Commoditization as a driver for service transformation

Abstract

The differentiation of goods and service in the marketplace is one of the core tasks of marketing. Levitt (1980, p.83) notes that “[t]here is no such thing as a commodity. All goods and service are differentiable”. Regardless of firms’ efforts to promote the unique selling propositions of offering and differentiate them from competing offerings, however, goods and services with an initially high degree of differentiation might still get caught in the commoditization trap (Enke/Leischnig 2014). Today, buyers have access to different kinds of information can choose from many options and, as a result, have higher expectation than ever before (McQuiston 2004). At the same time, buyers are over-whelmed by the multitude of very similar goods and services. Despite several objectively differentiating features, buyers perceive offerings from different suppliers as interchangeable. This holds for typical commodities such as agricultural products as well as for a growing number of industrial and consumer goods. Companies in the latter industries do not deliberately position their goods as commodities but rather experience a commoditization pull(Rangan/Bowman 1992).