Beaten down yet? Have you accepted that your product is a 'commodity'The dictionary says that a commodity is "anything bought or sold" -- a much too wide a definition for our use. Whether you’re a domestic or international business, a commodity is a product or service over which the buyers have most of the influence when it comes to price. This is mainly because they perceive little or no difference between versions of this product or service as it's being offered.
Today the internet, technology and global business resources have commoditized everything from TV’s to copy machines, energy and even interest rates. A recent interesting blog supported this thinking. Bruce Greenwald, a Columbia Business School professor, once famously said "in the long run, everything is a toaster," in reference to his view that at some point all great innovations become commodities that are sought by consumers on the basis of price alone. Is that really true? By today's standards, even toasters are more than "just a toaster" with countless product and marketing innovations over the last 110 years that transformed the simple device into a multibillion-dollar industry.
Bruce's conventional wisdom is shared by many managers in companies everywhere whenever they encounter a moment of 'price only' competition. They immediately reach for the commodity panic button and slash prices, service, profits and often their own futures in the process. Innovation and a solid inbound marketing strategy could have saved them.
Redefine your product - don't settle for commoditization!Research conducted by Colman Brohan Davis for a global ingredients manufacturer found that you can still be perceived as a commodity if --
- Your product or service is handled by a sales force or broker network that also handles other, similar offerings.
- Your product exists within a silo-type organization or within a business unit of a very large enterprise. The farther down the organization chart your brand appears, the less likely it is to get the attention it needs. In addition, even though the corporate parent name may be known your particular brand may not be memorable.
- Your revenue is static or in decline and you've been marketing the same way for more than two years -- meaning, you have talked about the same product attributes, using the same sales force, with the same sales pitch, using the same materials, relying upon the same media mix and approaching the same customers.
Stay tuned for part 2 -- Marketing your way out of commodity status – Understanding, Innovation & Inbound Marketing.
In the meantime, Consilium has created the strategy approach and collection of real-world experience and tools to help SMBs take these precise steps. check out or business development approach here. We'd call it "unique" or "innovative" if those words weren't so nauseatingly overused. You can decide what name to affix, but we believe that once you dig into it, you'll agree with us that it's pretty awesome.
Contact Consilium today to discusss how we can support your bold objectives!