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Invisible Marketing

Wednesday, October 27, 2004

Are you sure it's a commodity?

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The first rule of competitive strategy in a commodity market is to quit thinking of your product as a commodity. You may not ever see 80% operating margins or have all the pricing power you want. You also aren't "exactly the same as everyone else."

Every interaction with your company or its products, especially for consumers, is an opportunity to build an experience and deliver value, if you understand the priorities, interests, and concerns of your customers.

Here's an example. Milk should be a commodity product. It's traded on commodities markets like oil. One cows is pretty much like the next. Except when it isn't. Organic milk, hormone- and antibiotic-milk, milk in ten different flavors, milk from a local dairy known for supporting children's charities, milk provided in glass bottles because it tastes better that way, all these deliver extra value on a commodity product. People pay a constellation of different prices for this differentiated commodity.

If even commodity businesses can differentiate, so can you.
Posted by InvisibleMarketing at 9:49 PM

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        • Are you sure it's a commodity?
        • Is it clear to everyone else?
        • Your biggest competitor isn't.
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