Toward an understanding of industry commoditization: Its nature and role in evolving marketing competition

Martin Reimann, Oliver Schilke, Jacquelyn S. Thomas

Research output: Contribution to journalArticlepeer-review

59 Scopus citations

Abstract

This paper aims to improve current knowledge on the commoditization of industries, a unique phenomenon of evolving marketing competition characterized by increasing homogeneity of products, higher price sensitivity among customers, lower switching costs, and greater industry stability. As commoditization is relevant to an ever-greater number of diverse industries, this research addresses two main questions: (1) How can managers assess their industry's level of commoditization to be better informed about their firm's competitive environment? and (2) How does the level of commoditization in an industry affect the effectiveness of marketing strategies? Initially, in-depth field interviews identified the characteristics of the commoditization phenomenon. Subsequently, a survey study among 141 companies from ten industries applied a measure to assess an industry's commoditization level. The results showed significant differences between high and low commodity markets in terms of the impact of three different strategic orientations on firm performance. The application of the value disciplines framework revealed that as commoditization increases, operational excellence and product leadership lose impact, while customer intimacy becomes a more vital performance driver. The results indicate that commoditization assessment may become a vital part of a firm's strategic efforts to address evolving marketing competition.

Original languageEnglish (US)
Pages (from-to)188-197
Number of pages10
JournalInternational Journal of Research in Marketing
Volume27
Issue number2
DOIs
StatePublished - Jun 1 2010
Externally publishedYes

Keywords

  • Marketing strategy
  • Survey research

ASJC Scopus subject areas

  • Marketing

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