Learn in the textbookCompetitive Economics and Market Concepts
DefinitionCommoditization (コモディティ化) is when differences in function and quality between products disappear and customers choose mainly on price.
ExplanationIn a market where technology has matured and spread widely, the performance of each company's products grows similar. Once the differences are no longer visible, customers pick the cheaper option, which easily sparks a price war. Companies try to stay distinct by adding value beyond function, such as brand strength or service.
AnalogySugar tastes the same whichever store you buy it from, so people tend to buy it where it is cheapest.
Memory hookCommodity originally meant goods like wheat or crude oil that are treated as identical wherever you buy them. Read the term as industrial products joining that group.