What is competitive analysis?
Competitive analysis, also termed competitive research, refers to a strategic research process that specializes in the collection and analysis of information about a company’s competitors in the market. A competitive analysis framework is an essential tactic to identify what the competitors are up to and the potential threats that they can pose to the company’s well-being.
Top players in the market have already realized the potential of competitive analysis in marketing and selling their products. Today, using new software and technology, marketers, and business owners have the ability to know more about their competition than ever before. Regularly keeping track of the rivals in the market helps organizations stay ahead of the curve – Contact us to find out how we can help.
Here are four reasons why competitive analysis in marketing is highly essential:
The competitive analysis framework helps companies identify where there stand in the market and what the competitors are doing. This would prompt companies to take the extra step to offer something more. Competitive analysis in marketing and sales helps identify the areas of improvement with that of the competitors’ brands. Changes can be made accordingly and communicated to the customers by highlighting the key benefits of choosing your products or services when compared to others in the market.
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Today, category convergence is more common than ever before. When global brands diversify and expand their offerings, they start to compete in industries in which they do not have any prior expertise. Many marketers have already begun to regard the term ‘category’ is a misnomer. An energy drink in the beverage category could also be competing in the health & wellness category in the market, depending on the consumers’ perception of the category and brand.
Identify market gaps
A competitive analysis framework helps identify the unserved or underserved gaps in the market. This tool lays out competitors in terms of their unique service models, identifies where they fit on a matrix with extremes ranging from low price to high price, low quality to high quality, and low customization to high customization. It helps companies to easily spot where they stand in the market and whether there is a scope for improvement
Analyze market trends
Competitive analysis can reveal the current trends in the marketplace, which provides the advantage of being able to spot opportunities for differentiating your products and services. Often, going against the grain can attract a small but highly loyal counter-culture market segment in an industry. Analyzing the market trends help companies to determine if they are in line with the current trends or if they are following outdated trends for which corrective action needs to be taken.
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