How to Avoid Commoditization Through Differentiation
By Mike Press
How Technology Marketing Course Concepts Apply
The marketing team became convinced that sales was not “selling the right thing.” If all of the suppliers had the same chips but we continued to command higher price, then the Company must be supplying some Whole Product value that we could not see. The definition of Augmented Product is that the solution is unique in some way, and the benefit to the supplier is the ability to take market share at higher price. Clearly, we needed to understand our Differentiation from the customer’s point of view.
The more marketing discussed this issue, the more convinced we became that without a definition of our augmented product, the Company could not maximize and sustain its leadership. If we were getting a 20% price premium, why shouldn’t we get a 30% premium? Was the Company making the appropriate investments to continue to augment our solution? What if a competitor understood our augmented product and managed to counter, would we know what had happened to us or how to respond effectively?
Strategy
We determined that the first step was to spark a conversation between leaders in Marketing, Sales and Management using a common vocabulary and framework to approach the augmented product issue.
