What concept distinguishes commodity products from differentiated products?

Brand recognition is a key concept that distinguishes commodity products from differentiated products. Commodity products are largely standardized and interchangeable with one another, such as grains or raw materials, where their value comes prominently from their price. These products do not have significant branding, as they are viewed as uniform and driven by market demand and supply.

On the other hand, differentiated products are designed to stand out in some way. Companies develop brand recognition to create a perception of uniqueness, quality, or customer loyalty. This can be achieved through various marketing strategies that highlight specific attributes, benefits, or experiences associated with the product, which helps consumers develop a preference based on brand over mere price or functionality.

For example, consider how a brand like Apple differentiates its products through design, functionality, and customer service, making them recognizable and desirable beyond just their functional use. Therefore, brand recognition serves as a pivotal element in distinguishing differentiated products, as it enables them to command higher prices and foster customer loyalty compared to undifferentiated commodities.