Competing in a Commoditized Market
Working Knowledge from HBS just published an article by Harvard prof John Quelch, Senior Associate Dean and Lincoln Filene Professor of Business Administration at Harvard Business School. It’s an insightful look at how to compete in commoditized market.
Selling a product in a market where the forces of commoditization are at play is challenging to say the least. John has some great tips on how to make money and prosper in this environment.
Innovate. A new product that better meets consumer needs, even an upgrade of an existing product, can one-up competitors and force them to invest in matching or exceeding the new specifications.
Bundle. Selling a commoditized product with differentiated ancillary services (such as after-sales service) can appeal to buyers willing to pay a premium for the convenience.
Segment. Mature markets are large markets that can be divided profitably into multiple segments. Marketers can focus on providing applications expertise for less price-sensitive customer segments for whom the product is still important.
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