Business owners, C-level executives, and marketing leaders typically know a great deal about their competitors. The internet and social media have made it very easy to learn about your competitors. Having access to a great deal of information is not the same as knowing the right things about your competitors.
Businesses have traditionally understood competition to occur on four levels:
Do you want to win the competitive race for your company?
- The brand level – your competitors are other companies that offer similar products and/or services to the same group of potential customers at prices that are similar.
- The industry level – your competitors are all companies that make the same products or class of products.
- The market level – your competitors are all companies that make or sell products that meet the same need or provide the same service.
- The generic level – your competitors are all companies that compete for the same consumer dollars.
For example, at the brand level, Pepsi’s competitor is Coca-cola. The two drinks are very similar. They are sold at about the same price. And, they advertised to the same potential customers. At the industry level, Pepsi’s competitors are all cola products. All cola products include RC Cola, sold at prices similar to Coke and Pepsi, as well as bargain colas. At the service level, Pepsi’s competitors are all soft drinks. Viewed at this level, Pepsi competes with all other soft drinks available from all manufacturers. At the generic level, Pepsi’s competitors are all drink products. At this level Pepsi competes with bottled water, coffee, tea, powdered drink mixes, etc. – any liquid refreshment.
The first step in knowing the right things about your competitors is to identify who they are on each of the four levels of competition. Your company’s closest competitors, clearly, are those who are trying to reach the same target market groups with the same strategy.
Your company (its executive leaders and its marketing team) need to know eight things about your competitors:
- Who are your competitors, and on what level do they compete with you?
- What are their product/service development strategies? How do they develop products and/or services to gain competitive advantage in the marketplace?
- What are their marketing strategies?
- What are their social media strategies? How do they engage customers and prospects on social platforms? How do they use social media to compete and to build loyal customers?
- What are their customer service strategies? Are their customer service strategies competitive differentiators?
- What are their objectives? Do they just want a place in the market? Do they want to be the market leader? Do they want to dominate the market and push you out? (Think in terms of short-term vs. long-term profits, market-share and share growth, cash flow, technological advances or technological leadership, customer service, return on investment, etc.)
- What are their strengths and weaknesses? What works for them, and what works against them? What are their customers saying about them? What kind of reviews do people write about them? (Think in terms of technological sophistication, geographical scope, manufacturing methods, product quality, product features, product mix, pricing policy, sales strategy, financial strategies, etc.)
- What are their reaction patterns? (Are they a laid-back competitor that reacts minimally to a competitive move on your part? Are they selective, reacting only to certain kinds of competitive moves by other firms? Are they fierce competitors, reacting swiftly and decisively to moves by competitors, determined to fight to the death? Are they stochastic (completely unpredictable) competitors, who may or may not react or react in a predictable way to moves by other companies?
Do you know the right things about your competitors? These eight things are what you need to know about all competitors. This information forms the foundation of your competitive strategy in product/service development, marketing, sales, and customer service. Few companies will have the resources to compete on all levels against all competitive points. You will need to analyze your competitive landscape, choose your battles, and work strategically to achieve your goals. With this information, you can do the analysis and win in the market.
If you need help analyzing your competitors or developing a strong marketing strategy, Little Black Dog Social Media is here to help. We have been analyzing markets and creating powerful strategies for many years.
Romeo, the little black dog, would like you to know that he has been very busy (as the temperatures climb) sniffing out new strategies to grow your business.