Final good (consumer good)
Final goods, also known as consumer goods, are products that are purchased and used directly by consumers to satisfy their everyday needs. These goods are categorized into three main types: durable goods, nondurable goods, and services. Durable goods, such as televisions and clothing, are designed for long-term use, typically lasting three years or more. Nondurable goods, including food and beverages, are consumed quickly and usually have a lifespan of less than three years, often referred to as fast-moving consumer goods. Services, on the other hand, encompass activities performed for consumers, like postal delivery and automobile repairs.
Final goods are distinct from capital goods, which are used in the production of other goods. Consumers engage in various decision-making processes when purchasing final goods, ranging from impulse buys to extensive research for more expensive items. Well-known companies in the final goods sector include Nestlé, Procter & Gamble, and PepsiCo, among others. The purchasing decisions made by consumers can vary significantly based on the type of good, reflecting the complexity of consumer behavior and the diverse needs these goods fulfill.
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Final good (consumer good)
Final goods are goods that are purchased and consumed or used by ordinary consumers. Final goods, which are also called consumer goods, are produced for everyday use to fulfill needs.
The three types of final goods are durable goods, nondurable goods, and services. Examples of final goods are clothing, televisions, food, and postal services. Some of the largest final goods companies in the world are Nestlé AG, Procter & Gamble, and PepsiCo.
Final goods are different from capital goods, which are goods that are used in production. In other words, capital goods are used to produce other goods. Raw materials, machines, and factories are examples of capital goods.
Consumers make a number of types of decisions when purchasing different types of final goods.
Overview
Final goods are the end result of production. In other words, final goods do not have to undergo any other stages of production and thus are the finished product. They are the goods that can be found on store shelves. Final goods are not sold for resale. Instead, consumers purchase these goods and then consume or use them.
Final goods typically fall into one of three categories: durable goods, nondurable goods, and services. Durable goods are consumed or used over a long time. They generally have a lifespan of at least three years. Clothing and televisions are examples of durable goods. Nondurable goods are consumed or used in a short amount of time, sometimes in a single act. They usually have a lifespan of less than three years. Food and drinks are examples of nondurable goods. Food and drinks also can be said to be fast-moving final goods. Companies tend to prefer fast-moving final goods because they quickly move from store shelves. Services are activities that are performed for consumers. Postal delivery and automobile repairs are examples of services.
As of 2016, Nestlé AG was the largest final goods company in the world. The company produces several brands, including Gerber, Purina, and Stouffer's. Procter & Gamble, PepsiCo, the Coca-Cola Company, Tyson Foods, and L'Oréal are some other large final goods companies.
Consumers typically make different types of decisions when purchasing different types of final goods. A consumer could make a spontaneous decision to purchase an inexpensive good, such as a pack of gum that he or she happens to notice at the checkout line of a store. This often is called an impulse purchase. A consumer may make a decision that requires little thought to purchase a good that he or she regularly purchases, such as a cup of coffee. This usually is referred to as a routine purchase. A consumer might make a decision that demands more thought and the advice of others to purchase a more expensive good or service. Typically called limited decision making, an example is when a consumer asks a friend for suggestions before taking his or her car to an automobile repair shop. Lastly, a consumer could make a decision that requires a great deal of thought, the advice of others, and research to purchase an expensive good or service. Often called extensive decision making, an example is when a consumer does substantial research before purchasing a computer.
Final goods fill a number of needs of consumers. Depending upon the type of final good needed, a consumer may devote varying effort to making decisions about final goods.
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