In this blog,
· What is competitor analysis?
· Why is competitor analysis essential for success?
· 4 steps to do competitor analysis
What is competitor analysis?
Competitor analysis is the process of determining your competitors' strengths and shortcomings. To understand each competitor's marketing tactics more, you will have to study their business, cost, marketing channels, market share, and other characteristics.
Competitor analysis includes:
· Business analytics
· Product analysis
· Marketing evaluation
With the latter being a little more detailed. If you're just interested in one area, you can skip certain sections or, better yet, assign some stages to different teams.
Why is competitive analysis essential for success?
Competitive analysis, when done correctly, will provide you with a wealth of quantitative and qualitative data to support your own business decisions. Entrepreneurs, business owners, start-up founders, product managers, and marketers will highly benefit from this approach.
You can benefit from a competitor analysis by recognising your industry and its competitors, establishing your distinct value offer, and establishing actionable benchmarks for assessing your success. But, first, determine your competitors' winning techniques.
No matter what sort of goods you're selling or how established your company is, whether you already have a fully working product, an MVP, or even just a product concept, you can still do a competitor analysis and benefit from it.
To stay competitive, fine-tune your marketing plan. Your results may be used to set benchmarks, analyse your current marketing plan, and perhaps establish a new one.
4 steps to do competitor analysis:
Step 1: Note down your competitors:
Create a list of all the big players in your niche. This list indicates who you could be competing with for your audience's attention and who you should concentrate on during your competition analysis. Begin by making a list of competitors that you are already aware of. These will most likely be companies in your niche and city that provide similar goods or services.
Step 2: Analyse your competitors’ profiles:
Now that you've compiled a list of competitor companies, it's time to discover more about them and how they stack up against you. We'll do this by looking at:
· Market share
A company's market share is the percentage share in the whole market it controls. The greater your market share, the more power you have on product pricing, public perception of you or your items, and other factors. Sales or revenue are commonly used to calculate market share. In digital marketing, however, you can look at metrics like traffic or active users to calculate market share in a way that is relevant to your objectives.
While market share may reveal which rival has the most significant impact on your target audience, it does not reveal who that target audience is. Understanding the demographics of your target market may help you connect with them while also developing products and services that successfully meet their demands.
For this step, you can do your research using questionnaires and surveys. You can also use tools to help you rapidly learn the essentials about your target market.
Some of the metrics you can focus on include:
· Age, gender, and demography
· Social media presence
You can create the audience persona using this information. Then, you can see how your target audience compares to and overlaps with your major competitor companies.
After this, we can create a competitor profile that includes information like the size of the company, locations, history, and other vital details.
Step 3: Identify your competitor company’s 4Ps:
After you've gathered all of your basic information, it's time to focus on "the four Ps of marketing:
Analysing your competitors' 4Ps will help you learn more about their marketing strategies.
To begin, go over your list of competitors and do a thorough dive.
Spend some time on their websites and look for the items or services that are prominently displayed. Check out the new product/service launches, and see which products/services are successful.
Now analyse the sales and discounts that are part of their pricing strategy. Also, see if they have referral programmes and free trial offers. Take note of the products/services are on discount/sale. Finally, analyse the data you gather and come up with your inference.
Then look at your competitors' marketing channels to see how they reach their target demographic. Because your audiences are likely to overlap, this will help you understand their promotion approach and show you which channels are likely to resonate with them.
Find out where they market their goods. Can customers buy their products online or in stores? Do they sell directly to customers or through merchants or third-party marketplaces? These questions are intended to serve as a jumping-off point. Feel free to build on them and adapt your questions to your industry and study objectives.
You'll almost certainly uncover a plethora of information. Condense your results into small bullet points so you can refer to them later.
Step 4: Analyse and come up with an action plan.
Consider the strengths and weaknesses of each of your competitors using the information you've gathered. Consider why customers prefer a certain company's product or service over the alternatives. In your spreadsheet, write out your conclusions.
Finally, analyse the strengths and shortcomings of your own organisation. How does your company stack up against the others you've investigated? Knowing what sets your company distinct from the competition—and where it falls short—can help you provide better service to your target market.
You can use a online tools to help you with your competitor analysis. For expert assistance you can always reach out to us!