Our blogger Ms Crissy Jones shares insights about developing intuitive strategies for marketing commodities. Interested? Read on!
Developing intuitive strategies for marketing commodities remains a daunting feat that poses a significant challenge to many modern businesses and distributors. Currently, there are 50 major commodity markets worldwide, which facilitate trade for approximately 100 primary commodities. Whether between hard commodities, such as gold or oil, and soft commodities, like coffee or sugar, understanding how to guide the perceptions of consumers and investors is pivotal to the sustained success and performance of a commodity. Similar to marketing brand image, perspective plays a key role in gaining a consumer’s trust and commitment towards investing in the circulation of a commodity.
While commodities typically precede products in regards to supply chain, or when presented to consumers, it’s still beneficial to be transparent of a commodity’s properties and usefulness to interested buyers. By advertising a commodity in a way that’s relevant to its field of application, and to an appropriate audience, confusion which may deter potential interest for a commodity will be less likely to occur. It’s also of importance to recognise the interest and needs of stakeholders or hedgers who have influence over the investment power of distributors and developers. Developers depend on the financial backing of investors to utilize the productive potential of a commodity. Focussing to satisfy the perception of all parties involved with the process of production can strengthen the overall performance and appeal of a commodity.
Traditionally, commodities are identified as a raw materials that are integral to the production of derivative consumer products and technologies. However, there are exceptions to this classification. Diamonds, while a raw material, exist within a niche realm of the commodity market for their variety in harvesting and presentation. Diamonds can be cut and customized to the needs of both distributors and consumers, since they’re primarily refined for the use of jewellry. Diamond's value as a commodity is dependent on its personalised value; its worth is correlated to an individual’s unique preferences and how they believe the commodity conforms to their own character. Other soft commodities which have a fluid market value also rely on personalised marketability, so they can appeal to a broad range of potential consumers or investors.
Understanding Customer Perception
Distinguishing what a customer wants from a commodity is important, but also understanding their perception of risk when purchasing can give insight to how consumer behavior can impact the desirability of a commodity. The potential for frequent variation or volatility in a commodity can generate a concern for risk among buyers; such variables include product specifications, supply, or demand. By taking into account possible negative risk-associated outcomes, and any estimated loss that the consumer could incur, consumers can be informed of whether a commodity has a volatile nature. This consideration and transparency minimizes uncertainty with the consumer.
The commodity market, while occupied predominantly by investors wary of risk and profit, operates to a similar extent as a conventional consumer market. Understanding the needs of targeted buyers, as well as the influence variable factors of a commodity may experience in the market, focuses the marketing of a commodity towards establishing an honest portrayal of the commodity's performance and relevance to consumers.