27. ISBN 978-81-203-1252-4. Retrieved 2010-06-19.
  2. ↑ Sean Brierley (2002). The advertising handbook By Sean Brierley (2, illustrated ed.). Routledge. p. 14. ISBN 978-0-415-24391-9.
  3. ↑ Aydın Çelen; Tarkan Erdoğan; 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
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