The Commoditization of Products and Brands

Commoditization makes it more difficult than it has ever been to maintain a lead over one’s rivals. Commoditized goods, even in categories such as mobile phones, drinks, and soaps, are sold by thousands of businesses throughout the globe. As the level of commoditization goes up, brands lose their uniqueness in the market.

The process of commoditization takes place when the market considers different brands to be interchangeable.

This was the situation in the airline and auto insurance industries in the early years of this century, when online marketplaces allowed for greater transparency and increased commoditization pressures. Online marketplaces also make it possible for consumers to make more informed purchasing decisions.

When taken as a whole, these changes affect how value is distributed within an industry. When prices go down, there is less money available for profit overall. At the same time, the way that value is shared between producers, distributors, and customers is also changing.

Commoditization occurs when the primary distinction between several sellers of an item or service is the price at which they provide it. This is shown by several cases both inside and outside the technology industry. In the past, for instance, there were only a few businesses that manufactured and marketed laptops and other forms of computer equipment.

However, as time went on, other rivals joined the market and offered computers that were almost similar but sold for different prices. Most of the time, the only difference between laptops made by one company and those made by another is the price, since the underlying technology and software aren't that different. As a result, laptops have developed into a commodity.

You can find various variations of the same product at any retail location.

You will get items with well-known brand names as well as items with unknown names that are priced much lower than the items with well-known brand names.

This tactic is used by local businesses to produce items that are similar to those sold by competing brands in the market but at much lower prices. Using this strategy, they divide the market share among the businesses that were responsible for creating the product.

For example, Bisleri, Kingfisher, and Aquafina are some bottled water brands.

If we look at the product category described above, we will see that there is no discernible brand preference. We are prepared to choose any one of them based on the availability and pricing of the options.

The technology sector is one that actively pursues new inventions and developments. However, it is a market that is saturated with things that may be considered commodities. Take, for instance, computers, hard drives, headphones, etc and other such items. These items are examples of commoditized goods, and the only way to differentiate them from one another is based on their prices.

Electronic products like mobile phones, air conditioners, TVs, microwaves, and refrigerators can become commoditized if they are sold in a certain price range. A mobile phone costing Rs 40000, for example, has more advanced capabilities than one costing Rs 20000.

The clothing industry is saturated with highly commoditized items. The clothing industry is home to thousands upon thousands of different brands. In this sector, it is simple to turn products into commodities. Because of this, companies that make clothes have to keep the prices of their goods in line with what the industry says is fair.

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