ADDING VALUE TO CONCRETE
In last week’s post, I described how the production potential for ready-mixed concrete significantly outpaces market demand in the 53172 delivery area, took Wikipedia to task for its definition of “commodity,” and dismissed the notion of commoditization as inevitable as markets mature.
Ready-mixed concrete is a mature market, but concrete is anything but a commodity. An engineered construction material, concrete mixes can be optimized for consistent, predictable performance, while helping specifiers and contractors to improve project quality and productivity and reduce in-place concrete costs.
Wikipedia, the free, online encyclopedia defines commodity as
Something for which there is demand, but which is supplied without qualitative differentiation across a given market.
The definition is serviceable, but assumes purchase decision-making is a logical endeavor. While logic is involved in many purchasing decisions, emotion is involved in all purchasing decisions. Thus a better definition for commodity is:
Something for which there is demand, but which is supplied without qualitative or emotional differentiation across a given market.
Larry Steinmetz is one of the world's leading authorities on getting top dollar for products and services. A former professor of management at the Graduate School of Business at the University of Colorado, Dr. Steinmetz maintains there are no commodities. According to Larry, value can be embedded in any product or service in one of five ways:
- Quality
- Service
- Delivery expertise
- Pricing strategy (high/medium/or low)
- Marketing and sales savvy.
The 15 ready-mixed concrete companies regularly serving the 53172 delivery area are capable of providing quality concrete mixes to meet basic project performance requirements. But each company does so with varying degrees of consistency, service, and delivery expertise.
Successfully employing one or more of Dr. Steinmetz’s value added strategies could help these ready-mix companies (and their concrete contractor customers) avoid commoditization. Catch next week’s post to learn how.
To comment on this post, click HERE and include "Value" in the subject line.