Analyzing direct competitors
When creating a marketing plan, it is critical that you know your competition and can evaluate your strengths and weaknesses in comparison so that you can capitalize on your strengths. It is important to note that a direct competitor is someone who sells the same basic things as you, and thus fills the same buyer need as you. It is like Huggies and Pampers. They are both selling diapers, wipes, and other baby care products, thus filling the same buyer need in the same way. The following are some tips for doing an analysis of your direct competitors:
- Who are your direct competitors? You can't analyze someone you have yet to identify. Thus, get out there and identify whom your direct competitors are. If you are online based you will likely have several more competitors than if you have a retail location.List out each competitor, leaving space for an analysis.
- What ongoing or situational threat or opportunity do they present? In other words, what are their strengths or weaknesses? If you are a grocery store, your direct competitors are other grocery stores in the area. Do they offer better prices? Fresher produce? Better customer service? Is their location more easily accessible? Do they accept more coupons? Do they have better or worse signage? Do they offer more or less selection? Each of these are threats or opportunities. For example, if you have fresher produce, you can take that as an opportunity to capture some of their market share by promoting this fact in your advertisements.
- When will this threat or opportunity materialize? Once the threats and opportunities have been identified, you have to evaluate the timeline. For example, if they are expanding, the threat will materialize when the expansion is complete. This gives you a set time frame to work around. Sometimes the threats and opportunities are already there and will remain, such as the opportunity you have if you have a better location. Other times it is something that is an event or a campaign they will be running.
- Where will this threat or opportunity materialize? Depending on your organization type, understanding the location of your threats and opportunities is huge. Are they opening up right next to you? Will they be online or retail? Let's say, for example, the opportunity you note is in one-hour photo, and you can expand your customer base by offering online uploading options.
- Why and how will this threat or opportunity materialize? Figure out the specifics so that you can address them and create a marketing plan around them.
When analyzing your direct competitors the goal is to learn what you can about them so that you can face them head on. If you don't know and understand your competition, there is little you can do about them taking your market share. Learning their strengths and weaknesses shows you where you can do better in order to attract more customers.