From Commodities to Premium Priced Products
Let’s take a look at a few examples of differentiation.
Bottled Water: Why would we pay more for a product that comes out or our faucet for essentially no cost? Images and perceived better taste and quality have led to a multi-billion dollar business. Fiji Water comes from the Fiji Islands and is regularly sold in the United States. Think about the profits involved that allow companies to ship water half way around the world.
Gasoline: All brands of gasoline are derived from oil. The oil is shipped in enormous tankers and then refined. One barrel should be the same as the next. What is different between brands like Exxon, Shell and Gary’s Gas and Grub? The “secret sauce” of additives and hundreds of millions dollars spent on branding. Is generic gasoline really inferior or a bargin?
Eggs: Chickens lay millions of eggs each year. Other than size what is the difference? Eggland’s Best brand eggs claims to be better for you. Eggland’s Best receives prominent shelf space right next to the store brand eggs. Should I buy a product that can easily cost twice as much money?
Differentiate your products to make them non-commodities. Your branding helps to show your unique selling propositions.
Those are my thoughts. Over to you. Please comment below.
- How have you differentiated your products or services?
- How have you been able to rise above commodity pricing for your products and services?
- What other examples of commodities that are differentiated can you share?