Pay close attention to the trends going on in your industry and with your customers. Based on current trends happening, what future trends can you identify? If you can accurately pinpoint where your industry or customers will be in the next few months or years (or what your customers will want), you can de-commoditize your offering and get that business.

For example, the product 7Up was a commodity for many years. 7Up and the other products like it are basically bubbly, clear sugar water. For many years, 7Up was dealing with shrinking margins and lower sales. People were drinking less soda and more water and other non-carbonated drinks. Recognizing the trend for customer to want healthier drink options, 7Up de-commoditized their soda by taking out all the artificial flavorings and ingredients and making their product natural. After they launched their new “natural” campaign, sales of 7Up increased.

But, as is the nature of commoditization, over time competitors will start copying what 7Up did and the soda will become a commodity again. So instead of riding it back down again to decreasing sales and low margins, 7Up can take the next step and make all their natural ingredients organic. But rather than do what other companies do with the organic label, which is to stretch the definition, 7Up can raise the bar and do organic the way it should be done. Now they’re de-commoditizing again. And as trends with their customers continue to change, so too should the soda.

Tags: 7Up, Anticipate, Burrus, Business Strategy, Commoditization, Current Trends, Dan Burrus, Daniel Burrus, de-commoditize, Future, Future Trends, Knowledge, opportunity management, problem solving

Posting on April 6th, 2010 under Anticipating the future, Competitive Advantage, Marketing, Solving Problems. You can leave a response, or trackback from your own site.