Strangely enough, this little usage dilemma hasn’t been written about in any reference book or website I can find. And my copyeditors at HarperCollins want me to use the word “commodified” exclusively, since it’s the only one in Websters. But I see the words as very different, and have issued a big STET on that one.
And so I am hereby declaring the proper way for these two words to be used, based on the way I’ve been hearing them, as well as seeing them used in magazines and books:
“Commodification” is a somewhat Marxist idea, referring to the way that market values can replace other social values, or the way a market can replace a communal system. “Our parties become commodified as Tupperware moves in to turn them into buying opportunities.” or “The techniques for proper breast feeding used to be passed down from mother to daughter, but now there is a market for lactation consultants. As a result, one of the most intimate human functions has become commodified.”
“Commoditization” is a newer and undocumented word (except in WIKI) referring specifically to the way that goods that used to be distinguishable in terms of attributes end up becoming mere commodities in the eyes of the market or consumers. “The collapse of Marlboro’s brand value in the early 1990’s convinced cigarette manufacturers that their products had become commoditized.” or “Unless Intel comes up with a new kind of computer memory chip, Japanese equivalents will commoditize RAM.” The problem with commoditization is that the only thing that left to distinguish one brand from another is price, so margins shrink.
Commodification is more of a crime of the market against humanity, while commoditization is more of a market problem for the manufacturers of branded goods.