The closer one gets to the commodity side of the monopoly-to-commodity continuum, the more pricing becomes a critical element. Customers won't be able to discern the difference between you and your competition unless you have a cheap pricing.
Most goods and services become commodities sooner or later. What can we do if we get caught up in the commodity market? Cashing out and moving on is one option.
But, if you want to triumph in a commoditized industry, keep reading! A mix of the following tactics will be the winning recipe for your case:
Conduct customer-voice research. You should speak with as many prospects and clients as possible. Think about focus groups. You want to learn everything you can about your clients and prospects.
Learn about your consumers' goals and aspirations, as well as their pain spots, must-haves, price tolerance, competition information, and impressions of your company or brand.
Then confirm. Create a survey using the information you've gathered (online, phone or mail). Obtain a sufficient number of replies to guarantee accurate and actionable results. Consider collaborating with a research firm to obtain the essential skills for accurate surveys.
The most significant investment you can make to win in the marketplace is research. Everything that follows will be guided by the survey results. This is your map. Most businesses can segment their clients using reliable data, allowing them to adjust the mix of tactics that follow.
Your research findings might help you determine whether to improve your present products or services or hunt for new markets outside of your core—a process known as “market adjacency”. You could have discovered a gap in the market. Or you may have discovered an “ingredient” that you can use to make your product stronger, lighter, or quicker. Perhaps you discovered a technique to provide your consumer with exceptional convenience.
You can opt to concentrate on a commodities market, industry, or area that you or your rivals are currently underserved in. On the other hand, you can determine that some customers, markets, or regions no longer suit with your new strategy. They've been fired. You can't be everything to everyone.
Make personalised products or services available based on your client segmentation study. Give them exactly what they want, exactly how they want it. Give them nothing they don't want. And charge appropriately.
Analyze your data and determine how to get your product into the hands of your clients. Have you discovered that your consumers, or portions of your customers, prefer to work with you only online, never seeing your salespeople? Have you discovered that additional consumers desire to buy your goods through a third-party in addition to other items they already purchase from them? Is it more cost-effective to licence your brand?
Perhaps you discovered that some of your consumers, or a subset of them, want a more personalised experience. Customer experience is increasingly becoming a differentiator. Using a customer relationship management technology makes it easier and more cost-effective to fulfil each client's unique demands.
Reducing the size of the battleground, such as focusing on a smaller region or industry group, demographic or psychographic, allows you to better understand and interact with the particular demands.
You may have discovered consumer segments with distinct requirements. Client personas are today's prevalent word for each customer category. Develop your customer care experience around each character based on your study. Make careful to track your progress and make improvements as needed. Adjustments might include discontinuing service in one section while increasing efforts in another.
Your research may assist you in determining which consumers to target with your greatest differentiators and developing customised messaging for each client touchpoint.
Any product may be distinguished. Only in the United States, almost 200 bottled water companies compete. The ultimate commodity may be water. Many are doing extraordinarily well because of their specialised packaging, marketing, and advertising.
Example - Frank Perdue doesn’t believe that chicken is a commodity. “It takes a rough man to cook tender chicken”, he says. Frank makes a lot of money selling chicken. Bananas with Chiquita branding. Pineapples with Dole branding.
Geico's gecko, Progressive's Flo, Farmer's “We know a thing or two because we've seen a thing or two”, and Allstate's Mayhem all produced symbols or brand badges to stand out in the commoditized insurance business.
We selected pricing as our last approach on purpose. You won't have the knowledge you need to price your items or services optimally until you've gone through the previous six tactics. Price may be included into your product in a variety of ways. Payment terms, a subscription model, faster turnaround, bespoke stocking and delivery, technical assistance, and a warranty programme are all among them. Consider rewarding your salespeople based on profit margin rather than sales revenue.
We all want to sell more of our products or services for more money. That is why you should create a brand. The differentiators you identify must be one-of-a-kind, as distinct as feasible from your rivals' products, and relevant to your customers. This is where your brand's positioning begins.
Your position on the monopoly-to-commodity continuum will be determined by the extent to which your differentiators really differentiate your product or service. Setting your ideal price reflects your position on the commodities market's spectrum.
This method is both scientific and artistic. It's not ideal, but it's a fantastic starting point for helping your company succeed in a commodities market.