Fast Moving Consumer Goods, often known as the consumer packaged goods, refers to those products that are relatively economical and are thus, sold quickly and easily. Most of the non-durable goods like processed fast foods, soft drinks, chocolates, toys, toiletries, cosmetics, drugs and other popular consumables can be termed as fast moving consumer goods. The term ‘Fast Moving Consumer Goods’ (FMGG) was initially coined by Neil H. Broden in his acclaimed book, ‘Concept of Marketing Mix’.
These fast moving consumer goods have a considerably higher consumer demand. Due to this reason, they have a shorter shelf life. Unlike the more durable and major appliances like kitchen goods, gadgets and similar stuff, these products are sold quite easily and quickly. On top of that, most of the popular fast moving goods like the meat, vegetables, packaged foods, soft drinks, chocolates, biscuits and alcohol are extremely perishable and have good turnover prices.
Even though these fast moving goods are sold in huge quantities, they have a considerably less profit margin. However, the cumulative profit margin from these goods can be highly substantial. With respect to marketing, these fast moving products are the best examples of high volume business with low-profit margins.
Benefits of fast moving consumer goods
Even though the fast moving consumer goods are considerably easier to dismiss, they have some extremely commendable benefits. Some of these benefits are listed below.
More cumulative profits: From the perspective of a retailer, the major benefit of fast moving consumer goods is the huge, cumulative profits they come with. These products have lower profit margins. This means that a puny percentage from the sale of each unit is meant to represent profit. At the same time, we should not that a consumer product good has greater and huge sales. So, in this manner, each of the small profits adds up, thereby forming a huge chunk of profit for the fiscal period of the retailer. This cumulative profit has several monetary purposes in the entrepreneurial programs.
Opportunities for multiple merchandising: Retailers enjoy greater and better profits when a prospective customer buys more than goods on their visits. These fast moving consumer goods provide an opportunity for multiple merchandising, when a company places two different products in a strategic position. For instance, if an electronic retailer places his batteries next to a remote, there are higher chances of boosting the sales.
Greater and better brand appeal: In business, what matters the most is brand appeal. So, if you put in a better and commendable brand appeal, your business is likely to enjoy more profits in the long run. The fast moving consumer goods play a vital role in developing the brand appeal and boosting the sales of a product via brand appeal. Due to this reason, when a prospective customer sees a brand, he is driven by his existing emotional connections with the brand and he thus purchases the product right away.
Thus, fast moving consumer goods are indeed one of the best ways to buck up your sales and enjoy cumulative profits in the long run.