The term ‘commodities’ is often seen on business news space on news channels or newspapers. What is the exact meaning of commodities? Commodities market is that market where products / brands can’t be differentiated from each other. Grains and oil are classic examples of commodity products.
Commodity products have two traits – these are mass produced and don’t require specialized after sales service. How many times had you got back to your grocery store and had customer support?
Consumer behavior in case of commodity products is different from that in non-commodity product. If you own a small business dealing with commodity products, not many principles of branding or marketing may apply as in case of packaged FMCG. Your volumes are likely to be high corresponding to low profit margins. This doesn’t allow the business owner to think of promotion on a large scale.