Consumer Product Vs. Industrial Product
The main difference between consumer and industrial product lies is that the purpose for which the product is purchased.
Consumer products and industrial products are two types of products found in the market. Consumer product on one hand is a product that satisfies the immediate need and wants of individual consumers.
On the other hand, an industrial product is a product that is purchased for business use – usually for reproduction and resell.
For example, if an individual purchases a typewriter for his personal use – this product is termed a consumer product. And, if he purchases the typewriter for use in his business – this product is termed as an industrial product or good.
Let’s understand what industrial and consumer products are and the differences between them.
What are Consumer Products?
Consumer products or goods are products that are used by consumers for consumption purposes. Consumer goods are made intended to satisfy the needs, wants, and desires of final consumers.
The basic purpose customers purchase consumer goods is for consumption either personal or household, not for commercial purposes.
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Examples of consumer goods include clothes, rice, furniture, soap, salt, vegetables, etc. Consumer goods have the following four types,
- Convenience Goods – These include the goods consumers buy on a regular basis. For example – rice, vegetables, salt, etc.
- Shopping Goods – Include products consumers infrequently buy such as clothes, furniture, mobiles, refrigerators, etc.
- Specialty Goods – Include products that are expensive and provide luxury facilities to consumers such as expensive cars, watches, branded suits, etc.
- Unsought Goods – Consumers usually do not think of buying unsought goods. For example – insurance, prepaid funeral services, reference books, etc.
Consumer goods can further be classified as durable, non-durable, and services. Consumers’ demand is directly influenced by the changes in market conditions.
What are Industrial Products?
Usually, industrial goods are purchased for producing other products or for business, commercial, or resell purposes. For example, businesses purchase raw materials to make the final products that can be further transaction with final consumers.
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Types of industrial goods include six. They are:
- Raw Materials – These are the first part of the production process i.e. input, process, and output.
- Capital Goods – Include heavy machines, equipment, buildings, lands, capital, etc.
- Essential Equipment – Include products like machinery, automobiles, computers, etc. that are essential for the smooth operations of the business.
- Component Materials – This includes the products which are to some degree already processed such as auto parts, tires, switches, etc.
- Accessory Products – These are the industrial goods that aid in the production and distribution of products without being an active part of them.
- Services and Supplies – These include products companies need on a regular basis. These are convenience products for industries.
Difference Between Consumer and Industrial Products
The followings are the key points that are key to understanding the difference between consumer and industrial products or goods. They are:
The products that are used for consumption purposes and that satisfy the needs and wants of individual or household consumers are called consumer goods.
Whereas, the products purchased by industries or businesses for the production of other goods and for commercial purposes are called industrial goods.
Consumers buy consumer goods for consumption purposes. Whereas, businesses buy industrial products either for reproduction or commercial purposes.
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Level of Involvement
Since consumer goods are used frequently by consumers, generally there is low involvement of consumers while buying.
On the other hand, buying industrial products is a professional activity. Authorities involved in the buying process have to carefully evaluate the products before making a purchase decision.
The demand for consumer products is elastic in nature. The changes in prices, quality, and other marketing factors have a direct influence on consumer demands. That means consumer goods have a direct demand from customers.
On the other hand, the demand for industrial goods is inelastic in nature. Changes in prices or other marketing variables do not significantly affect the demand for industrial products.
Number of Buyers
Buyers of consumer products are large in size as compared to buyers of industrial products.
However, despite the large number of buyers, they buy consumer products in small quantities. Whereas, industrial buyers buy products and services in large quantities despite being small in size.
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Consumer products are further of four types – convenience, shopping, specialty, and unsought products.
And, industrial products are further six types – raw materials, capital goods, essential equipment, accessory products, component materials, and service and supplies.
Market Affected By
The market for consumer products is affected by changes in fashion and styles. Whereas, the market for industrial products is affected by changes in technologies and other external factors.
Examples of consumer goods include rice, vegetables, furniture, clothes, medicines, umbrellas, bikes, cycles, salt, soap, and it goes on.
Whereas, examples of industrial goods include heavy machinery, lands, buildings, raw materials, stationaries, display racks, lubricants, paints, forklifts, maintenance services, and so on.
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