Wednesday, September 05, 2007

Commodification Vs Commoditisation

I was asked recently why I talk about commoditisation (~ization, American English) when the "real" word is commodification.

Well, I happen to find the distinction useful and both words are still relatively new (created in my lifetime unless I'm mistaken) and both have some traction. That said commodification definitely seems to be winning the race and becoming the catch-all word.

Commodification (mid to late 1970s?) is used to describe the process by which something which does not have an economic value is assigned a value and hence how market values can replace other social values. It describes a modification of relationships, formerly untainted by commerce, into commercial relationships.

Commoditisation (early to mid 1990s?) is the process by which goods that have economic value and are distinguishable in terms of attributes (uniqueness or brand) end up becoming simple commodities in the eyes of the market or consumers. It is the movement of a market from differentiated to undifferentiated price competition, from monopolistic to perfect competition.

The processes are very different, I happen to agree with Douglas Rushkoff on this one.
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