Creating a Marketing Plan, Part 3: the Competitive Analysis
In the last post, we discussed personas – a way to find out who your target audience is. Today, we focus on finding out who’s also competing for that target audience.
Chances are, unless you’ve come up with a new product or service that no one else has thought of, you’re going to have competition in the marketplace. The success of your business depends on how you position yourself in the midst of all the competition, differentiate yourself, and entice people to choose your product instead of another business’ product.
What is a Competitive Analysis?
For this, you need to perform a competitive analysis. You need to find out what products and services your competition offers and how they differ from yours. Some things to consider include:
- Customer service
- Strengths and weaknesses
How do you gather this information? This is the fun part. It’s time to do some detective work.
- First, visit their website. You can gather a lot of information, including how they’re positioning themselves in the marketplace, by their website content. Visit their About page. Take a look at their features, benefits and pricing. How do they differ from yours? What, if any press releases do they have? Any annual reports or whitepapers?
- Check out social media to see what they post, how often they post and how many followers they have. Also look for reviews on websites such as Yelp or Angie’s List. Search for them on Google and see what comes up.
- Don’t be afraid to call them, or if they exist in a brick-and-mortar store, visit their business. How is their customer service? How is their store set up? What makes it different from yours? Ask questions (they don’t know who you are). Collect any circulars, sales brochures and other marketing materials you find.
- What’s their marketing strategy? Do you see ads on the web, social media, radio or TV? Do they do any direct mail marketing?
Performing the Competitive Analysis
Now it’s time to do the analysis. When you begin working on this exercise, you’ll want to do it in a SWOT format: Strengths, Weaknesses, Opportunities, and Threats. You can do this from any perspective, whether you want to think of your strengths, weaknesses, opportunities, and threats or your competition.
Take what you find on your competition and compare it to what you’re doing. How could you change your business to compete with these businesses? Is it better marketing? Does your store need to be better laid out? Do you need to expand your services? Part of the analysis is figuring out what the data means to your business. Take a hard, objective look at what you’re doing and see where the competition is beating you – and where you’re beating the competition.
A competitive analysis does more than help you understand your competition:
- It can give you insight into what you need to do to make your business better. Are most businesses cheaper than yours? You may want to reexamine your pricing strategy, or do a very good job at differentiating why your product or service costs more.
- You can find out if there is a niche in the market whose needs are being unmet. You need to then examine if you can fill that role, and you may need to revisit your personas.
- If the market is full, you can discover how to make your product or service stand out from the rest through some of the items uncovered in the analysis (price, features, etc.)
- It can help you capitalize on your competitors’ weaknesses. These are areas that differentiate you from the competition, and it can help make up a person’s mind when they’re deciding on a company to go with.
In The Art of War, Sun Tzu wrote, “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat.” Business can be a cut-throat world. It’s best to know who you’re competing against so you can present your business in a way that will make you stand out from the rest of the companies in your niche.
In our next post, we’ll put everything together to come up with a marketing plan.
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