If you are a student of marketing, then you need to have a good understanding of your competition. Many people go online to conduct research. If you do not have all the information about your competitors, then how will you be able to reach them effectively? There are different steps that one follows in order to carry out market research.
This is known as competitor analysis or competitor profiling. By doing market research, you will be able to identify your competitors’ strengths and weaknesses and use their own strategies against them. When you start out your business, it is crucial that you know all there is to know about the products and services like yours available in the market. You need to learn everything possible about your competitors’ sales approach and marketing tactics so that no aspect of their business model goes unattended by your close observation.
Why Market Research is So Important?
The importance of market research cannot be emphasized enough. It is one of the most important factors in determining the success or failure of a business venture.
The primary objective of market research is to find out what your customers want, need and like so you can craft your product or service to meet those needs and desires. Market research tools are used to find out what your customers think about certain products, services or issues. You can use them to get valuable information about your competitors as well as consumer preferences for different brands and products.
Trying to get a business off the ground without doing any market research is like trying to build a house without blueprints. You might be able to build the foundation, but you won’t know where to go from there.
Market research allows you to break down the barriers between you and your target audience. You will be able to create products they will want in an effortless way that doesn’t require you to guess what they need. This also gives you the advantage of being one step ahead of your competitors who don’t bother with market research. The more data you have on consumer trends, the better you can position yourself as a go-to source for all things related to your industry.
The following are some questions to consider as you think about your target market:
- Is there a need for your product or service?
- How much will people pay for it?
- What do they like and dislike about the products they currently use?
- How can you reach them most effectively?
- How much competition is there in your marketplace?
- What are their buying habits and needs?
- How can you position yourself in the market?
Doing Market Research
Market research is the systematic collection and analysis of information about an issue or problem, often to help make business decisions. Market research uses public data, surveys, and interviews to identify trends in consumer behavior and preferences. Businesses use market research when creating new products, launching marketing campaigns, and deciding where to open new stores.
There are three different types of market research: primary, secondary, and exploratory.
Primary research involves collecting original data through surveys or interviews.
Secondary research uses existing data from other sources such as journals, reports, or surveys conducted by others. Exploratory research combines these two approaches by using secondary sources while at the same time gathering new data through surveys or interviews.
To learn more about user behavior, you can use one of the many free tools at your disposal like Google Analytics. It will allow you to track how people are using your site, where they’re coming from, and how long they stay on your site. It’s a great way to learn about how people interact with your brand or company.
You can also talk to customers directly. You don’t necessarily have to pay for interviews either. If someone leaves a comment on your blog or social media page, ask them why they took an action or why they had an opinion about something. You can also simply tweet out a question and see what your followers say in response.
Asking questions will give you insight into the problems customers are facing as well as their desires, which can help you develop products that resolve those issues or fulfill those wishes.
Conducting a Competitor Analysis
Competition is a fact of business. Every industry has competitors, and every business owner knows that competing businesses are the biggest obstacles to making more sales or achieving higher profits. It’s important to be aware of these competitors, not only because they can help you make better decisions about your company’s future but also because you need to be able to identify them in order to market your business effectively.
Learn your competitors’ strengths and weaknesses.
One of the first things you should do when you start to formulate a marketing strategy for your business is conduct a competitor analysis. How? By doing exactly what this article is going to tell you: learn as much as possible about your competitors’ strengths and weaknesses so that you can develop ways to either duplicate their most successful tactics or avoid those associated with failure.
There are three types of competitors a business owner needs to know about: direct, indirect, and potential.
A direct competitor is any other business that offers products or services that are similar enough for consumers to choose between them on the basis of price, quality, delivery time, and other factors. As an example, consider a small coffee shop. The shop shares the same customers as Starbucks — people who want coffee in the morning — but it doesn’t have all of the products that Starbucks has.
An indirect competitor isn’t a direct competitor because it provides a different type of product or service than yours does. A video rental store, for example, is indirectly competing with Netflix (and Blockbuster) because its customers are also movie buffs who want affordable access to new releases as well as classics from the past. The convenience of instant streaming is a desirable alternative to visiting a video store and having to walk home with several VHS tapes or DVDs in hand. But these businesses aren’t direct competitors for one another because they offer different products and services.
Potential competitors are those businesses in your targeted market that have either entered the market or might enter the market in the future. You need to find out what their strengths and weaknesses are, what their strategies are and how they hope to differentiate themselves from their competitors.
Knowing your market will be crucial in getting your products distributed. A lot of research will be needed to find the right retail partners and distributors for your product. Data points to consider include number of customers, regional availability, price point, demographics, etc. These same metrics can be used with your most important competitor. Many products are doing similar things but providers can maximize revenue by doing the smart thing (and the hard work) with their marketing plan and the acquisition of their retail channels.