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When Your Product Becomes a Commodity
How often have you heard a manager blame "commoditization" for failing to
deliver sales or profits? If you've heard it, you've probably wondered if it
was just a convenient excuse or if the manager had a valid point. |
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The
truth is, even when a raw material has no value added and quality standards
are set by law or the industry, there is still plenty of opportunity for
differentiation around availability, delivery, shipment quantities, payment
terms, and all the other services that accompany the core product. Marketers
must use their imagination. As the saying goes: "There are no mature
products, only mature managers."
That said, intense global competition, outsourcing, and offshoring are all
squeezing margins, increasing customer price sensitivity, and making it
harder to sustain inter-brand differentiation. The product life cycle
suggests that, as product categories mature, they become more susceptible to
the forces of commoditization. The difference today is that the speed from
launch to maturity is faster than ever before.
Read more from the source |
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