Marketing For Durable and Non-Durable Goods

Raman Bhatia Zeeshan Ansari

The Meaning of Marketing

Marketing is the performance of business activities that directs the flow of goods and services from producer to consumer or user
PRODUCER
Product

CONSUMER Need

Marketing activities

What is it?
Durable goods include those manufactured items with a normal life expectancy of three years or longer. An increase in the amount of durable goods orders may indicate an expansion in the economy and, if inflationary, the Federal Reserve could choose to tighten money by raising interest rates. Economic indicator that measures new orders placed with domestic manufacturers for immediate and future delivery of factory hard-goods. Levels of, and changes in, Durable Goods Orders are widely followed as an indicator of factory sector momentum.

Why is it important?
Center-stage attention by the financial markets and the business community the moment it is released. When a orders is a positive sign, they work to satisfy this demand from customer. When a orders is a negative sign: they will have to shut down some plants, possibly lay off workers, or risk unwanted inventories. Many economy sectors are tied to Durable Goods orders indictor: employment growth, industrial output, productivity, and profits.

Impact on Market

Keys to Interpreting the Data

The advance durable goods report is based on results obtained from 3,500 manufactures representing 89 industry categories. A new order is considered if it comes with a legally binding agreement to purchase a product for immediate or future delivery. All numbers are seasonally adjusted but annualized, nor are the dollars amounts adjusted for inflations. For military equipments, the government relies on Defense Department data

Latest Release
Durable Goods Orders: overview New orders for manufactured goods in March, up four of the last five months, increased $11.9 billion or 3.1 percent to $400.2 billion.

Shipments, up following two consecutive monthly decreases, increased $5.9 billion or 1.5 percent to $392.9 billion.

This followed a 1.4 percent February increase.

Unfilled orders, up twenty-two of the last twenty-three months, increased $12.9 billion or 1.8 percent to $717.3 billion. This was at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 1.1 percent February increase.

This followed a 0.6 percent February decrease.

Inventories, up twelve of the last thirteen months, increased $1.0 billion or 0.2 percent to $484.0 billion. This followed a slight February increase.

The unfilled orders-to-shipments ratio was 4.92, up from 4.88 in February.

The inventories-to-shipments ratio was 1.23, down from 1.25 in February.

Latest Release

Inventories Inventories of manufactured durable goods in March, up thirteen consecutive months, increased $0.6 billion or 0.2 percent to $298.5 billion, revised from the previously published 0.3 percent increase. This followed a 0.1 percent February increase. Inventories of manufactured nondurable goods, up following three consecutive monthly decreases, increased $0.3 billion or 0.2 percent to $185.5 billion. This was due to petroleum and coal products, which increased $0.6 billion or 2.0 percent to $28.0 billion.

Historical Data

Data Analysis

Based on the information from this indicator, we conclude:

The capital goods orders appear to be around the corner. Inflation pressure is unlikely, especially when the negative trend on core capital goods is possible . Concerns about economic growth are somewhat released by the increase in capital goods orders reflecting strong business investment spending in March.

Nondurable goods last less than two years: Food, clothing, cigarettes, alcohol, but not personal computers!! The nondurable goods manufacturing index is an indicator of the economics of everyday life. The index has been published monthly by the US Federal Reserve Board since 1919. It complements the durable goods manufacturing index.

Example Of Non Durable Goods

The log nondurable goods index

2.2 2

Log 10 Nondurable Goods Index

1.8

1.6 Vietnam War ends 1.4 Stock Market crash

1.2 World War II begins

1 Treasure Board closes money supply 0.8 1920 1930 1940 1950 1960 1970 1980 1990 2000

Year