Yesterday I wrote about the huge challenge in consumer electronics that other industries do not face: your market — consumers — views your products as commodities. They see your products as interchangeable. They don’t see a difference between a Samsung HDTV and an LG HDTV, so long as they’re both 1080p 55-inch LCDs. Same with phones, digital cameras, computers, and lately, cable and satellite systems.

Some may define this position as business hell: the only way to differentiate is price.

So today, I want to look at why it has come to this. Here are five reasons consumers have come to view your devices as commodities:

1. Intense competition has created a narrowing of technical specifications across manufacturers.
2. Manufacturers flood the market with new products constantly — new SKUs mean new revenue, but these products are almost always only incremental improvements over the previous version.
3. In many categories an innovation ceiling has been reached: For example, how much more innovation is left in a desktop computer? Or, frankly, in a smart phone? (I expect push back on the smart phone side, but think it through with me: Can screens become significantly larger on a phone? Storage will increase, but that’s incremental. Keyboard / no keyboard. Photo camera / video camera. Good to great operating software. What’s left. I believe we’ve already seen 70 percent of the innovation that’s to be done in smart phones. The dramatic developments are behind us. Incremental improvements remain.)
4. Your marketing is all the same. That is, not good. Excellent marketing creates a view of your products in the market as special (think RIM), or, if you hit a grand slam (think Apple), as singular.
5. Your messages, language and platforms are uninspiring. You don’t tell consumer stories. You focus on the technical aspects of your products.

This is a marketing problem. That consumers see most products in our industry as nearly identical to competing products is a result of poor positioning, branding and messaging.

Now that you know the problem, start reading through the “defining posts” on the right. That’ll help start your marketing improvement immediately.

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