One of the most important parts of any marketing needs assessment is a competitive analysis. Typically occurring in the early stages of a marketing campaign’s development, a competitive analysis is what will help your marketing plan begin to take shape and it’s a crucial step in the process that can give your marketing both direction and purpose. That’s because a truly good and thorough competitive analysis means more than just compiling a list of your business’s competitors – it means analyzing all of your competitors and their respective market shares, growth potential, marketing strategies and target market, among other things.
Depending on what kind of product or service your business provides and what kind of market you’re in, your list of competitors may be only a few names long – or you may need one of those scrolls from the renaissance era to fit everyone. But regardless of how many competitors your business has, the main goal of your competitive analysis will remain the same: to determine the benefits and features of your product that distinguish you from your competition. Then, once you’ve isolated these key traits, you’ll be better equipped to highlight them with your marketing campaign.
Before you begin any competitive analysis, there are a few things you’ll need to do:
- Define your industry. Knowing your industry is the first step to being able to accurately assess your competition. What industry are you in? Is there any overlap with other industries? Answering these questions will give you a better idea of what industry you should focus your efforts on and who your competition truly is.
- Know who your customers are. This one should be easy to answer because, after all, your customers are the bread and butter of your business. You’ll need to establish what your customer base is, what demographics you are targeting and who your main competition is within each of these demographics.
- Determine who your competitors are. Before you begin analyzing your competition and really doing your due diligence, you’ll need to determine exactly who your direct competition is. Since this may not always be easily defined, especially in industries that are flooded with similar businesses, it’s important for you to figure out which competitors share similar customer bases and target the same demographics.
There are a few goals to keep in mind when carrying out a competitive analysis. Mainly, your goal is to determine which factors are the difference maker for your business. Figure out what your product has that other, similar, products don’t and use these differences to drive your marketing campaigns and highlight your product’s superiority. But there are a few other ways you can benefit from a competitive analysis.
Besides highlighting your company’s main differentiators, a competitive analysis is a good way to learn from other businesses around you. For example, you can see what kind of mistakes your competition has made and how to avoid them. Adversely, you can also see what is working for your competitors and perhaps learn something from them that you can use to improve your business.
Another thing to keep in mind is pricing and how your product or service is priced. A competitive analysis is the perfect way to see how all of your competitors price their goods and services and you can use this information as a guideline for how you should set your pricing. If your pricing is too high, you could very easily be losing potential customers to your competition, while if it’s too low you run the risk of losing out on potential profit and undervaluing your product.
Conducting a competitive analysis will also allow you to really examine your competitors and see how your product stacks up to theirs. Examine each competitor’s website, product offerings, customer service, marketing collateral, and just their overall brand. What are you doing differently? What are you doing that’s the same? And what can you do to improve your business, which your competitors aren’t? Remember, the ultimate goal here is to stand out: to set yourself apart from your competition in a way that allows you to capitalize on your share of the market.
If done correctly and with enough time and effort, a competitive analysis can be very helpful for your business and your overall marketing efforts, and you’ll likely find new ideas for your business while also keeping tabs on your competition.
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