The rise of digital has also caused the rise of commoditization across a huge range of industries and it is having a significant impact on the field of marketing.
Commoditization simply means products or services become more available and interchangeable with similar products or services. Because of this, differentiating your offering and standing out in the marketplace has become increasingly difficult.
An example of something that has is commoditized would be headphones. You can find them almost anywhere both online and off and dozens of companies make them. With hundreds of versions to choose from they have become mostly indistinguishable from each other with some exceptions such as Beats by Dre.
This stand out brand in a commoditized product field perfectly showcase the impact of commoditization on marketing as well as the impact marketing can have on it.
Running a standard marketing campaign where you get the word out about your product in this field would have little impact as there are 20 others like it with similar design and price points. The brands that actually do stand out opt for an influencer/lifestyle approach to distinguish themselves.
Looking at the Beats by Dre example in more depth, you can see the impact that building a brand and an image of quality/exclusivity can have to not only make you stand out, but also increase your profit margins dramatically.
For instance, current iterations of Beats headphones retail at or above $300 yet cost of production has been estimated to be a low as the $20 range. Beyond the huge markups is the quality. Yes, they are solid high quality headphones but they are far from the best on the market especially when considering quality/cost, yet their demand remains as high as ever.
This is where marketing overcomes commoditization. Beats have transcended quality and simply become a status symbol. They constantly update their image leveraging collaborations with some of the largest celebrities in the world like the Kardashians or Lebron James and focus heavily on product design. With star power like that influencing the customer base, its no wonder that quality sakes a back seat to style.
While this is an extremely large brand as an example, we see this shift in marketing trickling down to smaller brands and products. Influencer marketing is on the rise in a huge way and with the generational shift in the way we consume media this will only continue to grow.
There is no better example of how the newer generation of influencers are changing the way we market for business than Mr. Beast. At only 24 years old he has become the largest youtuber in the world but more recently he has leveraged this YouTube fame to launch some unexpected businesses. In late 2020 he made a completely unexpected play into making burgers by launching MrBeast Burger, a virtual restaurant that delivers MrBeast themed burgers.
There was no natural segue from his video content into opening a burger establishment yet it worked, and far better than even he expected. His star power led to a huge demand with little to no direct marketing for the product. What started as a short term test with virtual kitchens (only supposed to run for a limited time) has now morphed into a national chain with physical locations popping up and huge plans for expansion.
All of this was possible in a hugely commoditized field with no end of competition including some of the largest brands in the world IE: McDonalds. This showcases the outsized impact influencers are holding, especially on the younger generations who are becoming a larger part of the decision making power for the consumer base.
In summary, commoditization will only increase as technology makes nearly everything easier to produce and deliver. Marketing is evolving with it. Social influence and brand building are poised to be the powerhouses of the future and brands need to adapt their approach to take advantage of these shifts.