Commoditization occurs when brands fail to deliver or satisfy customers needs and expectations. Commodities are products and services that customers perceive to be exactly the same, with no differentiation and hence, interchangeable with those of other companies. So the buying decisions are mainly driven by the price. A market becomes a commodity market if the suppliers are unable to differentiate themselves, either through their F or through their brands. A commodity market is characterized by declining prices, profit margins, increasing competition, and lowered barriers to entry. market becomes a brand-driven market if the suppliers choose to differentiate themselves. Even in case of commodities, marketing success depends on creating true value for money for those customers who are willing to pay for it, by designing a brand strategy based on product, delivery or service differentiation.

But with the current trend of global competition across all product and service categories, the pull towards commoditization is now an elemental force in marketing. Commoditization occurs as an industry matures and becomes dominated by a few large players who sell similar products and services and compete mostly on price. Moreover, the plethora of new brands introduced in the market over the past two decades as a result of micro-segmentation, has obscured brand identity and confused customers, especially when augmentation of services have flourished to attract wider audience. Commoditization often occurs as a result of brands failing to deliver or satisfy consumer needs and expectations. For a while, companies compete on the differentiation of services and augmentation thereof, but over a period of time, these are quickly and easily copied. This leads to one company's products and services becoming indistinguishable from those of a competing company.