Consumer products is one of those elastic phrases that can include any of the jars, boxes, cans, or tubes on your kitchen and bathroom shelves-or it can expand to include pretty much everything you charged on your Visa card last year. This industry manufactures and, perhaps more importantly, markets everything from food and beverages to toiletries and small appliances. (We do not include industries sometimes put in this category but covered in other profiles: autos, apparel, entertainment products, and consumer durables, which are large appliances and other products expected to last more than three years).
The consumer products industry can be divided into four groups: beverages, food, toiletries and cosmetics, and small appliances. Most firms offer products that fit primarily into only one of these groups, although a firm may have a smattering of brands that cross the lines. Virtually all companies are similar in organizational structure, emphasis on brand management, and approach to business.
Consumer products are the foundation of the modern, consumer economy. The industry itself not only generates an enormous portion of the gross domestic product, it also pumps huge amounts of money into other industries, notably advertising and retail. Individual consumers make up the majority of this industry's customers; sales are concentrated in the United States, Japan, and Western Europe, though other parts of the world are working hard for the privileges of wearing clothing emblazoned with company logos, eating processed food, and chopping vegetables with an electric motor instead of a traditional utensil. Success in consumer products is all about marketing an individual product, often by promoting a brand name. The competition is ferocious for shelf space, so package design, marketing, and customer satisfaction are key elements.
The majority of companies that sell consumer packaged goods are conglomerates consisting of many diverse subsidiaries selling brands that consumers recognize. Sara Lee Corporation produces products from Ball Park franks to Hanes underwear and Endust furniture polish. Unilever, an industry giant based in England, sells teas and soups, pasta and pizza sauces, ice cream, bath soaps, shampoo, salad dressing, margarine, laundry detergent, toothpaste, cosmetics, frozen foods, and perfumes. Other big players in the industry include Nestle, Clorox, Kraft, Procter & Gamble, S.C. Johnson, and ConAgra.
Consumer products companies are looking to maximize profits and market share in an interconnected, competitive environment. Challenges for these organizations include meeting the changing demands of customers, maneuvering through a consolidating market, and executing strategies to grow profitably.