The Basics of Competitive Analysis — Foundation Series — Part Six

Like a KNIFE FIGHT in a PHONE BOXs!.png

Modern advertising would like you to believe that every individual product is unique. When you peel back the layers however, that’s just not true. While there may be visual distinction among things like cars and smartphones, there are increasingly fewer practical differences between them.

That doesn’t mean you can’t own a category. It does mean you have to get creative and understand not only your product, but your competition’s as well. Then you can carve out a segment for yourself and own it.

Fully Understand The Competition

It’s time for competitive research. In order for your competitive analysis to be as thorough and valuable as possible, you need to understand every facet of your competitor’s offering. This requires an evaluation from every possible angle. Visit their website, explore their social channels, read reviews and commentaries, download any relevant documents, and if possible, try out their product.

Picture yourself as the consumer. If you had a problem solved by their product, what is appealing about that? What is the value proposition of that product? How would you evaluate its application?

By understanding how potential customers approach your competition and your product, you can reflect on and refine your own processes and positioning.

What Are They Doing That You Aren’t?

Armed with your research, you should be able to start identifying areas of differentiation. Is the competitor product less expensive but offers fewer features? What about the packaging? Store shelf or online sales display? Longevity, durability, valuation over time? How do you compare? What’s most valuable to your customers? Where can your product shine best?

Every difference between the two products should be included in the competitive analysis. Not only will this make the analysis as comprehensive as possible, the small things can often be just as impactful as the big ones.

The penultimate step in creating a competitive analysis is doubtless the most time consuming, as you’ll repeat everything you’ve done up to this point for each other competitor in your industry. Depending on your offering, this may actually be impossible. If that’s the case, then look at your segment within the industry. Who are your top 2 competitors and who are the two aiming at your spot on the ladder?

Make It Count

Your competitive analysis can be the guide for all staff to understand your product’s market position relative to the competition. It’s the quintessential “This is Us, This is Them”. So while it may seem tedious to pull together, it’s highly valuable information. Review it regularly, update as new competitors emerge in your market or as new products come out in similar market segments. In order to make your marketing work, you need to always understand the context in which your customers and potential customers are seeing it and evaluating it.

Writing the Guidebook

The final part of creating a competitive analysis is to write the formal document. Ideally, the competitive analysis should include five sections:

  • A list of your company’s competitors and their positions in their market segments
  • Summaries of your competitor’s products or services
  • The strengths and weaknesses of your competitor’s products or services as seen by consumers
  • The positioning and marketing strategies used by your competition. As someone in the industry, you should be able to identify key tactics that competitors are using in order to attract customers.
  • A general forecast of the market. Does the data suggest the number of competitors will rise or fall? What are some possible ways existing products may improve? Are there any external factors which may affect conducting business?

A competitive analysis is invaluable for any business, as not only does it allow you to better understand your competition, it provides key insight as to what works and what doesn’t within the marketplace.

While your own product should come first and foremost, understanding its strengths and weaknesses relative to others in the market will help you iterate and improve on it.

The Check List

  • Research the competition
  • Evaluate from the customer’s POV
  • ID Product differentiators
  • Analysis on the research — what does it mean for your product positioning
  • The final report
  • Reviews and updates

 

Marketing Fundamentals: Standing Out

In an age where products are becoming identical to each other, the key differentiator often becomes how a product is marketed. Assuming quality is identical, the product with the stronger brand presence is the one that wins.

In its most basic terms, the goal of marketing is to encourage someone to perform an action. One of the biggest challenges, and perhaps the most important challenge in all of marketing, is to rise above the cacophony and emphasize that the action you are requesting people take is best for them.

Iconic advertiser Ed McCabe once said, “disciplined creativity is often the last remaining legal means you have to gain an unfair advantage over the competition”, a sentiment that is still true today. Anyone can make an ad that shows a product; it’s quite a different story to make people want to buy that product.

What’s interesting about, and unique to, advertising is that if you create the ‘greatest ad’ ever made, win all the awards with it, but you have no increase in sales, then you’ve failed to achieve the goal of advertising: move the product.

This may sound cold, but Adam Morgan put it best:

“Advertising is like a knife fight in a phone box.”

To which Dave Trott adds,

“There isn’t anywhere to hide. There isn’t any place for bystanders. Everyone has to choose. Do they want to be the predator or the prey?”

 

If you want to improve your in-house advertising skills, give us a call. We bring over 100 years of advertising history and lessons to bear on our strategic approaches. Let us know if you’re stuck in a phone box somewhere.