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Implementing Value Pricing: A Radical Business Model for Professional Firms by Ronald J. Baker

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CHAPTER 12

There Is No Such Thing as a Commodity

There is no such thing as a commodity. All goods and services are differentiable.

—Theodore Levitt

During the days of Prohibition, 25 of Chicago’s top bootleggers were rounded up in a surprise raid. During their arraignment, the judge asked the usual questions, including the occupation of each suspect. The first 24 were all engaged in the same activity. Each claimed they were a lawyer. “And who are you?” the judge asked the last prisoner. “Your honor, I’m a bootlegger,” he said. Surprised, the judge laughed and asked, “How’s business?” “It would be a lot better,” he answered, “if there weren’t so many lawyers around.”

G. K. Chesterton once wrote, “Competition is a furious plagiarism.” Yet the fact of the matter is there is no such thing as a commodity. Anything can be differentiated, which is precisely the marketer’s job. Believing your firm—and the services it offers—is a commodity is a self-fulfilling prophecy. If you think you are a commodity, so will your customers. How could they believe otherwise? This notion of selling a commodity is one of the most pernicious beliefs, which leads to price wars, incessant copying of competitor’s offerings, and lack of innovation, creativity, and dynamism, not to mention suboptimal pricing strategies. Consider this story from the Tom Peters Seminar:

Transformation. Breaking the mold. Anything—ANYTHING—can be made special. Author Harvey Mackay tells about a cab ride from Manhattan out to La ...

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