These days, everything’s becoming a commodity – or on its way to becoming one.
It must be true, because the gurus tell me so. Columbia business professor Bruce Greenwald summed it up years ago. “In the long run,” he said, “everything is a toaster” – that is, a commoditized product.
Toasters sure seem like commodities. They all do the same thing. They all do it more or less the same way. And most of them do it pretty well. So if you’re selling toasters, the only way to compete must be on price, right?
I searched for toasters on Google Shopping the other day and got 60,772 results. The first one — a Cuisinart CPT120 2-Slice Toaster — was priced at $15. The second — a Dualit 26102 2-Slice Toaster — costs $70.
Since toasters are commodities, I guess I’d be an idiot to pay $70.
But wait: Each slot on the Dualit is “extra wide and automatically adjusts to accommodate bagels and buns. There is also a high lift mechanism for easy removal of small items along with a Peek and Pop feature, defrost and bagel toasting buttons.”
On the other hand, the Cuisinart is specially designed for small counters. That’s something to think about.
Or maybe I should go with the Krups TT6190 Prelude 2-Slice Digital Toaster. At $52, it’s a toaster that will change my life, according to Bertrand, a Google Shopping reviewer.
Imagine that. I thought I was buying a commodity, and I’m about to have a life-changing experience.
Pick a product, any product, and you’ll find the same thing. According to an article in Sloan Management Review, toilet-paper executives at Scott and Procter & Gamble don’t worry about commoditization. They invest big in R&D and are constantly improving their products. Generic competitors haven’t eroded their market share or margins.
So what is it you’re selling again?
Whatever it is, I can guarantee you it’s not a commodity. And it’s up to you, dear salesperson, to prove that to your customer.
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