To create a successful marketing strategy, businesses need to understand the competitive landscape that they are operating.
This means understanding each competitor's market share, their relative strengths and weaknesses, and how they are positioned in the market.
What Is Competitive Analysis In Marketing?Competitive analysis means identifying and evaluating the competition to gain a competitive advantage. It is a vital part of any business planning and decision-making process, as it allows businesses to identify opportunities and threats and make informed decisions about their strategic direction.
Understanding The Journey To Conduct A Competitive Market AnalysisSeveral methods can be used to conduct a competitive analysis, but the most common approach is to use market research data and tools. This includes surveys, interviews, focus groups, and secondary data sources such as online insight tools.
Once the data has been gathered, it is essential to analyze it to identify the key insights that will be most useful for developing a competitive advantage. This may involve market segmentation techniques, SWOT analysis, or Porter's Five Forces analysis.
Once the key insights have been identified, they can be used to develop a competitive advantage. This may involve developing new products or services and entering new markets!
Benefits Of Competitive Market AnalysisThere are many benefits of conducting a competitive market analysis. Some of the most common benefits include:
- Helps businesses understand the market they are operating in
- Make informed strategic decisions
- Stay ahead of the competition
- Maintain a strong market position
- Identify opportunities and threats in the market
- Understand customer needs and wants
- Develop effective marketing strategies
- Benchmark their performance against the competition
- Identify areas for improvement
- Find new ways to compete in the market.
Here's Why You Need a Competitive Analysis!If you want your business to stay ahead of the competition, then you need to know what they're up to...at all times.
That's where competitive analysis comes in. A competitive analysis is basically a report that you compile that assesses all the key players in your industry and how they're performing.
Think of it this way: if you were going to enter a boxing match, you wouldn't just step into the ring without knowing anything about your opponent, right? You would want to know their strengths, weaknesses, fighting style, etc.
So why would you go into business without conducting a competitive analysis of your industry? You need to know what you're up against!
Curious about how to conduct a competitive analysis? Keep reading for a step-by-step guide.
How to Conduct Your Competitive Market Analysis?The first step is identifying your competitors. This can be done by simply Googling key terms related to your business/industry and seeing who comes up.
Once you have a list of competitors, it's time to dig for information. Here are some things you'll want to find out:
- What goods and services do they offer?
- How do they differ from what you offer?
- What target market do they focus on?
- What's their pricing structure like?
- What promotional channels do they use? (e.g., social media, TV ads, etc.)
- What type of tone do they use in their communications? (e.g., serious, playful, etc.)
- Is there anything they're doing that you're not?
- Are there any areas where you have an advantage over them?
For example, let's say that you own a women's clothing boutique, and you've noticed that none of your competitors are using social media very effectively. You could develop a strategy for using social media to reach more women in your target market and thereby grow your business.
Steps To Conduct A Competitive Market AnalysisThe competitive market analysis aims to help businesses make informed strategic decisions about positioning themselves in the market and what steps they need to take to stay ahead of the competition.
- Know your competition. This step is critical in understanding the playing field. Be sure to research not only your direct competitors but also any indirect or potential competitors.
- Understand your target market. Another key step is understanding your target market and what they are looking for. This will help you to tailor your products or services to meet their needs.
- Analyze your competition. Once you have gathered information on your competitors, it is time to analyze their strengths and weaknesses. This will give you a better idea of where you stand in the market and what areas to focus on.
- Develop a competitive advantage. This is perhaps the most crucial step in the process. Once you have identified your competition's weaknesses, you can develop a competitive advantage that will help you to stand out in the market.
- Monitor your competition. Finally, it is essential to keep an eye on your competition. This will help you to stay ahead of the curve and be prepared for any changes in the market.
Tips To Start Competitive Market AnalysisThere are a number of different ways to conduct a competitive market analysis, but some of the most include desk research, customer surveys, and interviews with industry experts.
- Desk research is a good starting point for any competitive market analysis as it can provide an overview of the market landscape. This can be done by looking at industry reports, company websites, and trade associations.
- Customer surveys are another valuable way to gather information about the competition. This can be done by conducting online, telephone, or in-person interviews.
- Interviews with industry experts can also help understand the competitive landscape. This can be done by talking to people who work in the industry, such as salespeople, marketing professionals, and consultants.
Next Steps!A competitive analysis is essential for any business owner who wants to stay ahead of the competition. By taking the time to understand what your competitors are doing—and, more importantly, what they're not—you can develop strategies to better position yourself in the marketplace and grow your business.
Looking for more business advice? Let's talk and find out how your business can grow more with a quick Competitive Market Analysis. Don't worry; you won't have to bury your head in the data while we are here for you!