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.
Direct Competition
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 Competition
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.
Summary
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.
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