This is “Versioning Commodity and Standardized Products”, section 4.8 from the book Creating Services and Products (v. 1.0). For details on it (including licensing), click here.

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4.8 Versioning Commodity and Standardized Products

Standardized and commodity products can also be versioned. Sometimes, the high-end product is not even that different from the mass-appeal product or even the low-end product. Marketing efforts via branding may have instilled the notion that the product is better than another product with the same features. As illustrated in Figure 4.6 "Differentiating a Standard or Similar Product", the way to sell a standardized product to the high end is to have a distinct brand, offer extended warranties, deliver products and services faster, or all three. This happens in the auto business, commodities markets, and the entertainment industries. There are also ways to sell a standardized product to the low end without upsetting individuals who purchased a product at a higher price. This can be accomplished by offering customer rewards programs, having customers use coupons, and delaying the shipment of a product. If you buy months ahead from the airlines, you can sometimes get a better price than an individual who buys ticket days before departure. Rebates are also a way to sell at a lower price for standardized product. The product is not the same because of the hassle of filling out the documentation and the uncertainty that comes from not knowing whether the rebate or coupon will be honored.