The process of identifying your competitors, learning about their marketing plans, and analyzing what they do effectively is known as competitive market analysis (and not so well).
You can learn a lot about your company's strengths and limitations from this approach, as well as how to stay a fierce competitor in your market.
The strategies of your rivals can be thoroughly examined to learn about their product lines, goals, target audiences, and other information. You can even discover brand-new rivals you were unaware of.
The greats teach the greats new things. Although you are striving to outdo your rivals, it doesn't mean you can't learn from them, especially if they have experience in the field. Observing what works for your rivals will help you identify gaps in both your own and their strategies—and, ideally, provide you with some ideas on how to close those gaps.
Competitive market analysis involves more than just knowing which competitors there are. Additionally, it can reveal the general trend of the industry. For instance, Blockbuster failed to adapt to the market, and we all know how that turned out. Using competitive analysis, you can prevent that from happening.
Six Steps to Doing a Competitive Market Analysis
Making sure you have a USP is simply one aspect of conducting a competitive market study. Here's how to analyze the competition, assess your position, and devise a strategy for standing out.
1. List Your Competitors
Make a complete list of every person working in your sector to start. Write down everybody who provides comparable goods or services so that you can eliminate the less important competitors later.
Your rivals are close by if you own a small local firm; you probably know a lot about them, but at the absolute least, you are aware that they exist. But it's crucial to identify your rivals for something like an internet store or service if you want to succeed.
Do some basic keyword research first. If you want to emphasize the commercial character of your search, Google your product category a few different ways, perhaps including words like "price," "cheap," or "sale."
This will assist you in locating any rivals and may provide insight into the level of industry saturation.
Next, classify the businesses you've identified into direct and indirect rivals.
Direct competitors offer comparable goods or services to a target clientele that is similar to your own. For instance, Gucci and Prada both provide high-end apparel and accessories to consumers with high disposable income who are fashion-conscious.
Indirect competitors serve a target market similar to yours by offering distinct goods or services (even though they fall under the same category as yours). For instance, producers of at-home exercise equipment and gyms can be viewed as indirect competitors.
Direct competitors, as the name implies, usually provide a more immediate risk to your company. Nevertheless, you still risk losing consumers and revenue to your indirect rivals. For a complete understanding of your competitive environment, you must identify and assess both.
2. Determine Their Intended Market
Sometimes, especially if a competitor is a niche brand, the target demographic is obvious. Consider Dick's Sporting Goods; it is very clear that they cater to sports enthusiasts (or who want to be).
Other businesses may not see it as clearly. Try the following to establish the target markets of your rivals:
In some cases, a company's mission statement will specifically identify the target market for its goods and/or services. Additionally, even if it isn't explicit, it almost always gives a hint. Visit their website's "About" page and take in as much information as you can.
Examine their tone and voice
Defiant or sly? Written for beginners or dense with jargon? The objective of the language and tone used by your competitors is to persuade their intended audience. Read company blogs, sign up for emails, and watch marketing videos while paying close attention to the audience they seem to be targeting.
Pay attention to their activity on social media
Consider who comments on their content and how they address those remarks. The influencers they collaborate with might provide further insight into the target market.
3. Describe Their 4 P's
When conducting a competitive market study, you must examine the four Ps of marketing used by your rivals: product, price, place, and promotion.
Being a customer yourself is the best method to learn about the customer experiences of your rivals. You'll discover some amazing insights into what works for them and, more importantly, where you may improve.
Give your competitors' items a try whenever you can. Obtain a free trial, or if your budget permits, purchase or register for the full version. Try calling their customer service when using their items for further information.
One of the most delicate components of marketing can be pricing. Because of this, you must be aware of and keep tabs on what your competitors are charging. Here are some queries to ponder regarding each rival:
What is their pricing strategy? One-time purchase, subscription-style, or a combination of both?
Does their pricing strategy appear to be in line with that of the rest of the sector?
There are numerous tools available to assist, as well as specialized solutions for particular industries.
Here are your choices if you get a handle on your competitors' pricing tactics:
Lower your price range
If your industry's primary point of differentiation is pricing (i.e., your product, location, and promotion tactics are all rather uniform), you might think about cutting your rates to capture a larger portion of the market. But be mindful of how this may affect customers' impressions of your quality as well as the possibility of a price war that would push everyone's pricing too low to be profitable.
Increase your costs
You might think about boosting your prices if your company already dominates the industry by offering something special or better products than the competitors. Before implementing this method, consider your product's price elasticity. In some markets, a modest price rise can result in a loss of customers.
Match the pricing of your rivals
Selling goods at the same price as rivals is significantly harder to do. If your company has been around for a while and can provide a specific or niche offering, this tactic will succeed. In this scenario, the consumer will select the product based more on personal preferences than on cost.
Where do your rivals sell their products? Is everything available online, or are there physical stores as well?
Every business has its tendencies here; shoe companies, for instance, frequently have physical stores because most consumers prefer to try on shoes before purchasing them. However, furniture stores aren't always restricted to physical locations. They can offer clients a "good enough" impression of what they're buying by offering images, videos, and product specifications (such as measurements and materials).
Although promotion includes more than just advertising, it is the most easily monitored because it is so measurable and widely available. Analyze the tactics of your rivals to prevent wasting your advertising spend.
What you seek is as follows:
Cost per click: If the CPC is excessive, you might not want to employ paid advertisements at all as a channel for promotion. Instead of learning from your own experience, it is preferable to learn this from your rivals.
Keywords: Check the amount of competition for each term used in the ad campaigns of your rivals. This will assist you in discovering the top-performing, low-competition keywords (and that means lower cost per click). Additionally, you'll be able to identify poorly performing keywords and steer clear of them.
Ads that have been running for a while: If your rival has been using the same campaign for a while, it has undoubtedly been successful for them. To duplicate their accomplishment, you can attempt to produce something similar.
You should undoubtedly copy your competition if they use social media commercials more frequently than TV or print ads. Similarly, if they are spending all of their advertising budgets touting how crispy their chicken sandwich is, it is most likely because people who eat chicken sandwiches enjoy their chicken crispy. Consider how your competitors distribute their advertising budgets as you develop your approach.
4. Learn About Their SEO Approach
There is no foolproof technique to properly analyze your competitors' SEO approach because SEO is a beast. However, there are a few approaches to at least ascertain what is effective for them.
See what keywords your rivals are ranking for by using a keyword research tool. Do they only ask questions about the industry, or do they also ask questions about unrelated subjects? What pages are receiving the most visitors?
You gain insight into what's working for your competition by finding out which keywords they target (and rank for), as well as fresh keywords you may have overlooked. Even better, you may discover phrases that they aren't focusing on and discover the underserved clients. Additionally, you can take advantage of the opportunity to individualize your message to rank for more precise keywords.
Observe what draws readers to some of your competitors' high-ranking pages while you conduct your research to get a head start (and Google). Although data is important, nothing can fully replace the human eye.
5. Take Note of Their Most Well-Liked Articles
Your content strategy can be influenced if you can determine which media—such as blog posts, videos, podcasts, guides, etc.—is most favored by the audiences of your competitors.
Finding the content kinds that receive the greatest traffic or engagement is the aim. A marketing analytics tool can be used to examine both of those things:
Do the best-performing content pieces typically just come in one type of format (video, infographic, written piece, or something else)?
Do all of the most popular articles' titles contain numbers or other distinct characters (such as brackets or hyphens)?
Is the most popular content all centered around the same subject?
Social media offers a chance to showcase the personality and voice of your brand. Take Wendy's as an illustration. On Twitter, the company publicly skewers its rivals, and the internet adores it.
6. Complete The SWOT Analysis
A SWOT analysis is a great tool for identifying chances to seize and risks to anticipate. In essence:
The words "strengths" and "weaknesses" refer to your company's internal aspects.
Threats (T) and opportunities (O) focus on factors beyond the market and industry.
To be clear, this won't highlight the precise course of action you should do to outperform your rivals. It can give you a broad overview of your internal and external environments, which makes it simpler to put your competitive plan together.
You consider how to convey your advantages when promoting your brand. When you conduct a SWOT analysis, you are compelled to examine your brand carefully as well. Even if you strive to be "the greatest" at everything, there will always be something that other businesses excel at.
Your marketing skills will improve if you are aware of the advantages and disadvantages of your rivals. You cannot defeat your opponents if you are unaware of their strength. Utilizing competition analysis will strengthen your marketing plan and help you reach your target market more quickly.
Competitive analysis needs to result in action, therefore you should follow it up with specific company objectives and a solid business plan. The templates listed below can be used to implement your strategy after you've completed your competitive analysis.
Through our thorough market research, our team of experts can help your company succeed. Contact KLB Solutions LLC today to avoid missing out.
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