Market analysis is one of the parts of marketing that gets the least attention. Companies are so often so focused on what they are doing that they don’t pay attention to what their competitors are doing. To avoid being surprised by your opponent, always be aware of what is happening. How to do a competitive market analysis? You should always keep an eye on your direct competitors, as well as the market and your customers. If you don’t, you might get surprised by an enterprising newcomer.
How to Do a Competitive Analysis?
A detailed study of the market might make you feel a little overwhelmed. Even though it’s true that it takes a lot of work, the process can be broken down into much more manageable steps.
Here are three steps to take you on the right track:
- Figure out who your rivals are.
- Take a close look at the products your competitors are selling.
- Find out how much of the market your competitors have.
Find Out Who Your Rivals Are
If you don’t know your competitors, you can’t do market research on their businesses. Even though you probably already know the companies in your field and which ones are the biggest, you might not know which ones your target customers are most likely to think of. Let’s say you own a business that sells shoes for men and that your target market is wealthy hipsters. That’s a pretty specific group of people. You must know which shoe brands come to mind when people in that category think about shoes.
Study Your Competitors’ Products
Now that you know what brands your target audience is thinking about, you can start learning more about those brands. It would help if you got to know their products as soon as possible. What do they have that you don’t, or what do you have that they don’t? How much do they cost, and how does that relate to what you have to offer? Look at how good the items are and see if they’ve gotten better, worse, or stayed the same.
The second question you should ask yourself is how easy is it for people to use their website? It’s important in this situation not to look at your brand through rose-colored glasses. It would help if you also tried to find out what each of your competitors offers in value.
Put another way, the company’s values and why customers should buy from the company. Look at the words on their website to figure out what they’re all about. Maybe the site advertises that it is good for the environment or has the best prices. It’s essential to know how your competitors attract customers. Try drawing a map of the market. During market mapping, competing brands or products are placed along an axis based on how they compare.
Market Share Ratio
If you look into the finances of your competitors, you might learn a lot about how well their businesses are doing. At Companies House, you can look at the accounts that UK-based businesses have sent in. During this time, publicly traded companies in the US will post trading reports on the websites of their own companies. With the information in this report, you can figure out how big or small a company’s market is when you divide a company’s total sales or revenues by the industry’s total sales for a certain period.
You can get an accurate picture of that company’s market share. With this metric, you can get a general idea of how big a company is compared to the industry’s size. You could also see if the company is getting a bigger market share. If a company wants to keep its market share, its revenue growth should be about the same as the market. Conversely, a company that grows its market share will also see its sales grow faster than its competitors.
Conclusion
The competitive information you get from these sources should bring to your attention anything that needs to be looked into more. It’s important to remember that step one must be done often to ensure you’re keeping track of all the competitors you need to and that no new ones are gaining ground. The landscape of competition can change at any time.
For example, if an indirect competitor comes out with a new product line, it could quickly become a direct competitor. You can also study the competition to reevaluate your market position. You can do this at any time.