Marketers use different approaches to target consumers based on the type of product they're selling. When consumers purchase products for their own person use, those products and services are considered part of the consumer market. Understanding which type of consumer market your products and services fall within can help you develop the best approach for reaching your ideal audience. In this article, we discuss what consumer markets are, why they're important, the different elements of consumer markets and the different types.
What are consumer markets?
A consumer market is a market when individuals purchase products or services for their own personal use, as opposed to buying it to sell themselves. Consumer markets consist primarily of products that people use as part of their everyday lives. Anytime someone purchases a product for their own use, they become part of the consumer market. The market typically is divided into four different categories: food, beverages, transportation and retail.
Why are consumer markets important?
Consumer markets are important because it's in this market that consumers do the majority of their purchasing. Companies can target consumers by different characteristics, including demographics, behavior or geographic location. By understanding the unique characteristics of consumers who purchase from them, companies can create more effective marketing campaigns and increase their overall profitability.
Elements of consumer markets
Businesses use market segmentation to analyze characteristics of consumer markets and develop marketing plans that most effectively resonate with their target audience. For instance, companies may analyze data to target young adults between the ages of 18 to 25 for a clothing or smartphone offer. The targeted group may have other qualifying characteristics as well, such as interests and income level.
Some examples of essential consumer traits include:
- Geographic characteristics
- Psychographic (attitudes, interests, values, opinions and activities)
Brands can also target consumers based on specific or general opinions. Focus group interviews or surveys enable businesses to understand consumers' attitudes and opinions. They can then use that information to modify marketing plans or even make changes to their products or services to better meet the needs of their audiences.
Read more: [Guide To Market Segmentation](https://www.indeed.com/career-advice/career-development/market-segmentation)
Consumer markets examples
Consumer market examples include products in categories like fast-moving consumer goods and consumer durables. Commercial activities in this market involve individuals purchasing goods and services for personal use. They may purchase electronic items, food and beverages, recreational services, clothing, transportation and financial services.
Consumer durables are high-value items that fall either under the white or brown goods sub-categories. White goods are kitchen appliances and not portable. They were given the name because in the past they were almost exclusively painted white. Conversely, brown goods are generally portable, excluding some audio equipment. Here is a look at some examples of each:
- Gaming consoles
- Audio equipment
- Digital media players
- Tumble driers
- Washing machines
Types of consumer markets
A consumer market is a type of customer market consisting of multiple subtypes. Each variant has distinct characteristics:
Fast-moving consumer goods (FMCG) sector
Also known as the consumer packaged goods (CPG) market, the FMCG sector is one of the largest sub-categories in the consumer market. Consumers generally purchase low-value items regularly, and the goods come with a relatively shorter shelf life. Merchants offset the low profits by distributing large volumes of the merchandise.
Popular multinational companies active in this sector include large beverage companies and pharmaceutical organizations. Manufacturers and retailers sell a wide selection of consumer products that fall under categories like:
- Personal care products
- Home care items
Price competition can be intense in this market due to the similarities between products. To boost customer loyalty, merchants employ various marketing approaches. Once a product earns a considerable base of loyal customers, brands find it easier to increase prices.
Companies often hire marketing firms specializing in FMCG campaigns to achieve the desired results. That said suppliers need to invest in research and development to create innovative product ideas that meet consumers' changing needs.
Consumer durables are a category of products that are designed to last a long time and therefore are purchased less frequently. Perishables like milk and produce are the opposite of a consumer durable because these items have a short shelf life and their economic value is consumed not long after being purchased.
Some examples of consumer durables include:
- Sporting goods
- Vehicle parts
- Home and office furniture
The consumer durables sector has been experiencing significant growth spurred by several factors, including:
- Increased disposable income
- Retail boom
- Growth in vehicle sales
Consumer nondurables are goods that are purchased for immediate use. These items typically have a lifespan of several minutes up to three years. Common examples of consumer nondurables include:
- Dish soap
- Light bulbs
- Paper products
- Laundry detergent
Consumer behavior typically remains consistent towards these nondurables because they are products that they must purchase regardless of the state of a country's economy. For example, regardless of economic conditions, consumers typically still need to purchase groceries, soap, laundry detergent and gasoline.
Characteristics of a consumer
Consumers drive the economic activity of a country and companies develop a wide selection of products and services to satisfy specific consumers' needs. Marketers conduct research and market analysis by individualizing consumers' profiles. They analyze various market segments, including demographic and psychographic profiles, intending to personalize marketing material. Additionally, they increasingly focus on mass customization and permission marketing.
Brands formulate powerful marketing strategies that capture the target audience's imagination by focusing on consumer:
In turn, consumers gain access to relevant and reliable product or service information, making it easier to satisfy specific needs.