Beyond Comparison: Exploring the Benefits of Competitor Analysis in Today’s Market

Beyond Comparison: Exploring the Benefits of Competitor Analysis in Today’s Market

Competitor analysis is a process of learning about your competitors’ products, services, marketing strategies and other factors. This helps you identify their strengths and weaknesses, as well as opportunities and threats to your own business.

Importance Of Competitor Analysis:

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• Identify your target market: By understanding who your competitors are targeting, you can better understand your target market and make sure you’re reaching the right people with your marketing messages.
• Identify your competitive advantages: By understanding your competitors’ strengths and weaknesses, you can identify areas where you have an advantage over them. This information can help you focus your marketing efforts and resources on those areas where you can be most successful.
• Anticipate your competitors’ moves: By tracking your competitors’ activities, you can get a sense of their plans and strategies. This information can help you stay ahead of the competition and avoid being surprised by their actions.
• Develop new products and services: By understanding what your competitors are offering, you can identify gaps in the market and develop new products or services that meet the needs of your customers.
• Improve your marketing strategies: By comparing your marketing strategies to those of your competitors, you can identify areas where you can improve your own efforts.

Learn More: A Simple Formula to Perform Competitor Analysis for SEO

How to Do Competitor Analysis?

When conducting a SWOT competitor analysis, your goal is to gain insights into your competitors and their marketing strategies. This valuable information can help you identify areas where you can outperform them.

Outlined below are the fundamental steps to guide you through the process of competitor analysis:

Identifying Your Competitors

Start by compiling a comprehensive list of key competitors that are worth monitoring. This will help you understand who might be vying for your target audience’s attention and provide guidance on which competitors to prioritise in your analysis.

We will guide you through the process of finding your competitors in four critical areas:

• Begin by identifying competitors within your industry. These are companies that offer similar products or services as yours. It is important to focus primarily on direct competitors, which means brands that cater to a similar niche or address a similar need.
• Consider the size of your business and the level of competition you face. For example, a local Toyota dealership may rank for similar keywords as the overarching Toyota brand, but their direct competition would be other local dealerships.
• Always consider the context and use competitor analysis reports and tools accordingly.

Here are a few approaches to help you identify your direct competitors:

• Market Research: Conduct thorough competitor analysis to identify companies that offer similar products or fulfil the same purpose. Consult your sales team to gather insights on which companies frequently arise during the sales process.
• Customer Feedback: Once customers choose your product, inquire about the other products they considered. This feedback can help you identify closely related companies that are potential competitors.
• Social Media and Online Communities: Many people seek recommendations on social media platforms and forums like Reddit and Quora. Explore customer conversations on these platforms to uncover potential competitors.

Remember, even if you don’t run paid advertisements or have a physical storefront, it is still crucial to do competitor analysis in organic search. Skip the steps on finding paid search competitors and local SEO competitors if they aren’t relevant to your business.

Traffic Radius has access to free competitor analysis tools to help you build a robust list of competitors in your industry, enabling you to gain valuable insights.

Researching Your Competitors’ Product, Price, Place and Promotion

Once you have gathered initial insights, it’s time to delve into the essential aspects of marketing known as “the four Ps”: product, price, place, and promotion.

Let’s break it down:

• Product: Assess how your competitors’ products or services meet the needs of customers.
• Price: Examine the pricing of their products or services.
• Place: Determine where customers typically look for and purchase their products.
• Promotion: Explore how they advertise and promote their products to customers.

Understanding the Four Ps of Marketing

Gaining this information about your competitors will provide you with a deeper understanding of their marketing strategies.

• Product: Begin by visiting each competitor’s website and consider the following questions:
  • What is their most popular product or service?
  • What features does their product offer?
  • Who is the target audience for this product?
  • What problem does this product solve?

  What To Do?

  Take thorough notes on your findings using a template. By navigating through your competitor’s website, you can gain valuable insights into which products they prioritise and prominently feature.

• Price: Once you have identified popular products, focus on their pricing.

  Consider the following points in your competitor analysis:

  • How does your competitor’s pricing compare to similar products?
  • Do they frequently offer sales, discounts, or special offers?
  • While it’s important to maintain profitability if you notice that your competitor’s price similar products lower or consistently offer discounts, you may need to adjust your pricing strategy accordingly.

• Place: The third P refers to the availability of your competitor’s product or service. This can include physical storefronts, online stores, or both.

  To understand this aspect, ask yourself the following questions:

  • Where does your target audience typically shop?
  • Which distribution channels should you utilise to reach your audience?
• Promotion: Promotion revolves around the channels through which customers learn about your competitor’s product, encompassing both advertising and brand messaging.

Building Competitor Profiles

Now that you have identified your main competitors, it’s time to delve deeper and gather more information about them.

Creating a comprehensive profile for each of your key competitors enables you to benchmark crucial details, such as market share and audience demographics.

Let’s start by analysing market share, which refers to the influence a brand holds within its industry.

• Analysing Market Share: Market share represents the percentage of a company’s sales or revenue compared to the total sales or revenue of its industry. Understanding your market share can provide insights into the overall health of your business as well as that of your competitors.

Competitor Analysis Example: Here’s an example of market share information for Apple:

To calculate market share, divide a company’s total revenue by the total industry sales.

Here’s a step-by-step approach:

• Select a fiscal period (typically quarterly or annual).
• Calculate the company’s total sales for that period.
• Calculate the industry’s total sales for that same period.
• Divide the company’s revenue by the industry’s sales.
• Multiply the result by 100 to obtain the market share percentage.

We recommend completing this step for your primary direct competitors. This will help you benchmark your success within your industry and gain valuable insights into your position relative to your competitors.

Learn More: Learn How to Analyse and Compare Website Traffic of Your Competitors

Understanding Audience Demographics

• Analyse Existing Data: Begin by analysing the data you already possess. Explore your customer database, website analytics, social media insights or any other relevant sources of information. Look for patterns and trends in customer demographics, such as age, gender, location, interests and purchasing behaviour.
• Conduct Surveys and Interviews: Create surveys or conduct interviews to directly gather specific demographic information from your audience. Ask questions about age, gender, occupation, income level, education and other relevant factors that enhance your understanding of the target audience.
• Utilise Market Research: Make use of market research tools and reports to acquire industry-wide demographic insights. Such SWOT competitor analysis reports often provide data on consumer behaviour, preferences and demographic profiles. Valuable sources include industry associations, market research firms, and government publications.
• Monitor social media: Pay close attention to the social media platforms where your target audience is active. Analyse their profiles, engagement patterns, and interests. Social media platforms usually offer audience insights and analytics that deepen your understanding of the demographics of your followers and engaged users.
• Employ Audience Segmentation Tools: Utilise audience segmentation tools to categorise your audience based on various demographic factors. This enables you to create targeted SWOT competitor analysis tailored to specific segments. Customer relationship management (CRM) software or marketing automation platforms often offer segmentation capabilities.
• Keep an Eye on Competitors: Monitor your competitors and study their marketing efforts. Analyse their messaging, content, and targeted audience. This provides valuable insights into the demographics they focus on and helps refine your targeting strategies.
• Leverage Third-Party Data: Consider leveraging third-party data sources, such as data aggregators or providers, to gain additional insights into audience demographics. These sources can provide information on consumer behaviour, preferences and purchasing patterns that complement your existing data.

Developing Your Competitor Profiles

Now that you have gained insights into your competitors’ audience and market share, it’s time to enhance your competitor profiles by gathering essential company information. This information provides valuable context that can aid in analysing your findings and formulating a more competitive marketing strategy.

For instance, while one of your competitors may be relatively new in the market if they have secured substantial funding, they might pose a greater threat than a larger, more established competitor.

What To Do?

You can discover basic information about your competitors in the “Company Info” section of the Traffic Analytics “Overview” report. This includes details such as the categories they operate in, their funding amount, and the number of employees they have.

Competitors Analysis Tip:

• Researching competitors’ social media accounts can also provide additional insights.
• Compare this information with the analytics data about your audience obtained from Social Media Analytics.
• Maintain consistent information for each competitor to facilitate easy comparison and analysis.

Conducting a SWOT Analysis

Once you have completed your competitor analysis and gathered valuable insights, it’s time to transform those observations into actionable insights through a SWOT analysis.

SWOT competitors’ analysis stands for strengths, weaknesses, opportunities, and threats. To perform a SWOT analysis, use the following template and fill in each quadrant based on your competitive analysis findings:

• By completing a SWOT analysis for both your brand and your competitors, you can compare the responses to the questions above to identify areas where each brand excels.
• This analysis will enable you to pinpoint your strengths and areas where you can improve.

Conclusion

In conclusion, competitor analysis is of paramount importance for businesses. Here are key points highlighting the significance of this practice:

• Competitor analysis enables businesses to identify both direct and indirect competitors within their market or industry.
• By analysing competitors, businesses gain valuable insights into the marketing strategies employed by their rivals. This includes studying their product offerings, pricing strategies, distribution channels and promotional activities.
• Competitor analysis reveals potential gaps or weaknesses in the market that can be capitalised on by businesses. By identifying underserved customer segments or unmet needs, businesses can develop innovative solutions and seize new market opportunities.
• Comparing your brand’s performance with that of your competitors provides a benchmark for evaluating strengths and weaknesses. This assessment helps identify areas for improvement, set realistic goals and formulate effective strategies to gain a competitive edge.
• Regular SWOT competitor analysis enables businesses to stay updated on market trends, customer preferences, and emerging competition. This information empowers businesses to adapt quickly to changing market dynamics, make informed decisions and maintain a competitive position in the long run.
• Informing Strategic Decision Making: SWOT Competitor analysis plays a vital role in strategic decision-making. It assists businesses in determining pricing strategies, product development, marketing campaigns and expansion plans by considering the actions and outcomes of their competitors.

Overall, competitor analysis is an indispensable tool for businesses to gain a comprehensive understanding of their competitive landscape, identify growth opportunities and make informed decisions to drive their success in the market.

By leveraging the competitor analysis report, businesses can strategically position themselves, differentiate their offerings and achieve sustainable growth.