February 24, 2024

Commoditization refers to the process of making something into a commodity. More broadly, commodification is taking something that previously was not available in the market and making it so, for instance the commoditization of the food chain has brought many more foods to the market, but has left small producers behind in favor large, low-cost producers.Commoditization moreover often removes the individual, unique characteristics, and brand identity of the product so that it becomes interchangeable with other products of the same type. Making commodities interchangeable allows competition with a basis of price only and not on different characteristics.When a financial contract such as a mortgage becomes commoditized, the contract becomes more liquid because it can be bought and sold readily. This liquidity promotes trading in that market because the agreements do not have to be assessed individually and treated uniquely. Introduction Commoditization means the process of making something into a commodity. It refers to a good or service becoming indistinguishable from similar products. Any item should satisfy the following three conditions to consider is as a commodity: It must be standardized, for agricultural and industrial commodities, in a “”raw”” state It must be usable upon delivery Its price must vary to justify creating a market Most of the people think that commoditization applies to agricultural products and other raw materials only, but commoditization can be applied to financial instruments. For example, when issuing loans in the past, the terms and conditions of every loan were specialized as per the borrower and his property. But over time, the government authorities commoditized mortgages by offering to buy almost any mortgage that met a set of conforming standards. These agencies encourage banks to streamline and standardize the types of mortgages they offer to consumers. When the terms of the bond or loan do not vary in a financial contract, it will undergo commoditization, Imagine an example of a mortgage, where the loan can be unique to the borrower, but a commodity to an investor who buys mortgages as investments. Once commoditization happens, the company’s ability to command premium prices for its products disappears, and commodity-based pricing usually leads to much lower profit margins. It’s important to know what is a good commoditization so that the investor can recognize when it happens to a company in which he invested. Commoditization makes an asset easier to trade. It also encourages a more liquid market. Sometimes this can add volatility to the price of the commoditized entity, but in other cases, it can promote economic activity. In the case of the mortgage industry, commoditization provides more cash from selling conforming mortgages to government agencies and government-sponsored entities. The banks can use the cash to issue more loans, theoretically encouraging economic growth. How to address commoditization Addressing commoditization can help generate more consumer interest in your products by differentiating them from other products of a similar class. Here are some ways to address commoditization: 1. Create a product niche-Narrowing your products into a more targeted niche within the market can help reduce commoditization and attract new buyers. Niches target specific groups, features or customer preferences. The more niche a product is, the more loyal its customer base can be, especially if there are few competitors within that niche. Consider creating a more specific niche to retain your product’s unique status in the industry. For example, if you sell bookkeeping software, you could market it as bookkeeping software specifically for small retail businesses. 2. Introduce a creative pricing structure- Creative pricing can be an effective way to make your products more unique because prices typically distinguish commoditized products from each other. A creative pricing structure often makes it more challenging for a consumer to compare your prices directly with the competition, potentially increasing the chances that they choose your product. Consider bundling different products and services for a more complex pricing structure or offer multiple services as a package. For example, instead of simply offering classes, you might offer a complete course for a fixed amount. 3. Customize your advertising to pain points-Marketing is a great tool that brands can use to combat commoditization because it helps shape the customer’s view of the products and brand. Creating more appealing advertising that focuses on direct customer pain points may help customers feel more confident that your product is the best choice among its competitors. For example, you might try focusing on how your bookkeeping software solves common financial problems for small retail businesses. Marketing directly to customer pain points can inspire action and create satisfaction for the customer. 4. Leverage the market- Markets and buyer trends often change with financial shifts, quality standards and product demands. If there are advantages your brand can leverage in the market, it’s important to identify them so you can make your products unique. Determine what advantages currently exist in your market, such as high demand for specific products or features. You can then create products or customize existing ones to include those features to give you leverage over competitors. For example, if there’s a high demand for inventory management features in bookkeeping software, you might add an inventory feature to your software to leverage the market. 5. Listen to feedback- Consider listening to customer feedback about your products, services, pricing and features. Customer feedback can help a business grow and learn what customers find unique in its products or services. If you notice a pattern, you can address that pattern to make your brand more unique. A brand that listens to its customers might earn a higher status in the market because of its dedication to customer service. Consider asking customers for feedback through email, post-purchase surveys or in-person or phone conversations. Commoditization Challenges Businesses Products that lack distinguishing features tend to eventually decline in price and cause dwindling profit margins. Therefore, companies strive to delay commoditization, as long as possible, in order to maintain the special status of their product offerings.One way in which a company can delay commoditization is by bundling its commoditized products or services with related offerings, to create attractive packaging that has a unique combination of offerings—even if the offerings

Omnichannel distribution is an approach to distribution that enables customers to buy and receive products from multiple sales channels that are seamlessly integrated. This means that a customer can make a purchase through one channel and even choose to receive it through another. Think a customer placing an order online and having it shipped to the store, where they can pick it up. What is omnichannel distribution? Omnichannel distribution is a strategy that moves goods through multiple online and offline channels to allow customers to receive their purchased products in the way that best suits their needs. For example, if a customer wants to buy something from a retailer that uses an omnichannel model, they could choose whether to go shopping in person, have the product delivered to their doorstep, or order it online and pick it up at the store.  With true omnichannel distribution, barriers between sales channels are non-existent. For example, when the inventories of ecommerce and brick-and-mortar stores are integrated, omnichannel distribution creates a seamless, convenient shopping experience and maximizes operational efficiency.  Two types of distribution Forward distribution system. Characterized by its sources (dispatching locations), destinations (points of reception) and associated links. When building it, you should take into consideration different types of sources and destinations in the physical structure, as well as possible delivery processes and modes. Backward distribution system. The mixture of the physical flow of return products, and the locations where products returned. It covers shipment between customers and stores. The 6 omnichannel distribution sales channels Products take many different journeys to arrive in a customer’s hands with an omnichannel supply chain.  Ship from store. Customers order online, and their purchases are shipped directly to them from the nearest store location.  Drop-shipping. Customers order online, and the company ships the product to them via a third-party vendor. Buy online, pick up in-store (BOPIS). Customers order online, then go to the brick-and-mortar to pick up their purchase.  Reserve online, pick up in-store (ROPIS). Customers reserve an item online. They then go to the store, decide if they want to buy the item, and complete the transaction using the store’s point of sale (POS) system.  Buy online, return in-store (BORIS). Customers buy something online but change their mind and return it to the store location. In-store purchase, home delivery. Customers purchase a product in the store and have it delivered to their homes. This is a popular choice when buying furniture or appliances. Why Omnichannel Distribution is important? Customers take it for granted that a distributor will provide them with a seamless experience and the ability to make purchases in any way they want. If you can’t give them such an experience they will get the product from your competitors. Consistent sales efforts across multiple channels increase brand awareness and allow the brand to reach new audiences. Customers become better acquainted with the product gaining the trust they need to buy it. It increases profit. omnichannel customers spend more money. Flexibility increases buying opportunities and provides a wider means to access and purchase the products. All data is analyzed centrally, so you don’t have to engage personnel for each distribution channel separately. Thus, revenues increase and costs may decrease when compared to a multichannel strategy. What is the difference between omnichannel and multichannel distribution? Multichannel distribution uses multiple sales channels, but they’re siloed, meaning that inventory cannot move between channels. This limits the options that customers have for buying and receiving goods. For example, let’s say that Harold orders a pair of shoes online from a multichannel retailer. He doesn’t have the option of picking the shoes up at the nearest store and instead has to wait a week for them to be delivered to his home. On the other hand, an omnichannel approach breaks down barriers between channels, allowing customers to switch effortlessly between them. Using the previous example, Harold orders a pair of shoes online and chooses to pick them up from the store to save on shipping costs and get the shoes in time for his daughter’s wedding. The added flexibility and convenience of an omnichannel approach encourages Harold to buy from the store again and again.  The biggest challenges of omnichannel distribution Inventory visibility. Since omnichannel distribution is so flexible, inventory can be stored in multiple locations—stores, warehouses, distribution centers, or any combination of the three. With multiple locations for inventory comes an urgent need to keep track of inventory levels, availability, and movement in real time. It’s crucial to maintain inventory visibility across locations to avoid overstocking or stockouts. While developing a strong inventory management system can be a challenge, it’s an essential element of omnichannel distribution and can be simplified with the right technology. Delivery speed. If it’s not done right, omnichannel distribution can result in orders getting delayed. When inventory is stored at multiple locations, businesses must perfectly coordinate and optimize inventory allocation, logistics, and transportation to deliver an omnichannel experience that actually works for customers. Failure to do so has hefty consequences: when omnichannel delivery takes too long, nearly half of consumers will shop somewhere else. How to implement omnichannel distribution Get an inventory management system. A defining characteristic of omnichannel distribution is integrated inventory. When inventory is shared across channels, efficiency soars because buyers can access the products closest to them, regardless of whether they’re picking up their purchases or having them delivered. But without a system for tracking inventory, you’re likely to either overstock or run out of goods. Because of this, it’s essential to invest in the right technology. An inventory management system will help you keep things under control.  Put the customers’ needs first. The first step in putting your customers’ needs first is to understand those needs. Successful omnichannel distribution models collect data throughout the customer journey to give you insight into how individuals interact with your business. Analyzing this data will help you understand your customer base, personalize each person’s buying experience, and identify pain points. You can also go straight to the source by paying attention to the feedback people leave via surveys and online reviews.

the Trade Unions Act, 1926 was enacted on March 25, 1926, in order to register and safeguard these worker groups. Consequently, the registration of the trade unions raised the status of the unions in the eyes of employers and the general public. Before we proceed with the registration of trade unions it is important to understand the history of the trade union movement in India.India saw the growth of industrialisation and capitalism during the initial years of the 20th Century. With the number of workers increasing with each passing day, it became important to safeguard and protect the rights of these workers and to formalize the groups thus formed. Therefore, for the registration and protection of these groups of workers, the Indian Trade Unions Act, 1926 (now known as Trade Unions Act, 1926) was enacted on March 25, 1926. Definition of “Trade Union” as per Legal Acts The Trade Unions Act, 1926 defines a trade union as any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen or between employers and employers or for imposing restrictive conditions on the conduct of any trade or business. A group of seven or more members of a trade union may apply for registration of a trade union with the concerned Registrar of trade unions. A registered trade union is a body corporate by the name under which it is registered, having perpetual succession and a common seal with the power to contract and to hold movable and immovable property. A trade union may sue or be sued in its name. The Industrial Disputes Act, 1947 defines “Trade Union” as a trade union registered under the Trade Unions Act, 1926. Therefore, any Trade Union, which is not registered under the Trade Unions Act, cannot be treated as a Trade Union under the Industrial Disputes Act, 1947. An unregistered trade union has no manner of right whatsoever and the rights available under the Industrial Disputes Act, 1947 have been limited only to those trade unions which are registered under the Trade Unions Act, 1926. Is it necessary to register a Trade Union? Though an unregistered trade union may function as a normal trade union defined under the Trade Unions Act, an unregistered trade union neither has the power to raise an industrial dispute, nor the power to represent an employee or be part of any proceedings under the Industrial Disputes Act. An unregistered trade union is also incapable of entering into a contract with the employer on behalf of the members or employees, and if it does so, the enforcement of the same by such an association or union in its name may not be possible.   Mode of Registration According to section 4 of the Trade Union Act, any seven or more members of a Trade Union in accordance with the provisions of the Act may make an application apply for registration of the trade union. There are two conditions subsequent to the same, firstly no trade union of workmen shall be registered unless at least 10% or 100 of the workmen, whichever is less engaged in the employment of the establishment are its members on the date of making of its application and secondly no trade union shall be registered unless on the date of making of application, minimum seven of its members who are workmen are employed in the establishment or industry. Also, such application shall not be deemed to be invalid merely on the ground that at any time after the date of the application, but before the registration of the trade union some of the members but not exceeding half of the total number of persons who made the application has ceased to be members. Application for registration According to section 5 of the Act, every application for the registration of the trade union shall be made to the Registrar and shall be accompanied by a copy of the rules of the Trade Union and a statement of the following particulars namely- The names, occupations and addresses of the members making the application; The name of the trade union and the address of its head office, and The titles, names, ages, addresses and occupations of the office- bearers of the trade union. Where a trade union has been into existence for more than a year, then a copy of the assets and liabilities shall also be submitted along with the application for registration. Provisions to be contained in the rules of a Trade Union According to section 6 of the Act, a Trade Union shall not be entitled to registration under the Act unless the executive committee has been established in accordance with the provisions of the Act and the rules provide for the following- The name of the trade union; The whole of the objects for which the trade union has been established; The whole of the purposes for which the general funds of the trade union shall be applicable; The maintenance of a list of the members of the trade union; The admission of ordinary members who shall be persons actually engaged or employed in an industry with which the trade union is connected; The conditions under which any member shall be entitled to any benefit assured by the rules and under which any fine or forfeiture may be imposed on the members; The manner in which the rules shall be amended, varied or rescinded; The manner in which the members of the executive and the other office bearers of the Trade Union shall be elected and removed; The safe custody of the funds of the trade union, an annual audit, in such manner, as may be prescribed, of the accounts thereof, and adequate facilities for the inspection of the account books by the office bearers and members of the trade union, and; The manner in which the trade union may be dissolved. Power to call for further particulars and to require alteration of name