Defying Commoditisation in your Market

Richard Storey
M&C Saatchi

This chapter concerns one of the most damaging phenomena in business – consumer indifference.

Markets where customers are uninterested in their choice of brand or service tend to destroy value over time, rather than create it. That's because businesses in such markets learn at first hand how to deploy the single most powerful marketing weapon at their disposal – not advertising, but price.

Decreasing price to increase a brand's fortunes is a dangerous drug. Whilst its effects are often dramatic and instantaneous, its repercussions are insidious and long-standing. Businesses that chase volume by cutting price invariably end up sacrificing value, sometimes in the short term and almost always in the long run. Indeed it has more or less become the standard opening for an IPA Effectiveness case history to outline a tale of woe about market stagnation, descent into price promotion and the rise of own label and other cheaper brands.