Join Drew Boyd for an in-depth discussion in this video Researching the competition, part of Marketing Foundations.
Marketing would be relatively easy, if it were not for the fact that you always face some type of competition. A competitor is anything that wants the same thing that you do. It can be an individual, a company, or even a completely unrelated activity that distracts your potential customers away from you. You need to understand your competition for a lot of reasons. First, you need to know which ones to focus on, and which ones to avoid.
You want to stay away from a competitor if they are much stronger than you. If you take customers away from a stronger competitor, you may trigger a reaction from them that you aren't prepared to handle. The intensity of competition will affect the overall potential for success of your business. This is why it's important to consider all types of competition when planning your business, to ensure that you have the edge over others in your industry. You need to compare your strengths and weaknesses to theirs to see how you match up.
This will help you select the right strategy to win. Competitors come in three different types. Direct, indirect, and what are called substitutes. A direct competitor is anyone who is selling the same things you are, and delivering the same benefit. An indirect competitor sells similar products, with different benefits. A substitute is any unrelated product or service, that a consumer can use in place of your products or services.
Let's look at the wallet industry. A maker of slim wallets competes directly with any wallet maker that also emphasizes the slim features of its products. Indirect competitors are makers of other wallets or other money-storing products with different benefits. And substitutes would include a plain old pocket to keep your stuff in. A good way to analyze the competition is with a tool called a competitive matrix, like the one you see here.
To create a matrix, list your company and your competitors across the top. Down the side, list the things that you want to compare. Things like size, market share, strengths and weaknesses, and especially the key strategy elements, like the value propositions. What does each company have in terms of key resources, and how do they use those resources to acquire and retain customers? A competitive matrix will vary a lot depending on the industry.
If you're in a high tech industry, you'll want to compare R&D activities, like spending, number of engineers, or number of new products launched. In service industries, be sure to compare things like how each company delivers the service. How they train their employees. Or, how they're rated for their service. Every industry has certain key factors that every competitor has to pay attention to. So, it's likely those factors will be the ones you want to compare. A word of caution. When you collect competitive information, use only information that is publicly available.
Never try to get inside information about your competitor that they would consider confidential. When you complete the matrix, take a close look at it and find some insights that you'll need later when deciding on your strategy. What conclusions can you draw from the matrix? By considering all the possible ways your customer's needs can be satisfied, and creating a strategy for handling the competition, you'll create powerful advantages in the marketplace.
You'll also learn to address tactical challenges and present the plan to get buy-in throughout an organization, from the C-suite to the sales team, as well as use the marketing plan to guide outside agencies and vendors. Finally, you'll learn how to launch the campaign and measure its performance.
- Marketing in an organization
- Assembling the team
- Creating the marketing plan
- Analyzing your products, customers, and market
- Segmenting customers
- Creating a value proposition
- Developing a strategy
- Setting goals
- Setting prices
- Using social media
- Presenting your plan to leadership
- Budgeting your plan
- Measuring success