In economics, goods are the things that play an important role in satisfying human needs and requirements. The two primary classifications of goods are consumer goods and capital goods. In this article, we will go through the complete difference between both consumer goods and capital goods. This blog has the following main topics.
Definition Of Consumer Goods
Consumer goods, also known as final or consumption goods refer to those tangible goods which are purchased by individuals for final consumption in order to satisfy their needs and wants. For example, bread, butter, cake, chocolate, shirt, pen, furniture, etc. They are further sub-divided into.
- Durable Goods- Durable goods are tangible goods that do not quickly wear out or more specifically, the goods that give utility over time rather than being completely consumed in one use. For example, TV, furniture, refrigerators, etc.
- Nondurable Goods- Non-durable goods are the products that are consumed or are only useable for a short period of time because they drain out or become useless. For example, fresh vegetables, fruits, bakery items, etc
Definition Of Capital Goods
On the other hand, Capital goods or producer goods are those final goods that help in the production of other goods and services. The users of the capital goods are usually the companies that later focus on the production of consumer goods. Examples are plants and machinery, equipments, vehicles, buildings, etc.
- Capital goods can be used for productive purposes and have an expected lifetime.
- They are durable consumer goods for households.
- They also help in the economic growth of the country.
- A business would not be able to produce products or services without reliable capital goods.
Consumer Goods Vs Capital Goods(Comparison Table)
|Basis For Difference||Consumer Goods||Capital Goods|
|Meaning||Goods that are used by the end-users for consumption and have no use in the future are called consumer goods.||Capital goods are the goods that are deployed to produce consumer goods and can be used in the future are called capital goods.|
|Marketing||Business to consumer||Business to business|
|Objective||They are purchased with the aim of personal consumption||They are purchased for manufacturing other consumption goods|
|Demand||They have high demand||Capital goods have comparatively less demand|
|Cost and Pricing||Consumption goods are cheap||They are comparatively expensive|
Key Differences Between Consumer Goods And Capital Goods
Some of the main differences between consumer goods and capital goods are as follows.
- Consumer or Consumption goods are the goods that are used by consumers in order to satisfy their wants. On the other hand, Capital goods are the goods that are deployed to produce other goods.
- The marketing strategy used to sell consumer goods is business to the consumer whereas business-to-business marketing is used to sell capital goods.
- Consumers are the target customers of consumer goods. On the other hand, the customers of capital goods are manufacturers.
- While consumer goods are cheap and depend on market demand, capital goods are comparatively costlier.
- Consumer goods are purchased with the objective of personal consumption. On the other hand, capital goods are purchased with the aim of producing other goods or consumption goods.
So, from the above explanations, we can simply conclude that both consumer goods and capital goods are different from one another. Both of them have their own different factors and aspects of usage. Consumer or Consumption goods are the goods that are used by consumers in order to satisfy their wants. On the other hand, Capital goods are the goods that are deployed to produce other goods. The key difference between consumer goods and capital goods is that consumer goods are the goods that are used by the end-users