The term “commoditize” refers to a process in which
goods or services become relatively indistinguishable
from the same offerings presented by a rival company.
What is an example of commoditization?
Imagine you’re launching
a clothing line for people with sensitive skin
. Your products are made from special fabrics that keep the skin dry and prevent chafing. Customers love them and are willing to pay a premium price, which in turn allows you to grow your brand and stay ahead of the competition.
What causes a product to become commoditized?
Commoditization occurs
when the latest innovations lose their luster and become a part of expected daily life
. The result of this process is dropping prices and a rise in competition among those who provide the service or goods.
Is commoditization good or bad?
Commoditization is a process in which goods which have unique features becomes simple commodities and can be interchanged easily with other alternatives available in the market. … Commoditization is the biggest challenge for those businesses whose products don’t have unique features.
How do you win a commoditized market?
- Customer discovery. Do voice-of-the-customer research. …
- Product or market adjacency. …
- Bundle (or unbundle) your offerings. …
- Distribute your brand in a unique way. …
- Customer service. …
- Unique promotion, packaging and advertising. …
- Adjust price.
What does it mean when a product is commoditized?
Key Takeaways
“Commoditize” refers to
a process in which a product is essentially deemed identical to the same class of offering presented by a rival company
. Commoditized products allow consumers to make purchasing decisions based solely on the price-tags of the item in question.
What does it mean if something becomes a commodity?
Commoditization
refers to the process of making something into a commodity. … When a financial contract such as a mortgage becomes commoditized, the contract becomes more liquid because it can be bought and sold readily.
What is commodify mean?
transitive verb. :
to turn
(something, such as an intrinsic value or a work of art) into a commodity attempts to commodify the water supply.
What can be commoditized in future?
- Accessible predictive analytics. …
- Publically available data services. …
- Data as a business requirement. …
- Data departments. …
- Subdivision of data categories.
What’s the difference between commoditization and commodification?
One way to summarize the difference is that commoditization is
about proprietary things becoming generic
, whereas commodification is about nonsaleable things becoming saleable.
What are the bad effects of commoditization?
Commoditization is bad because
it erodes your ability to charge a healthy, profitable fee for what you make or do
. When everything looks the same to your buyers, they’ll generally settle on whichever solution or product is the cheapest.
How do you avoid commoditization?
- Create a third market place.
- Target the right customers.
- Add a dose of expertise.
- Don’t keep them (customers) waiting.
- Amp up the personal touch.
How does a good become a commodity?
A product essentially becomes a commodity
when customers perceive little or no value difference between brands or versions
. Price becomes the only differentiation. … Instead, they come up with a new product or service and they milk it.
How can a commodity market stand out?
- Start your own business website. …
- Update your business profile on Google. …
- Come up with useful content. …
- Take advantage of SEO. …
- Make your site mobile-friendly. …
- Be social. …
- Narrow down your niche.
Which is a commodity?
A commodity is
a basic good used in commerce that is interchangeable with other goods of the same type
. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers.
How do you differentiate commodity services?
- Deliver superior product or service consistency (quality control).
- Deliver superior responsiveness (order fulfillment, technical support, customer service).
- Offer a superior range of products and services.
- Consider value chain integration.
