Turning a Commodity into a Premium Product

In the marketing world, having your product labeled as a commodity can be a death sentence. Often, one consumers believe all products within your category are more or less the same, the only way to distinguish yourself is by offering the lowest price. This is no fun! It drops margins down to the minimum and also leaves little room for creativity for good marketing.

At least this used to be the case. Starbucks is a shining example of what a company can do to turn a commodity into something more, and they have done it with good strategy and effective marketing. It started with creating a unique in store environment. Instead of having a small, in and out type of location, Starbucks started the process by putting couches, tables, playing music and offering WiFi in their cafes. This move was important to differentiate itself from the competition. Starbucks also offered endless customization and emphasized customer services from their baristas.

Instead of pounding these differentiating factors into consumer minds through commercials, magazine ads or other advertisements, Starbucks made another interesting strategy decision; they let word of mouth and curiosity drive customers to their cafes. This move saved them money that they could reallocate toward expansion and improving the cafe experience.

Finally, Starbucks made it's boldest move at the register; by charging almost double for a comparable product to what was offered at Dunkin Donuts and 7/11. Paired with the cafe experience, customers were happy to pay the extra since Starbucks was now perceived as a luxury product. Getting coffee at Starbucks was less about a quick caffeine hit or a warm drink. It meant being social, or relaxing, or studying with music, and this change left competitors scrambling to match the brilliant shift in the product category.

Sometimes in marketing less is more, and Starbucks made this an integral part of their philosophy. They  teamed their marketing department with their business strategy team and realized that a minimal marketing campaign built curiosity and drove consumers to the cafes. All in all, this formula turned their coffee from a commodity into a premium product with enormous margins. We will see if more commodity producers can replicate this success to build differentiation and minimize the price wars that come with being commoditized.      

Creative Execution for Cuties

As the semester finishes off, I thought I would share the final product for our Cuties creative pitch. Our group simulated working with an agency and used their creative brief to develop some creative executions and big ideas. For this piece of creative, we used the big idea of "Don't get left at the lunch table."

After using a "Day in the Life" (as mentioned in my last post) we realized that our target consumer looks for snacks that are quick easy to eat so that they can get out and play. Lunch is not a long, social process like it is for other consumers. Our target values efficiency, and being the last one at the lunch table is like being the last one picked for the dodgeball team. That's how we developed our big idea, and that led to this creative execution:

Day in the Life

As my group continues to work toward submitting some creative ideas for Cuties (based on the brief submitted by another class group) we have tried a few different activities to inspire ourselves and get our creative juices flowing. One that our professor recommended is running through the target consumer's day minute by minute, in as much detail as possible. At each step it's important to pursue the motives and drives, "WHY does the target choose to do what they do, and why do they do it in the way that they do?" It takes being thorough and almost nosy to a point, but in the end is extremely beneficial.

This "Day in the Life" process can improve creative ideas in a couple ways. On the practical side, understanding the activities and interests of the target can guide which medium of media to use and how to engage the consumer. It's important to have a "place" where the brand and the consumer can "meet", and knowing when the target is going to be receptive or engaged is vital in developing that setting. For Cuties, we were able to eliminate various media channels for our target consumer understanding that he did not use magazines, social media or pay any attention to radio.


The other major insight a "Day in the Life" can provide are the pains and challenges that the target consumer is faced with everyday. Having a better understanding of this can make marketing the product more relevant and effective, especially since clients sometimes have distorted views of their product or customer. Although clients often conduct their own market research, using the "Day in the Life" process can ensure that their findings are indeed useful and sometimes reveal new insights about the target.

This new tool can help guide good creative and inspire myself and others as I continue my career in marketing, and I am excited to offer it to other peers as I continue with group projects throughout next semester.