e-Course Day 26 Email
SUBJECT: [DIY Marketing] You Didn’t Start Out as a Commodity – So Don’t Become One!
Have you ever been led to believe that something
is a commodity, that is, that it’s so hard to determine qualitative
differentiation between products that they might as well all be
the same? If so, you’ve believed in a myth and are in for some
good news! Pricing is not the answer, nor is giving up. Read on
to learn more about how to get out of a “commodity cul-de-sac.”
Oh, and if you just signed up, you can see the course info we’ve
already covered right here:
http://www.diymarketingmonth.com/e-course-email-recap/
==================================================================
Executives, entrepreneurs and investors are too ready to believe
that commodity is destiny. The result is a dulling of strategic
focus and a narrowing of the business mind.
– Michael Schrage
==================================================================
Bruce Greenwald, a Columbia Business School professor, once
famously said “in the long run, everything is a toaster,” in
reference to his view that at some point, all great innovations
become commodities that are sought by consumers on the basis of
price alone.
By today’s standards, even toasters are more than “just a toaster”
with countless product and marketing innovations over the last 110
years that transformed the simple device into a multibillion-dollar
industry.
Bruce’s flawed conventional wisdom is shared by entrepreneurs
everywhere whenever they encounter a moment of ‘price only’
competition. They immediately reach for the commodity panic button
and slash prices, service, profits and often their own necks in the
process. Innovation and better marketing could have saved them.
** Market your way out of commodity status
Consider price as only part of the equation. Dyson vacuums entered
the US market long after the former market leader, Hoover, had deemed
vacuums a commodity product and priced themselves into a market-bottom
pricing strategy. Dyson now owns over 21% market share in the US
(to Hoover’s 15%) selling vacuums in the $300 – 500 range
(to Hoover’s $75 vacuums).
** Develop differentiation based on competence
Competence based or thought leadership marketing makes your firm more
desirable to buy from based more on what you think and say than what
you make and sell. Gillette, Cisco Systems and even Google (even though
search is “free”) leverage public relations and customer education to
increase market share and profit margins.
** Understand your customers
The most common response to my question “have you asked your customers
what they want and why they buy from you” is a flat “NO.” How can you
say that you’re a commodity, competing on price alone, when you don’t
even know why your customers chose you (and continue to do so) in the
first place? Get out and ask questions.
** Segment, target and position
Often companies are doing business with the wrong customers. When you
serve a market segment that values everything you offer as a company
(including knowledge, competence, price and other tangibles) profits,
loyalty and satisfaction flow easily. When dealing with a strictly
‘economic’ buyer, the rest of your value and differentiation is lost on
them. Review your marketing focus yearly to ensure that you are still
focused on the right customer and make some hard decisions.
** Do commodities still exist?
The more one looks at so-called commodities (anyone buy bottled water
lately?), the more you’ll find that commodity is generally a term in
rhetoric only and often employed by companies who have lost the drive
to innovate, engage in intelligent marketing or truly understand the
value their customers’ require from them. Most commodities exist only
in the mind of the misguided manager. In the long run, not even a
toaster is really just a toaster.
***** ACTION SUMMARY *****
1. Have you ever been caught in a “commodity trap mindset”? If so,
use some of the ideas above to rethink your position and get past
this death spiral of marketing.
Well, that’s all for now. Be on the lookout for next lesson
tomorrow.
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
If you would like to learn more about MarketingSavant’s marketing
strategy, thought leadership or social media services, where you
work directly with me to build your business through strategic
marketing, go to:
http://www.marketingsavant.com/diymarketing
I’ve created a special set of offerings just for DIY Marketing
e-course members.
And, as always… think big and market well!
Yours truly,
Dana VanDen Heuvel
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
MarketingSavant(TM)
Leading Through Thought
Social Media // Thought Leadership Marketing
www.marketingsavant.com
dana@marketingsavant.com
Twitter: danavan
888-989-7771
—
Sign up for the MarketingSavant Newsletter
http://www.marketingsavant.com/newsletter
—
Book Dana to Speak at Your Event
http://www.marketingsavant.com/speaking
—