Marketing Research Blog

Elevate a Commodity to Premium Status

When does a “commodity” become something more? When do we care enough to pay more for something that ostensibly has less expensive alternatives?

It must be good enough, or better enough, to convince consumers that it is worth a greater share of their scant resources to obtain. It has to double-dare, pinky-swear that you will not be disappointed—and deliver.

Once upon a time, a technology company that manufactured an invisible component of a trendy, “newfangled” device managed to become a household name and the preferred, aspirational brain for our computers. We could not (easily) see these silicon wafers, but we were told by confident salespeople, (not necessarily) in-the-know friends and relatives, and clever ads that these magical boxes were better because Intel was inside—and who would not want the best??!

But did most of us understand the “why” or “what” that made this hard-to-get-to, mysterious, central part of the home computer “fad” that was taking over our living rooms and landline connections better? Not really. Most of us at that time would not ever see or touch it—or interact with it directly—but we instinctively knew that the processor “brain” must be important, and something that had arguably started as a commodity became a recognizable brand that commanded a premium.

Similarly, when it comes to our vehicles, do we know the brand and/or variety of oil we use? If we rely on our dealerships, do they tell us, or provide a choice of which brand is being used? Do we ask or even care? Not really—we just want the right “stuff” to be used to keep us racking up miles without incident, and we trust them as the manufacturers agents to deliver it.

Meanwhile, there are some branded oil change shops that proclaim the brand behind the dino-juice (Valvoline Express, Pennzoil, etc.), and yet others that are branded service options (Jiffy Lube, Midas, Firestone, etc.) that are less likely to flaunt the “manufacturer” of the oil they use. These offer interchangeable branded solutions that motorists seek out based on familiarity, name recognition, convenience, habit, or the latest coupon. Yet when it comes to the DIYers of the world, brand DOES seem to matter and grow in importance! Consumers have their go-to lubricants based on their personal history with the brand; a relative might have used it when showing them how to change their own oil, or it might have sponsored the local sports Team or arena…the reasons go on and on. Further, certain motor oil brands have become synonymous with racing performance, longevity, or vehicle class. Yet alongside these stalwarts of the evoked set reside the Private Labels/Store Brands that offer discounted, generic lubricants proclaiming similar performance for a lesser price.

So, when do these commodities (components, utilities, lubricants, oranges, etc.) become something more? When we assign value to intangibles. I am not certain if it is hope or faith—perhaps both?—but our tendency to believe that a brand (Intel, Spectrum, Mobil, Sunkist, etc.) can bestow performance characteristics that make a choice between seemingly identical options somehow “better”. The brands that manage to break through the “noise” and elevate their product(s) to a premium status in a sea of commodities are not only delivering on their promise of having a great product, they are adept at leveraging both insightful research and crafting a compelling marketing strategy. They often have the following in common:

1. They understand their target audience beyond simple demographics.
   These brands understand their customers’ aspirations, pain points, and emotional drivers related to the product category, and build a strong connection with their audience. When customers purchase Mobil products, they don’t just purchase gasoline or oil – they buy safety on the road and long engine life for their vehicle. The brand ties compelling stories related to the product’s origin, production process, and the people behind the brand that resonate with their customers.
2. They craft a strong brand identity.
   One of the classic examples of a brand rising above its commodity status is Morton Salt. They did it by creating a very memorable brand icon (the Umbrella Girl) and the slogan "When it rains, it pours" (meaning that the salt will not clump even in humid conditions—brilliant!). This has been the brand's signature for over 100 years, and it still makes consumers reach for the distinctive blue cylindrical package over the store brand. The brand was able to build a level of trust, familiarity, and perceived value and is able to command a higher price.
3. They create premium brand experience.
   It is hard to find a cookware brand more iconic than Le Creuset. Its products’ vibrant colors and classic French design make them instantly recognizable and highly coveted. The brand emphasizes the superior performance and longevity of its cookware, positioning it as investment, and the clever marketing and storytelling connects the products with a certain aspirational lifestyle.
4. They build brand trust and credibility through transparency and authenticity.
   Grains usually come to mind when we think about commodities, and most of us would be hard-pressed to name a brand in this category, yet one stands above the rest. Bob's Red Mill has successfully built a loyal customer base by consistently delivering on their promise of high-quality, minimally processed ingredients and by fostering a sense of transparency and genuine care for their customers' health and well-being. Their authenticity, rooted in their product philosophy and the approachable persona of their founder (“the Bob factor”), has been key to their success in a commodity-driven market.

Elevating a commodity product to a premium brand is all about highlighting differentiation and creating perceived value beyond the basic functional promise of the product. This work requires a deep understanding of the target audience.

Identifying meaningful points of differentiation through research can help craft compelling and cohesive marketing stories, building trust with customers and justifying the products’ premium price. Staying focused on the long-term vision and maintaining consistency in this process are crucial.

John Gachelin

Senior Vice President Global Research

Email John

John has more than 20 years of marketing research experience and has worked at Decision Analyst for over a decade. He has a strong background in Global Research and is currently leading the Global Research Team. In addition to having lived and worked in the U.S., Indonesia, and South Africa, has conducted both B2C and B2B research across a myriad of categories around the world. A dual-national (U.S. and France) who grew up in both the United States and Switzerland, John is a native English and French speaker and has a basic command of German.

Katia Delgado

Research Director, Global Research Team

Email Katia

Katia has more than 15 years of experience in both quantitative and qualitative fields, including exploratory research, customer satisfaction tracking, brand positioning and impact, new product development, and custom research. She has extensive expertise in creating studies that reflect unique challenges and opportunities organizations face, developing original instruments rather than using “canned” solutions, and telling impactful stories that challenge assumptions.