Context

Rise above commoditization

Don’t live and die on price alone
We are in the midst of a massive information revolution that is being driven by the Internet.

Specifically, the easy access to information has dramatically changed the balance of power. Now buyers can comparison-shop on a global level without ever contacting a seller.

Consider the significance of this if you are a seller. You may not have a chance to make your pitch. You don’t know a customer is even shopping. They have no need to contact you or visit your store or showroom. They can buy from your site if you offer e-commerce, or come into your store. In either case, when the customer comes to you, they already have competitive quotes and reviews in hand.

If your products are basically the same as your competitor’s, if your brands don’t stand for anything unique or desirable, the only negotiation left is price. And that leads to razor-thin margins where most companies can’t survive for long. Market forces are working to commoditize you. You must battle against it.

How do you fight back?
If you can introduce notable differences in your product attributes, you have the chance to “un-commoditize” yourself. Can you change your products functionally? Can they be customized? Can you deliver them faster? Offer a better warranty? Can you provide additional information to accompany the product?

Any of these may take you out of an “apples to apples” comparison and allow you to charge a premium for that difference.

Can design make the difference?
Design is now more important than ever in consumers’ buying decisions. In our fast-paced twitch-decision world, being “hot” counts big time. In many product categories, surface equals substance.

More and more, people buy on emotion and justify with rationalization. Design elements such as graphics, colour and shape are all highly emotional. People buy cars because they like the colour and the styling. They justify their decision by reading the specs. The same holds true for clothes, cosmetics, sporting equipment, even business-to-business equipment and furniture.

Consider Apple’s iPods. They weren’t the first MP3 players. They may not be the best. But that’s irrelevant in the consumers’ minds. Everything from their advertising to their functionality, distinctive shape and shiny white finish are immediately recognizable. That combination has catapulted Apple to owning the personal entertainment category.

When customers shop for MP3 players, most don’t comparison shop. The only questions are, which iPod can they afford, and would they like Apple to add a personalized engraving free of charge?

And that leads to sales of over 42 million units (70% market share), 20% margins and all-time high stock prices.

What about your business?
What can you do to un-commoditize your business? Evaluate your products from an emotional perspective. What are those real, critical “wows” and “must-haves” that create meaning and value?

Do your customers want – not need, but want – your product? Do they get passionate about them? Do they send you fan letters?

What about your marketing, advertising and other communications? Are your brochures “keepers”? Do customers email the link to your Web site to their colleagues? Do they subscribe to your email lists?

This is the big idea
These are the things we think about at Context Creative. With competition coming from everywhere – China, India, the guy in his garage down the street – you must work harder than ever to make your brand have meaning, memorability and visibility.

We like to think that it is our curiosity, analytical thought leadership and creative insights that makes us dig deep and do whatever it takes to help make you a success in the marketplace.

Whether you are launching a new product, creating a new marketing model or recharging consumer behaviour, Context can help brand, market and communicate your products or services.

If you’re ready for a fresh look at your marketing and communications, call us at 416 972-1439 or contact us.