Every business owner and leader will tell you that if businesses don’t sell, they die. Indeed that is true. But what many business owners and leaders might forget to tell you is that Death by Commodity is very real- When prospect consumers don’t know how your product or service is different from those of competitors in the market. These products or services can be cheaper; easier to deploy; easier to access (availability); come as value-adds too, or as other marketing ideas arrived at by the competitor marketing team.
HOW CAN YOUR BUSINESS SURVIVE AND AVOID DEATH BY COMMODITY TRAP?
Take a few minutes to internalise why consumers are willing to spend premiums for Nike products when they can get a functional equivalent elsewhere or a duplicate at a far lower cost.
Parallels can be drawn across products and services in all categories. Consumers perceive products or services as a commodity when they are unable to distinguish a Value Proposition that resonates with them. When consumers perceive your product or service as a commodity they negotiate; discount; replace; upgrade. WHY? Because businesses haven’t built a Brand of Trust that consumers can latch on to.
IF BUSINESSES CONTINUE TO RELY AND COMPETE ON PRICE THEY WILL DIE A COMMODITY.
Food Aggregator Companies have built their business around discounts. They commoditised the F&B of local restaurants with the promise of more customers. While these local restaurants continually feel the pressure of lower business margins; they hope that volume sales will offset this. What they need to realise is that the survival of their business lies in their BRAND (rather The Branded Experience of their restaurant). This is something that food aggregators cannot replace or replicate.
DEATH BY COMMODITY OR LIFE AS A BRAND
Unfortunately businesses cannot start thinking and building a brand only when business gets tough; margins are low; consumer retention is weak; competitors are growing. Businesses start from Day 1 of being in business; even before going out into the market looking for your first paying consumer.
HOW DO BRANDS STACK UP AGAINST PRODUCTS?
PRODUCTS ARE VULNERABLE
PRODUCTS RELY ON QUICK HACKS AND GIMMICKS
BRANDS LIVE ON
PRODUCTS HAVE A DEFINITIVE LIFE CYCLE
PRODUCTS STAND FOR EVERYTHING
BRANDS CANNOT BE COMMODITISED
ARE ONLY COMMODITISED
LIVE LIFE AS A BRAND
To live life as a Brand, businesses need to continuously de-commoditise their solutions. Why? Because the minute businesses come up with something new, a competitor will try and copy it. Over time, these solutions become commoditised; profit margins will get wafer thin and soon companies will have no choice but to remove the same from their portfolio.
For your businesses to succeed in a commodity marketplace you need to start functioning beyond the dynamics of commodities - finding the value proposition that others haven’t seen as yet.
Related Reading: Unleashing the power of experiential marketing,
Trigger Worldwide is a Brand Marketing Agency, built specifically for businesses to create Sustainable Growth. Our proprietary tools and process methodologies harness Technology, Creativity & Innovation, leverage Economic Drivers and Consumer Beliefs to help businesses overcome marketing inefficiencies and achieve their Growth Agendas.
“CREATE AN INSPIRED FUTURE FOR YOUR BUSINESS”
~ Trigger Worldwide