Do You Understand your competition?
Understanding of your competition is important to the success of any business. Even if your product is unique in the market, there may be other companies offering something a similar product to satisfy the same customer’s need.
The key when thinking about your competition is to learn what makes the customer choose a competitor over your brand. The different options that customers consider are usually competitors.
Competition can be either direct by selling the same product, or indirect by competing for the same market space. The intensity of that competition, whether direct or indirect, will affect the overall potential for success of your business.
It is important to consider all types of competition when planning your business, to ensure that you have the edge over others in your industry.
Multiple businesses offering similar products create direct competition. Titleist and Nike are direct competitors. That is true of a local plumber and a franchise like Mr. Rooter.
Customers will likely consider a variety of price points, service levels, and product features when deciding where to buy something. However, not all customers will choose the same combination of those options, and that is essentially why competition exists.
Developing a unique positioning for your product/service will allow you to reach a different type of consumer. Competing businesses that target wealthy consumers, for example, are not likely to compete on price, whereas competitors for working-class customers may try to offer the lowest possible price.
Understanding where your competitors are positioned is the key to identifying the gaps that your business can fill.
Indirect competitors are businesses that offer slightly different products and services, but target the same group of customers with the goal of satisfying the same need. These can be substitutes or optional spending opportunities.
In the personal entertainment arena a consumer looking for activity may choose to golf, bowling, or take the family to a ball game. In each case the activities compete for the entertainment dollar but satisfy the same need.
Almost all businesses face some sort of indirect competition. Service providers, such as web designers, face indirect competition from do-it-yourself services such as Wordpress and other templates. All of these services satisfy a customer's need to have a web site.
By considering all the possible ways your customers' needs can be satisfied, and creating a strategy for handling that competition, you will create an advantage over other businesses that believe they are unique.
For any business there is competition in many forms. Using a branding specialist can help you position your product to maximize your market opportunity. Contact Ed Roach – The Branding Expert to improve results.