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Competitive Analysis 1 September, 2006

Posted by varoom in Marketing Plans.
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Analysis of the other suppliers of similar products to your target marketplace, sometimes called competitors, is an important task providing some key benefits to your marketing planning process. Textbooks often guide you through product analysis, market share, strengths, advantages, opportunities and Threats (SWOT).

But why do we do this analysis? For two reasons, firstly in advance of development of a product this analysis can provide some clues to gaps in the market segmentation or weaknesses in the products on offer to the market, which in turn can provide a basis for a product development. Secondly it’s useful to carry out competitive analysis after product development in order to confirm if the competition has spotted the gap and modified their product or the market itself has changed. This analysis also may reveal some unique marketing advantage which may influence how the product is promoted or positioned in the marketplace.

In the rare occasion there is no competition, either because the market is new, or that the existing players cannot make money out this market segment, the competitive analysis can provide information on how your product can be price positioned.

Your core competences as a company should become a competitive strength that you should leverage, marketing your strengths can help position the product against the competition.

Competitive analysis from a customers’ perspective is also important. Sometimes it’s not a particular technical strength or weakness that reveals and opportunity but the image of the product. There are many cases where an inferior product with a top class image can win over a superior product. This analysis could reveal that creating a market image is more important in the competitive arena than stressing the features.

Potential investors will also value a good analysis of the competition and their image in the marketplace. One question will come very quickly is “how easy will it be for the competition to catch up”, or “how easy is it to duplicate your product features”?

In summary, you can learn a considerable amount from carrying out competitive analysis make sure you invest some time in this area.

Varoom

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Comments»

1. W Moss - 20 August, 2012

Just to clarify….. by ‘market image’, do you mean ‘marketing’?

varoom - 20 August, 2012

Another word for image, in the context I’m using it here is “Brand”. By image I’m referring to what picture, of your product, resides in the mind of your customers. Sometimes brand is everything.
Grev

2. W Moss - 29 August, 2012

Or perhaps not just the brand, but more the marketing strategy? I’m imagining, for example in the enterprise space that one’s marketing strategy can be more effective on the overall uptake of the product than the features or usability of the product itself. Would it be fair to say that? Hence why Oracle are so keen to sponsor a lot of sailing events, and why one used to see (at one point) a lot of SAP advertisements in airports.


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