To commoditize is to treat something like a commodity. When you commoditize, you take a set of similar products and treat them as indistinguishable. Imagine printer paper: you don’t care which brand you get; all that matters is getting the best price. Printer paper is a commoditized market. However, the laser printer market is not a commoditized market because the different brands and their respective features matter more to you.

Commoditization takes differentiated products and transforms them into a uniform commodity market.