Introduction
Fast-Moving Consumer Goods (FMCG) are products that are sold quickly and at a relatively low cost. According to Veselova (2022), common examples of FMCG include food items, beverages, toiletries, household cleaning products, over-the-counter medicines, and other consumer products. These goods are usually purchased with the intent of daily use and have a shorter shelf life than many other consumer goods. Auvik (2020) added that this type of merchandising aims to keep stock fresh and available as much as possible while also appealing to the desires of consumers who prefer more frequent shopping trips. Ultimately, manufacturers benefit most from this model as they are able to quickly replenish their shelves with new products in high demand, and faster turnover rates often result in higher profits.
Discussion
FMCGs are a major part of modern-day life, as they are widely popular items regularly consumed and replenished by both individuals and households. Oblea and Cabauatan (2022) observed that people choose FMCGs for a variety of reasons, such as their convenience, variety, affordability, and availability. FMCGs have become increasingly prevalent in society due to improvements in transportation and modern production techniques; this has enabled the introduction of smaller portion sizes and lower prices without compromising on quality. Additionally, consumers appreciate the sheer number of brands available, allowing them to find something that suits their tastes better (Boyle & De Keere, 2019). Moreover, mass production has made it easier to consume these goods on an unprecedented scale, and has incentivized companies to increase customer satisfaction through discounts, promotions, and giveaways.
Alternatively, people prefer FMCGs because they constantly need replenishment, which means they purchase and replace these items more frequently. As Zamora-Mesén (2020) explained, this keeps FMCG companies highly profitable because of the constant demand for their products. Generally, FMCGs have low price points relative to other consumer goods, which benefits businesses by ensuring affordability for a wider range and a greater number of customers (Wilkins & Ireland, 2020). According to Stanciu et al. (2019), low pricing encourages repeat purchasing since the cost burden is minimized, which increases customer loyalty and engagement even further. Ultimately, the combination of affordability, convenience, frequent replacement requirements, and strong promotion campaigns mean that FMCGs remain popular with a broad range of consumers.
Furthermore, other research supports that buyers prefer FMCG because of the lower pricing characteristic of these goods. Wanjohi (2018) confirmed that lower-priced FMCG products provide consumers easy access to everyday products, with quality or wide selection age being secondary considerations when selecting a product because of their budget restrictions. Lower affordability results from rapid stock turnover and high production rates, creating great value for consumers in this competitive market; this encourages consumerism which benefits the wider economy. Trendafilov (2020) added that lower prices come with shorter shelf lives and warranties should something go wrong with an FMCG product, both economically sensible options given the lack of perceived risk by FMCG goods purchasers. The lower prices also increase sales since even the poor can afford them.
On the other hand, FMCGs equally have limitations such as high turnover. FMCGs include food, beverage, cleaning, and paper goods (Mahajan, 2020). The businesses that produce these types of products emphasize producing low-cost materials in large quantities to maximize profit, but equally, they have drawbacks for consumers. These come in the form of lower-quality materials being used as inputs, resulting in shorter product life cycles and higher consumption levels as consumers frequently replace their purchases. Additionally, there is greater difficulty in marketing FMCGs because they lack any points of differentiation from competitors due to both their generic nature and identical price points (Davies & Doherty, 2018). As such, many businesses must choose between bloated advertising budgets or promoting inferior products with minimal sales power – neither is an ideal solution.
In addition, FMCGs pose a challenge for marketing teams because of their high cost and short shelf-life. Astete (2022) confirmed that these products require continuous investment to remain competitive and available on store shelves. For example, imagine a company making laundry detergent that has been successful in the market for a few years. Suddenly, several new competitors who use improved surfaces and supply chain structures to outcompete the original brand enter the market. The original laundry detergent now faces new challenges to stay ahead. The company will have to invest in innovation and branding opportunities to keep up with the competition – all while remaining cost-effective so as not to lose sales due to price increases (Tien, 2019). Therefore, effectively marketing FMCG can be difficult due to the ever-changing landscape and the need for quick adaptation.
Moreover, other authors also researched the disadvantages involved with FMCG products. One is that they generally have short shelf lives due to their low-quality ingredients and fast deterioration (Sthapit Kandel et al., 2020). Additionally, FMCGs tend to be more expensive than standard consumer products, as the production costs are higher due to their rapid turnover rate. Ferencakova et al. (2020) similarly affirmed that they contain shallow consumer involvement meaning companies cannot differentiate them easily or appeal to customers in distinct ways. Ultimately, better planning needs to be implemented for consumers to receive maximum cost-benefit from their purchases of FMCGs.
Conclusion
One possible research question would be how consumers’ price sensitivity changes when purchasing FMCG. For example, does the same level of price sensitivity exist for a household’s daily essentials, such as milk and bread, as compared to more discretionary items, such as ice cream and snacks? Additionally, can retailers influence consumer purchase behavior by adjusting prices on certain FMCG items? Further research could also look at whether there are differences between different age groups in terms of price sensitivity for FMCG items to give valuable insights for businesses targeting their advertising and promotions more effectively.
References
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