Fast-moving consumer goods
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. The term was coined by Neil H. Borden in The Concept of the Marketing Mix in 1965 (1996, Prentice-Hall, Inc.).
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.
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 probably the most classic case of low margin and high volume business.
Contents
Characteristics
The following are the main characteristics of FMCGs:[1]
- From the consumers' perspective:
- Frequent purchase
- Low involvement (little or no effort to choose the item)
- Low price
- Short shelf life
- Must use for daily consumption
- From the marketers' angle:
- High volumes
- Low contribution margins
- Extensive distribution networks
- High stock turnover
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.
