The Importance of Competitive Analysis
Do you truly understand who your competitors are? Have you analyzed which brands are direct competitors, as well and who are indirect? Do you know all of their product/service offerings? Has your company conducted market research on the matter?
It is vital to track your competition so you can stay ahead and know what the white space is. You would be shocked to know how many brands do not know where to start when asked about their competitors. Countless companies have never conducted a competitive analysis.
Many brands only look at their main competitors without looking at smaller/quick-growing companies or brands in different industries but offer similar services. For example, Gartner and TomTom navigation systems were caught off guard when Google Maps provide the same service, but for free. Within just a few weeks of the introduction of Google Maps, the navigation systems valuations dropped considerably.
This type of intelligence gathering helps companies improve efficiency, growth, and profit through accurate information gathering and thorough analysis.
Competitive Analysis Checklist
The first step will be to identify your direct competitors. Once you have that decided, you should explore the following areas about each of your competitors:
- Market potential
- Trends and opportunities in the market
- Advertising landscape, this should include the following:
- Current offline advertising
- Digital advertising
- Social advertising
- PR/communication initiatives
- Current key message
- Supporting points
- Tone, look and feel
- Call to action
- Ad spend
A great place to start this process is with the competitors’ websites. Analyzing websites is the most accessible information for everyone. Get back to basics, look at the layout, look & feel, products/services offered. From here, it will be possible to decide on what you like and dislike, what you perceive to be working and what is not.
In addition, it is crucial to look at Ad spend. Ad spend is not as easily accessible as the websites, but it is an essential part of competitive analysis. Your product may be better, and the message might be on target, but your competition may significantly outspend you when it comes to advertising. This number will explain a lot in terms of awareness and market penetration. If you cannot compete when it comes to an advertising budget, it will allow you to focus your budget on the correct channels.
How to Conduct Competitive Analysis
Secondary research is a great way to conduct this type of analysis. However, it is a significant undertaking and can take hours of work. There are also parts of the research that will be most accurate if you ask consumers directly about the competition (e.g., survey and focus groups). It is often necessary to get a research company involved because, other than the website analysis, most of these insights are on secondary databases. Plus, those with strategy experience have a better perspective of analyzing the data and providing insights on the white space and areas of concern. They often recommend where you need to tweak your current marketing plan.
When to Analyze the Competitive Landscape
By conducting this analysis at least twice a year, you can better understand what is happening with the competition. You will be sure to keep up with them and if they are making any changes to their marketing initiatives. You can determine their strengths and weaknesses, allowing you to understand better where you stand and what your differentiator is. All of the information that you gather from a competitive analysis will work towards enhancing the brand’s strategy.
If you want to learn more, check out our other blogs on topics that will help your company when it comes to research:
Types of Research Every Advertiser Should Know
The Importance of Secondary Research When Launching a Brand
If you’re thinking of hiring a market research company to conduct your competitive analysis for you, this blog may be helpful to you:
Questions to Ask a Market Research Company