Looking forward to your response.

In terms of what commodity is, i’d like to take a stab out a more simple definition as opposed to a narrowed one.
Commodity is to me, more or less, an item with various competitors competing almost solely on the basis of price with slight variations otherwise.
Eg: Burger King vs. McDonalds.

Luxury is a good or service often, but always, given a higher price and that is more often than not consumed for the reason of image or personal reward (I deserve this luxury).

With this, boutique is about identity. The connection of who you are to what you consume. The non-verbal conversation of your identity.

@bigsandford: From your pdf, I’d say i’m a little confused.

Identification – Consumption is essentially product identity.
Identification – Production I am not exactly sure what you’re getting at.

Customization – Production is basically have a product tailored according to ones specifications or identity?
Customization – Consumption is a special order (in the sense of say, a usual at the deli, or a coffee at coffee shop)?

An addition until I get your response (and while I continue to consider boutique) is a quote that pertains to commodity in terms of second-order identity (well described between first and second order, btw).
” Like everyone else, I had become a slave to the IKEA nesting instinct. If I saw something like clever coffee table in the shape of a yin and yang, I had to have it. I would flip through catalogs and wonder, “What kind of dining set defines me as a person?” ” – Fightclub

I think the last line of that is perhaps the fundamental element of boutique.

@ Tara – Grey areas should be avoided in my opinion. Yes some commodities can have boutique incarnations, but I sense that boutique items do not necessarilly have commodity incarations. I think the point about commodities is that higher price leads to lost sales whereas in the other categories higher price will not dissuade purchase (for different reasons).

With regard to the discussion of quality, as I indicated in the pdf, I don’t think commodity is necessarily low quality. Some of what Ikea produces is the example I used there. An additional example might be paper.* I’m sure most people would consider paper to be a commodity by almost any standard, and one can certainly purchase mass-produced, non-customized, non-participatory, BUT very high-quality papers. Forget paper for writing or printing, maybe toilet paper hits closer to home! Gas-station single ply and wash-cloth-thick Charmin Ultra both seem like commodities to me, but with significant quality differences (environmental concerns aside).

*Let’s set aside any envir

But perhaps I should have a couple of ‘grey areas’.

Another quibble would come with the quality element of your commodity category – I think it’s dangerous to assume that the assumption of good quality in niche and luxury products implies lower quality in more mass-produced categories.

Not only does the assumption of luxury=quality not always hold (as the skincream comment above illustrates), but the mass production=markedly lower quality is I feel also questionable. The standard economic definition of a commodity recognises this and I think it’s possible to argue that in an advanced economy that there are mass-produced goods of high quality and specification which can only make a step-change in functionality or design via an increased cost.

Thus these commodity goods compete almost exclusively on price but I’m not convinced that they have to be low quality, inexpensive (except within their product category) or lacking detail. It’s all relative.

I say that ‘quality varies’, but that doesn’t mean that luxury brands are all questionnable quality. Some, perhaps Hermes (I don’t know, I can’t afford to even step into a store), are incredibly high quality, with great attention to detail. Others aren’t that great, but they are still symbols of status.

My best friend used to buy this $450 face cream at Holt Renfrew. A half a year later, she visited her Dermatologist, who told her that cream was doing terrible things to her skin and that it was full of bad chemicals (not the ‘all natural ingredients’ they promised). Her dermatologist gave her a sample of cream that helped her clear up instantly…turns out you could buy it from natural food stores for about $15 a jar.

Yes, I admit that I’m biased about luxury brands. I personally think they are a waste of money. I like nice, high quality stuff, and, though many luxury brands are, not all are.

And, yes, the definition of a luxury brand (according to Trading Up) is the price point.

You don’t have to like Hermes, for example, but you can’t question the quality. I think the differentiator of luxury is the antithesis of some of the points made there.

Boutique would land more in the space of a niche provider that understands how to provide one service (only Birkin and no others might be an example) for an astonishingly low price, yet achieve 90% of the quality.

To me, boutique is all abut focus on certain core elements and doing those really well. (Moleskine, W Hotels, Audi cars etc.)

Just some thoughts ….

Colin