Viper Marketing

Commoditisation is Everywhere

Author: Neil Wilkins

Neil learnt his marketing with the likes of Orange, NatWest, BP Castrol and Ordnance Survey and now helps individuals and businesses to communicate more effectively. He trains and mentors marketers on professional Chartered Institute of Marketing qualifications through to post-graduate level.

The simple answer is generally not at all. Whilst on the surface the commoditisation of a product or service seems to offer huge benefits in terms of customer value and increased volume sales but in the medium to long term it creates significant challenges in terms of profitability and sustainability.

Take for example today’s news that Orange has been given the Apple iPhone to add to its portfolio in the run up to the Christmas sales bonanza. O2, previously enjoying exclusivity of this landmark product now has to compete on service, accessories and after sales support in what we know will quickly turn into a price war for share of consumer spend towards the festive season and into the New Year sales.

Whilst Apple are happily rubbing their hands together at this strategically created battle of two titans in the communications industry, the longer term effects of a spiralling price fall will, as it always does, reduce the overall market value of this ground-breaking gadget.

So jump on the band wagon now whilst you the consumer can benefit from the pricing warfare but don’t expect things to always be this way, because as prices and margins drop the danger is the sparring factions will run out of cash needed to innovate… and all we’ll be left with is… just another commodity….

- Posted on Thursday 01 Oct 2009 at 05:38 by Neil Wilkins

Tags: 02 (1), apple (3), brands (1), communications (23), companies (5), iphone (10), orange (1), products (7), sales (4), services (4), strategic (13), support (3)