Commoditization occurs when a product or service becomes so common and interchangeable that it is primarily seen as a commodity, with little differentiation or added value. To avoid commoditization, businesses must focus on creating unique value propositions, building strong brands, and fostering customer loyalty.
The importance of avoiding commoditization cannot be overstated. When a product or service becomes commoditized, it becomes more difficult to charge a premium price and maintain profit margins. Additionally, commoditization can lead to increased competition, as businesses are forced to compete on price rather than value.
