Scribd
Upload
34 views

Characteristics: Low Cost Packaged Foods Beverages Toiletries Over-The-Counter Drugs Consumables Shelf Life

Fast-moving consumer goods (FMCG) are non-durable goods like packaged foods, drinks, and toiletries that are sold quickly and at low costs. They have short shelf lives due to high demand or deterioration. Packaging is critical for FMCGs to protect products, provide information to consumers, and attract customers. While profit margins are small per item, FMCGs are sold in large volumes, providing substantial cumulative profits. The growth of the internet and online communities has increased demand for FMCGs. However, most FMCG purchases still occur in brick-and-mortar stores for convenience.

Uploaded by

Varun Reddy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
34 views

Characteristics: Low Cost Packaged Foods Beverages Toiletries Over-The-Counter Drugs Consumables Shelf Life

Fast-moving consumer goods (FMCG) are non-durable goods like packaged foods, drinks, and toiletries that are sold quickly and at low costs. They have short shelf lives due to high demand or deterioration. Packaging is critical for FMCGs to protect products, provide information to consumers, and attract customers. While profit margins are small per item, FMCGs are sold in large volumes, providing substantial cumulative profits. The growth of the internet and online communities has increased demand for FMCGs. However, most FMCG purchases still occur in brick-and-mortar stores for convenience.

Uploaded by

Varun Reddy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) are products

that are sold quickly and at a relatively low cost. Examples include non-durable goods such
as packaged foods, beverages, toiletries, over-the-counter drugs, and other consumables.[1][2]
Many fast-moving consumer goods have a short shelf life, either as a result of high consumer
demand or as the result of fast deterioration. Some FMCGs, such as meats, fruits, vegetables,
dairy products, and baked goods are highly perishable. Other goods, such as pre-packaged
foods, soft drinks, candies, and toiletries have high turnover rates. Sales are sometimes
influenced by holiday and/or seasonal periods and also by the discounts offered.
Packaging is critical for FMCGs. To become successful in the highly dynamic and innovative
FMCG segment, a company not only has to be acquainted with the consumer, brands, and
logistics, but also, it has to have a sound understanding of packaging and product promotion.
The packaging has to be both hygienic and customer-attracting. Logistics and distribution
systems often require secondary and tertiary packaging to maximize efficiency. Unit or primary
packaging protects products and extends shelf life while providing product information to
consumers.[citation needed]
The profit margin on FMCG products can be relatively small, but they are generally sold in large
quantities; thus, the cumulative profit on such products can be substantial. According to BASES,
84% of professionals working for fast-moving consumer goods are under more pressure to
quickly bring new products to the market than they were five or ten years ago. With this in mind,
47% of those surveyed confessed that product testing suffers most when deadlines are
accelerated.[3]
The growth of the internet over the past quarter century and the rise of the brand
community phenomenon have contributed greatly to the demand for FMCGs. For example,
according to German research group AGOF's internet facts, 73% of Germany's population is
online. Additionally, 83.7% of internet users claim to use the web to search for information and
68.3% to shop online.[4] However, most FMCGs are not ordered online as most consumers opt
for the convenience of nearby brick and mortar stores for products in this category.

Contents

 1Characteristics
 2Rural consumers
 3ISIC definition
 4Fast-moving consumer electronics
 5See also
 6References

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

 From the consumer perspective


o Frequent purchases
o Low engagement (little or no effort to choose the item)
o Low prices
o Short shelf life
o Rapid consumption
 From the marketer perspective
o High volumes
o Low contribution margins
o Extensive distribution networks
o High stock turnover

Rural consumers[edit]
Consumers in rural areas typically purchase goods from nearby towns and villages. Recently,
there has been a shift in consumer purchase behavior towards purchasing locally, that has
prompted the need for better local promotional efforts to generate brand awareness in small
towns. FMCGs play a large part in the economy, as inelastic products that touch every part of
consumer life in one way or another. Businesses that supply FMCGs to a rural community can
help provide employment opportunities, as well as drive down the cost of such products in those
rural areas. For instance, the FMCG sector in India is the 4th largest sector in its economy and
generates employment for more than 3 million people in downstream activities.[5]

ISIC definition[edit]
The retail market for FMCGs includes businesses in the following International Standard
Industrial Classification (ISIC) (Revision 3) categories:[6]

 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

You might also like