Generic cables are commodities--yet audio and video cables from Monster fetch a premium price. Why? They're made with better wires and they come with a lifetime warranty.
Alas, they have a terrible website. Just try to find information about the quality of their products and their warranties. Yet musicians who care about sound opt for the better product. More at http://www.monstercable.com/default.asp
Flour is a commodity--yet my father prefers to bake bread with Robin Hood flour, available only in Canada. It makes the best bread! The last time I drove to Toronto, he asked me to buy him some. I said, "You want me to smuggle 10 kilos of white powder across the border!!"
Gad, but their website!
Hood's baking professionals responded by providing high-quality convenience foods. During this time of intense economic competition, Robin Hood renewed its focus on quality, service and building trusted partnerships with customers and suppliers.
If you have a me-too product, you'll have to offer me-too pricing. But why not charge a premium? What do you do that is special in your competitive marketplace? And who values that special thing?
Instead of building a product that is just the same as everyone else's, build one with capabilities or attributes that matter to a market segment. And charge 'em a premium.