How to Identify Key Competitors in Marketing

One of the first steps in developing a successful marketing strategy is identifying and analyzing your fellow competitors. You can do this through detailed market research. If you do not know who your competitors are, it is likely that someone else will gain a competitive advantage. For example, someone may have a more user-friendly website or offer the same product at a lower price. After you have identified your competitors, you must stay current on their offers and products, in order to stay competitive in your business.

Take stock of your primary products or services. You will compete for consumers with other companies on these products. List the products in a column on a spreadsheet and piece of paper. While you may have some tangential products or services that boost your sales, you are not in competition with other companies that sell those.

• For example, you may include complimentary key chains with your company name in every order of t-shirts you ship. This is a nice bonus for the customer, but it doesn’t put you in competition with office supply stores.

• More generally, let’s say you have a pizza restaurant. You sell pasta, but this is a very small portion of your profits. Pizza is where you make most of your money. You are not in competition with Italian restaurants that specialize in pasta dishes, but other pizza restaurants instead.

Find companies that sell that product or offer that service. Pretend you are a consumer. Search for those products or services using a phone book, an internet search on more than one major search engine, on online marketplaces, and through social media sites. Write five to 10 names of competing businesses in the rows on your paper or spreadsheet. Even if you deal primarily in local business, anyone who sells a product is in competition with internet sellers.

• Looking in the phone book may help you identify local competitors. Looking on social media accounts will help you to identify new, emerging competitors.

• It is important to search both locally and nationally. With the rise in the global economy, there may be a company in another country that offers the most similar product to your own. You may not be able to compete with the low prices of an offshore manufacturer, but knowing they exist can help you focus your local marketing campaign.

Identify your competition.

The kind of product or service you offer determines who your competitors are. This is divided into your industry, market and strategic group. Your industry is made up of business that offer the same or a similar service. Your market is made up of the locations where your product and services can be bought and sold. Your strategic group is made up of businesses that share a similar business model with your business. You may have competitors in more than one of these areas. You need to evaluate the strengths and weaknesses of all these companies when assessing key competitors.

• You can determine industry competition based on your service, such as supplying foreign tea imports.

• You can determine your market based on tea sellers in your area.

• You can determine your strategic groups as all stores offering the same prices and marketing strategies to sell their tea.

• You should also consider your demographic or geographic market. Your demographic market is made up of people of different ages, socioeconomic classes, and genders. Your geographic market is made up of people from different cities, states, regions, and countries.

Do word-of-mouth market research.

Ask consumers in your area as well as your own customers who they buy from or which services they use. Word-of-mouth is often the best way to tell the success of other businesses. Ask friends and family, and then consider employing a market research firm to survey a wide array of people.

• This may reveal customers’ logic behind choosing your product or service in one situation, and someone else’s in another. For example, you may find that customers prefer your pizza restaurant for a nice, family experience. They may, on the other hand, prefer another pizza chain when they have the late night munchies.

Do a simple survey.

It is important to survey not only your customers, but your competitors'. Try to get a list of your competitors' customers, even a partial list is great. Asking your competitors' customers instead of yours shows you why people chose others' products or services over your own. It also shows you what you can focus on in marketing to win over new customers. There are a few main areas to craft surveys around:

• Customer satisfaction

• Competitor's performance

• Customers' expectations and desires

Determine if your market or industry is growing or shrinking.

It is important to figure out not only how well your company is doing, but all companies like yours. Knowing this will tell you whether or not the product or service you offer is stable enough for you to reach into adjacent markets to look for more sources of profit. You may also need to redesign the products and services you offer if they are becoming obsolete.[2]

• Stay on top of local and national news. Read the business section of the newspaper. There should be articles from time to time about your market or industry sector.

• Check with the US Bureau of Labor Statistics for data. They compile and publish a huge amount of data about all areas of the American economy.

• Read history books. If your business sells a product or service that has been available in its basic form for a long time, you can learn general trajectories, slumps, and spikes in sales from knowing your history.