Marketing Commodities, Now That’s An Oxymoron

Originally posted by Channel Marketing Insights, written by Anna Johnson.

 

fusion_b2b_marketing_commoditiesExperienced marketers spend years honing their skills to identify ways to differentiate their product from the competition. And as traditional differentiators like price, quality, and features become more uniform across the competition, the marketing differentiating tool becomes obsolete. The mistake that’s often made, however, is the idea that commodities don’t require marketing. In fact, the opposite is true.

Channel Management Insights sat down with Eaton Electrical’s Channel Operations Manager, Tamie Janocsko, to learn what marketing techniques the company uses to help grow its business. While other companies fear the risk of their product becoming a commodity, Eaton Electrical embraces it. There’s a certain freedom when you abandon the rules you learned in Marketing 101. Once released from the dogma of product marketing, you can start to see new opportunities in parts of the business that you never saw before. Do you think that Eaton’s best practices don’t apply to your business because you happen to be the clear market leader based on traditional differentiators? Think again. The following insights, while especially useful for marketing commodities, are not entirely novel. All companies can reap the benefits.

Uncovering the Opportunities

So how does marketing make an impact when selling a commodity? “Determine the areas during the selling and buying process that are invaluable to your customer. Chances are you will uncover a new opportunity for differentiating your business,” says Janocsko. For Eaton, they discovered a long time ago that customers were loyal to their distributors. If Eaton could win distributors’ business over the competition, then Eaton’s revenue would grow. “Changing the focus of our marketing efforts to making meaningful connections with over 2,200 partners helped us to differentiate our company in a new way.” Janocsko continued, “So we set out to design a selective partner program where Eaton was instrumental in every partner’s success.” Here are three ways that Eaton Electrical’s partner program helps them to differentiate themselves from the rest of the competition.

Exclusivity is Rewarded, Not A Requirement

At first glance, Eaton’s partner program levels of gold, silver, and platinum are seemingly generic…in name only. But take a peek at the benefits for each level and discover an impressive and cohesive program strategy that enables partners to be successful. At each level there is training, certification, price discounts, rebates, and marketing and sales support that is perfectly configured and packaged based on the level of commitment from each partner. In addition to these benefits, Eaton carefully selects partners that exclusively sell their products. Exclusivity is rewarded, but not a requirement to participate in the partner program. The partner’s level of commitment determines the  level of benefits. For example, “The prestigious platinum Eaton Electrical partner level is very selective and offers preferred pricing among other program benefits that gives them a competitive edge over other distributors in their local market,” says Janocsko.

Solution Selling

Eaton has invested a lot of time, training, and materials to support solution-based selling. Their distributors almost always bundle other materials and services with Eaton products. So Eaton has taken the initiative to create marketing and selling materials to support different solutions ranging from alternative energy, industrial, residential, and smart grid. By preparing the solution materials so they can be easily customizable, partners can focus on finding and closing new business instead of figuring out ways to market their services. “The solution materials are carefully designed with compelling and relevant content.” Janocsko continued, “The distributors would have to work really hard and spend a lot of money to create their own materials of the same high quality.” This benefit alone helps their partners to impress new clients.

In addition to the solution marketing materials, Eaton has created an impressive virtual city and home so that distributors and their clients can learn for themselves how Eaton’s must-have products fit into the overall construction scheme. “The virtual house and Eaton City are beautifully designed, and easy to access and explore online,” says Janocsko. “These virtual experiences help the contractors convey to their prospective clients how important their work is to the overall construction project. By establishing themselves as the best expert in their field, this impression helps them to win new business.”

Advice For Newbies

We asked Tamie, “What advice would you offer someone who finds themselves working for a company with commoditized products and at risk for little or no growth?” She offered the following suggestions:

  1. Get to know the market. Ask yourself, what are the trends in the market and how do your commodities fit in with the trend? For example, optimizing energy and energy conservation are key drivers in the market right now and Eaton has answers as to how their products tie into energy conservation solutions.
  2. Get to know your channel partners. Find out why they like working with you. Ask what problems they are facing and what they need to be successful.
  3. Write the strategy based on the information collected in items 1 and 2. Find out what important initiatives your partners are taking and ask yourself, do they address what the market is demanding? And then create the market strategy and programs that help tie your partners’ initiatives to what the market is demanding.
  4. There will be prospective partners whose business initiatives are not compatible with your market strategy. That’s OK. Not every prospective partner will be a good fit. Being selective has its benefits and the partners lucky enough to participate will appreciate the exceptional experience your program has to offer.

Conclusion

Marketing commodities isn’t as scary as most people make it out to be. In fact, businesses like Eaton Electrical that see opportunities when others see limitations are successful and resilient. This year, Eaton celebrates 100 years of providing the world power management solutions. This is a testament to their ability to find creative and impactful ways to differentiate themselves so their business continues to grow. And with prospective partners competing to take part in Eaton’s program, these lessons are not only wise but ripe for the taking.

 

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2 Comments on "Marketing Commodities, Now That’s An Oxymoron"

  1. commodities market 
    29/12/2011 at 5:43 am Permalink

    This is nice post which I was waiting for such an article and I have gained some useful information from this site. Thanks for sharing this information.

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  1. [...] Джонсон (Anna Jonson) в статье «Marketing Commodities, That’s is an Oxymotron» утверждает, что главное – глубоко понимать рынок и ...

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