Make Marketing History

The views of a marketing deviant.

Friday, July 04, 2008

The Commodification Epidemic.

There is a lot of talk about commodification around these days, but let's not forget what a commodity actually is. A commodity is defined as a product that can only be differentiated by price.

You don't have to have a remarkable innovation to avoid commodification. A me-too product does not necessarily have to be a commodity. It may be very similar to the competition, but you can still differentiate it by distributing it in a different way. You can decommodify its delivery and retail channels.

You can even decommodify it by focussing on another aspect of the product. I'm not talking about faux emotional differentiaton here, but an aspect that is common to all your competitors. An aspect which they've chosen not to emphasise because they've overlooked the fact that its customers who decide what it is that they like about a product. You surely don't see your product as uni-dimensional?

Technology and transparency certainly mean that commodification is more prevalent than before, but that's no reason to bow to it without a fight. As I've said before, if you compete on price, you are explicitly saying that you have no belief in the intrinsic value of your product. If that's true, you deserve to fail.


Blogger Charles Edward Frith said...

I'm not sure if I entirely agree with you John. One of my pitch recommendations for Coke some years back was to make sure they had the most expensive green tea product on the market. Even if by only a couple of cents. Make it the most expensive.

2:48 AM, July 05, 2008  
Blogger john dodds said...

If your product is more expensive then it's not a commodity as per my (correct) definition. Commodites differentiate by being cheaper.

4:11 AM, July 05, 2008  

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