To beat the competition you must first understand them.
When a business positions its brand in the customer’s mind it is positioning that brand against other brands. It is critical to understand that we must consider the strengths, weaknesses, opportunities, and threats of each competitive organization along with the industry structure itself.
How can you understand your competition’s strengths and weaknesses?
A common technique to understanding the competition is to find out who you are competing with and how your differentiators set you apart from them. The best way to do this is through an analysis of your competitors’ strengths and weaknesses. Understanding where your competitors’ strengths and weaknesses lie and where your brand stands in comparison to them allows you to not only understand the industry but also how you should position your brand.
First, we must Identify our competitors
The first step to identifying a competitor is to decide what market space your product or service occupies. You may be competing with several products that offer a similar product or service. While you may also be competing with many products that occupy different market spaces.
It’s important to remember that when we compete in the customer’s mind, we compete against our competitors’ brands and not their actual products or services. Therefore, competitor analysis should focus on identifying how customers view each brand in the product category and where your brand stands in comparison.
Things to consider when doing a competitor analysis
- How would your customers define your market space?
- What is the size of your target market in terms of revenue and volume?
- Which competitors in the industry currently dominate the market and why?
- Are you taking business away from current leaders or adding to their growth?
Study your competitor’s product or service offerings.
The best technique is to study your competitor’s products or services. Are their offerings different than yours? How are the pricing services that you offer? Do the products and services offer similar functionality?
It’s important to understand that many companies can be considered competitors even if they don’t directly compete for the same customers. For example, a printer manufacturer competes with the makers of ink and toner cartridges. While their products and services don’t directly compete, they still represent competition in terms of what features and functionality customers care about most when purchasing
What is your competition’s pricing strategy?
When examining a competitor’s pricing it can be helpful to gather information on:
- list prices of their products or services, and
- discounts and rebates offered.
Conducting an in-depth analysis of your competitors’ pricing can help you determine their strengths and weaknesses.
Understanding your competitor’s pricing can help you set your own prices. It also provides information about the willingness of consumers to pay for a product or service, which can be useful in determining markups and price points
Do not stop gathering data at just these two pieces of information. You need to also identify the quality of their product or service. This will allow you to compare the different prices that similar products are being offered for, and it will give you a better understanding of what type of company your competitor is.
Monitor their marketing strategies.
Analyze advertisements, fliers inserts, or other promotional material. This will allow you to get insight into what your competitor is doing for their customers and how they are getting the word out about their business. It can also provide insight into why they are not successful in their respective industries. Knowing this information allows you to understand the desires of the customer which will help you to better position yourselves in the minds of your customers.
Understanding your competitive positioning will help you build a better marketing strategy.
Creating a unique marketing message for each brand in our product category requires us to identify the factors that set them apart from their competitors while taking into account how consumers perceive each brand.
It is important to note that while your competitors are certainly a factor when it comes to creating this message, they should not be the primary driver. Instead, your business should lead with what makes you different from all other brands in the product category. Feature differentiation messages play an important role in building brand equity and positioning within the customer’s mind.
Review their website.
Study what information is provided to the public on their site and how that information is presented. Many times, sites lack content or are poorly designed which can tell you something about how much emphasis they place on their online presence.
A competitor’s website can provide insight into their product or service offerings, but can also give you valuable information about how they promote themselves. Through an analysis of content marketing, the design and layout of their site, and what social media channels they use you can find out more about who your competitors are targeting as customers, where they spend their time online, which channels they are using to reach customers, and how engaged their customers are online.
Collecting competitor data
At a minimum, you want to collect the following information
- Key business objectives, goals, and strategies.
- Sales, Sales growth, profitability, market share, and other key financial measures.
- brand equity
- Product and service offering
- Pricing and distribution
- Major customers
- Corporate culture
- Organization charts
- Sales organization and compensation
- Share of voice/marketing budget/ advertising spend
Sources of competitive information
- Competitor direct sales representatives
- Proprietary research reports
- Competitive intelligence databases & professional service firms
- trade shows/ events/ conferences
- business publications
- Peer group companies (industry associations or trade groups)
- Industry analysts and consultants.
- Publicly-traded competitors with shareholder returns, annual
Tips to understanding your competitors
- Understand the relationship between your brand and the competitor’s brand
- Identify strengths and weaknesses of the competitor: Is it an advantage or a disadvantage to be compared with them?
- Underline any opportunities you can capitalize on: Are there key aspects of your product that competitors lack?
- Look for threats: Are there areas that your competitor is particularly strong in?
An advantage of this method is that it provides a straightforward way to identify a competitor’s strengths and weaknesses. This allows you to more effectively position your brand against competitors. It also enables you to understand how customers perceive your brand, which can be important when assessing your brand
When considering all points together with clear goals for growth, you’ll be able to develop a more effective brand strategy that will allow you to better position yourself against the competition while identifying opportunities for improvement within your company offerings. If you want help developing this type of comprehensive approach, reach out today!
Our team would love to work with you on your brand strategy.
Next, let’s look at the components that go into brand design.
Designing the brand