Even Cattle Branding Won’t Save You From Commoditization

So, you own a herd of beef cattle and so does your neighbor.  The cattle graze in adjacent fields with the same grass, soil and climate.  They are cared for in identical manners.  You both engage the same veterinarian and are serious about the health of your herd. You and your neighboring cattle rancher get along just fine, until one day it happens.

Your neighbor’s barn is destroyed by a tornado that doesn’t touch your property.  Lucky you! Or maybe not. He needs to rebuild, which means he needs to fund construction. So, he decides he needs to sell more cattle that year.  So what does he do to entice buyers to buy his beef over yours? Yep, he lowers his price by two cents a pound.  When you’re buying cattle that’s a significant savings!  Suddenly you realize that in order to compete you’re going to have to give people a better reason to buy the same product from you.  So, you lower your per pound price by two and a half cents.  And the race begins. The two of you have commoditized your product and it’s a race to the bottom to see who is willing to take the smallest per pound profit.

Now you’re lying awake at night, tossing and turning, because you are completely stressed out from the price gouging.  You ask yourself, “how can I raise the perceived value of my cattle so that I can charge more per pound and exit the PPPC (Price Per Pound of Cattle) war?”  In the middle of the night, well after you have finally fallen asleep, your inner, wiser self-awakens and answers.  You realize you should get a really cool branding iron and brand all of your cattle so that they appear special.  You go out and have a graphic designer from Fiverr design a beautiful SB logo for your Super Beef cattle.  It only costs you $15 because graphic designers have been commoditized as well.  You brand all of your cattle and low and behold it works!  People perceive your brand as more valuable because it literally has a brand and a logo.  They are willing to pay more for your product.  It works so well for you that you get on the branding bandwagon and create big iron gates to your farm with an SB on them.  You redesign your packaging to reflect your new brand. You take your new brand to the limits and then it happens…

Your neighbor sees what you are doing and decides to enter the branding game as well. He hires his nephew who has some design skills and just like that you two are back in a race.

Overnight it becomes clear that branding is not the singular solution to winning said race and you may in fact have become a commodity.

A business becomes commoditized when your consumer cannot tell the difference between you and the next brand in your industry, and thus depends only on price to make his purchasing decision

At this point it has either become clear to you that the road ahead looks bleak and with each new competitor jumping into the fray, offering similar products at even lower prices to gain market share it looks even bleaker. It’s a realization that can make any business owner want to throw their hands up, pour themselves a drink and give up.

Depending on the strength of the drink you have chosen to ease your pain it has likely been distilled.

Distilling is defined as:

the process of extracting the essential meaning or most important aspects of something

Suddenly it all becomes clear,

You ARE special. Hell that’s how you made it this far.
You must distill that special ingredient, throw down the gauntlet and let everyone know you are not one of the many choices but THE ONLY choice.

You must become Decommoditized ™!

Rest assured, every business or brand with enough courage can be decommoditized.

For some it might take a creative deep dive to pick apart the puzzle, while others can take a more analytical approach. It may be harder than it seems once your pen hits the paper but it is absolutely possible. 

If you want assistance in uncovering the factors that will make your brand stand out from the other straws in the haystack, or would like to learn more about our Decommoditization process, contact us now

Nick Ambrosino

Chief Integration Officer

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