Commoditization: Difference between revisions

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In business literature, '''commoditization''' is defined as the process by which [[good (economics)|goods]] that have [[Value (economics)|economic value]] and are distinguishable in terms of attributes ([[Unique selling proposition|uniqueness]] or [[brand]]) end up becoming simple [[Commodity|commodities]] in the eyes of the market or [[consumer]]s. It is the movement of a market from differentiated to undifferentiated price competition and from [[monopolistic competition]] to [[perfect competition]]. Hence, the key effect of commoditization is that the [[Market power|pricing power]] of the manufacturer or brand owner is weakened: when products become more similar from a buyer's point of view, they will tend to buy the cheapest.

This is not to be confused with [[commodification]], which is the concept in [[Marxian economics|Marxist economic theory]] forof objects or services being assigned an exchange value which they did not previously possess by their being produced and presented for sale, as opposed to personal use.<ref>{{cite web |url=https://rushkoff.com/commodified-vs-commoditized/ |title=Commodified vs. Commoditized |accessdate=2018-11-13 |last=Rushkoff |first=Douglas |authorlink=Douglas Rushkoff |date=2005-09-04}}</ref> One way to summarize the difference is that commoditization is about proprietary things becoming generic, whereas commodification is about nonsaleable things becoming saleable. In social sciences, particularly [[Cultural Anthropology|anthropology]], the term is used interchangeably with commodification to describe the process of making commodities out of anything that was not available for trade previously.<ref>Appadurai, Arjun, ed. (1986). ''The Social Life of Things: Commodities in a Cultural Perspective''. Cambridge UP, Cambridge.</ref><ref>Greenwood, D.J. (1977). "'Culture by the Pound: An Anthropological Perspective on Tourism as Cultural Commoditization". In ''Hosts and Guests'', ed. V. L. Smith, pp. 129-139. Philadelphia: University of Pennsylvania Press.</ref>

==See also==