The prevailing wisdom in business is that once your product reaches a low price point and very little differentiation in value between brands, (the product is commoditized) you should no longer work hard at selling it and look for another new market that is not yet saturated.
The old fashioned way of doing business was to develop a good reputation in your chosen business and then your customers would come to you, even if the product was just the same down the street. They knew and trusted your business, and might even be willing to pay a premium for that trust and familiarity.
Today, with internet sales and bevies of competing outlets, finding the sweet spot in pricing is more important than ever.
I was thinking about how in the coffee franchises business Starbucks actually reversed the commoditization process and turned coffee from a .99 cents commodity to a gourmet item with a brand name and premium price. Pretty clever.
