Tag Archives: commodity

Reducing Hotels to a commodity

April 6th, 2010

You know what the problem of Hotel comparison websites are? (or any price comparison website).

They reduce Hotels to a commodity.

When cheap you focus on rooms as a commodity.

When expensive still focus on room but the real value is in the experience.

Price comparisons don’t communicate that.

What’s the price of a relaxed holiday where everyone smiles at you? Or provides free wifi so you can find the best activities online? Or the fact the room is dead quiet so you can rest?

That’s what we forget when we get stuck in price mode.

Marginal value on Commodity Items

February 25th, 2010

If I gave you $40,000 to go buy a new car, you’d probably go away, scan the car yards and come back with a few options.

You can pretty much guarantee a certain level of safety standards, fuel economy and performance.

Unless you’re looking at Luxury Cars the car itself is a commodity. ¬†You buy it for the brand; experience, status…

This is the exact play that firms are using once their product slips into the commodity category.

You see when everything else is the same firms need to focus on the marginal value, the base value is assumed (safety, fuel economy, performance) – but what is the secret sauce? It may seem trivial but it’s the little things which can swing consumer preference.

You need to focus on that marginal value and stretch it, reposition it, make it meaningful to your consumer base.

Clearly the experience is a start, is being your customer a real experience worth sharing?

Photo Credit: Alex4981

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