Generally, this competitive market research analysis article is for both new and established small business owners — who want to analyze their competition to improve their products or services. With that in mind, in terms of market research, when was the last time you ran a competitive business analysis? And most importantly, do you know how to do one efficiently?
If you’re not sure, or if the last “analysis” you ran was a quick perusal of a competitor’s website and social media presence, you’re likely missing out on important intelligence that could help your brand grow. Consultants like Aljabal PRO provide valuable assistance to anyone, especially, those looking to start a new business in places like the U.A.E territories — Dubai.
Given that; it can be quite challenging for many entrepreneurs to set up their businesses there due to the complex laws and regulations that have been put in place. But, these professional consultants will assist you navigate the process and ensure you get started right. For instance, with a custom strategy, they’ll analyze the market segment to help grow your company.
With that in mind, in this article, we will explore the benefits of having a strategic competitive research analysis plan and how outsourcing can help you. So, stick with us a little more and make your business formation process quick and smooth! First of all, let’s have a look at why doing a competitive research analysis is important for your overall business, shall we?
Understanding How A Market Research Works For Businesses
To enumerate, market research is a process in business marketing that involves gathering information about your industry, customers, and competitors so you can make informed decisions. Small business owners use the data they collect when they create a business plan. Bigger companies may engage a market research firm to collect customer and industry details.
The main reason why most businesses outsource a competitive research analysis team is that they’ll create a detailed strategy to help you move your business towards its unique goals. Not forgetting, a business setup consultant can provide all key recommendations in all areas of digital growth. From marketing and advertising to branding, lead generation, and more.
As well as do thorough research on various business industry trends, conduct a competitive analysis, and gain a throughout understanding of your target market and user behavior. Armed with research insights, they’ll help you create a custom plan to meet your growth goals and financial objectives. Such a team will evaluate your current plan for project management.
With a great market research strategy, coupled with the right market research tools, you’ll be able to know how your customers are finding your service solutions and product offerings. You’ll also be able to track, analyze, and monitor as well as learn more about your market dominance. And also, be able to act on any missed opportunities and give the best experiences.
What A Competitive Market Research Analysis Can Do For You
A Competitive Market Research Analysis is a strategy that helps research major competitors to gain insight into their products, sales, and marketing tactics. Implementing solid business strategies, warding off competitors, and capturing market share are just a few benefits of conducting a competitive market analysis. Regular competitive analyses can greatly help.
Especially, whilst acting as a source of information for you to spot opportunities to innovate, promote your business, enhance your products or services, and outshine your competition. Just like we aforementioned, we can clearly state that a Competitive Research Analysis – competitor research analysis – is a way of evaluating how well your business is set up to run.
The method provides insights into knowing how your business products or services are performing compared to other companies selling similar products or services in your market. Usually, it focuses on identifying market participants positioned. To encroach on your opportunity and isolates each participant’s operational strengths or substantive weaknesses.
A great competitive market research analysis plan helps you;
- discover where your business is doing well and where you need to improve
- understand which business and consumer trends you need to get ahead of others with
- complete a survey analysis when your company isn’t moving forward as fast as you want to
- know when your potential competitors are securing orders from your ideal customers
- examine your competitors’ features, market share, pricing, marketing, differentiators, strengths, weaknesses, etc.
- learn more about the right market to target based on geography, culture, customer reviews, and more
- know the best methods to optimize your business website, market your services, advertise your products, and the like.
Oftentimes, your business chases roughly the same customers as its competitors. You offer comparable products or services to each other. But, you’re not entirely sure why you win some orders but lose others. A dip analysis can provide you with the road map needed to capture a greater market share — to better understand how future trends will affect your sector.
A Business Surveying Kit To Determine Customer Pains And Needs
Given the speed of technology, in an era of digital innovation, no business can remain preserved in time and expect to survive. Companies can disappear overnight if they don’t pay attention to new trends. A clear example of this is Blockbuster’s catastrophic error of initially dismissing Netflix’s services. Today, Netflix is a juggernaut, while Blockbuster is virtually extinct.
Even if your sector is not susceptible to this type of seismic change, it’s worth knowing what drives your clients’ decision-making processes. So that you can focus on the explicit areas that demand more of your support and attention. Such as addressing your website user behaviors, your target customer buying experience, how well your business stands out, etc.
In a nutshell, marketing research is a tool that helps identify and define marketing opportunities and problems. It allows you to evaluate your marketing efforts so as to understand the marketing process. Some direct marketers may be tempted to conclude that they understand national consumer trends and that such trends have little or no relevance to their business.
For instance, a great market research strategy can help technology-driven farmers to be able to look “outside of themselves” as they gather valuable business information. As well as serve in helping them understand any related business marketing issues and come up with effective solutions to such problems. Perse, there are two basic market research types to lean on.
They are as follows:
- Qualitative: Its research addresses issues that deal with “why” or “how” and is usually achieved through observation or unstructured conversations with customers.
- Quantitative: Its research addresses issues that deal with “how many” or “how much” and usually involves a survey using a questionnaire. However, for the questionnaire to be effective, you’ll need to give serious consideration to the content.
When designing a marketing questionnaire, you must first determine the reason for the survey. What specific problem are you trying to solve, what decision are you trying to make, or what question are you trying to answer?
Some possible issues you may be trying to address include:
- In what advertising media should I spend my advertising dollars?
- Are there certain media I should use to reach my customers?
- What image does my facility/product(s) or personnel portray?
- What other products or services should I be offering?
- Why do my customers buy from my competitors?
After you have determined what you want to learn from the survey or questionnaire, there are a few criteria to note.
Consider the following:
- Relevancy: Does the question relate to the objective of your survey?
- Brevity: Questions should be limited to 20 words or
- Objectivity: Questions should not be worded to suggest a particular answer by “leading” the
- Clarity: Is the question expressed clearly in words that the respondent will understand? Avoid words such as much, most, few, often, occasionally, should, could, and might, as they will mean different things to different people
- Specifications: Will the respondent be able to answer the question? (Sometimes respondents will answer questions that they do not know the answers to so that they do not appear )
Just as we aforementioned, it’s extremely important to identify the specific information needs of the business before designing the survey questions. The interpersonal skills of the person conducting any interview are critical. Essentially, for the customer to fully support the interview process and to have the sense that the info will be useful to the business and them.
The Steps To Actualize A Competitive Market Research Analysis Strategy
To create a successful and strategic competitive market research analysis plan, there are a few things that can guide you along the way. On one hand, there is an array of competitive research analysis tools that you can use. Still, you can consider doing your market research using existing sources, or rather, try to do the research yourself and go direct to consumers.
On the other hand, existing sources can save you a lot of time and energy, but the information might not be as specific to your audience as you’d like. Perse, you can use it to answer questions that are both general and quantifiable. Like industry trends, demographics, and household incomes. Just check online or start with this list of market research resources for more.
Be that as it may, for more guidance on deciding which methods are worthwhile for your small business, the U.S. Small Business Administration (SBA) provides counseling services in detail for you. More so, through this resource partner network where you can borrow more information. Forthwith, before you can begin, try to limit the number of competitors you analyze to 10.
And then again, focus your attention on direct and indirect competitors with similar market shares rather than replacement competitors. Next, to make sure that you do things right, and that you get tangible results, you can consider some of the strategic competitive market research analysis tips that we’ve listed below. They will come in so handy in your next decisions.
Step #1: The key business services or products
In this case, the first thing is to identify the key products or services you want to evaluate. For most analyses, they will be the products or services that generate the highest revenues or demonstrate the most significant potential for growth. Find all the features that each direct competitor’s product or service has. Keep this information in a competitor insight spreadsheet.
Particularly, so as to visualize how companies stack up against one another. What makes your competitors unique and what do they advertise as their best qualities? How is that different from your company? Are there some other custom business methods that you can utilize — whether traditional marketing techniques or modern strategies — to drive more results?
By answering such questions, you’ll be able to glean more data to help you strategize for your next plan. Try to identify what your competitors are doing well and what works for them. Do reviews indicate that they have a superior product? Do they have high reputation awareness? Can you test a competitor’s products yourself to see where they are performing better?
Step #2: Aim for your direct business competitors
Clearly, the message “change is inevitable, growth is optional” applies to each of us and to every business at large. Food consumption patterns demonstrate changes in where and what we eat. As an example, the number of “new” foods introduced in stores each week numbers in the hundreds. Similarly, “convenience” foods are seen to occupy more shelf space than ever.
In fact, even the meat case holds products such as goat and bison that were seldom seen in stores just a few years ago. To keep up with these changes in the ever-growing online marketplace realms, it is extremely important for direct business marketers to acquire all the useful information they can get. More so, through a competitive market research analysis plan.
Most companies compete for roughly the same market with comparable products or services. For example, accountants compete against other accountants. Asking consumers yourself can give you a nuanced understanding of your specific target audience. But, direct research can be time-consuming and expensive. Use it to answer questions about your key areas.
Such as your specific business offerings or customer pains and needs. Still, focus on other key elements — it could be the customer reactions to your logo, the way your website layout resonates, some notable improvements you could make to increase the buying process, how you can optimize User Experience (UX), and where customers might go instead of you.
Step #3: Pinpoint your topmost indirect competitors
These companies target the same market but with different products or services. For example, accountants compete against bookkeepers. Ask yourself: What type of marketing plan does each competitor employ? Look at competitors’ websites, their social media strategies, the type of events they sponsor, their SEO strategies, their taglines, and current marketing campaigns.
By the same token, make sure that you identify what each of your indirect competitors could be doing better to give you a competitive advantage. Do they have a weak social media strategy? Is your digital online marketing (in-house or outsourced) team not doing their work properly? Or rather do your indirect competitors lack an online store? Is their website outdated?
Step #4: Use SEO to examine your replacement competitors
These companies offer a different product or service but address the same issue as your products or services (for example, apps that assist entrepreneurs). The best strength here is to pinpoint how much your competitors charge and where they fall on the quantity versus quality spectrum. Still, this applies to Local SEO first before addressing your International SEO needs.
By utilizing a working Local SEO strategy, you’ll be in a better position to first place your business on top of your replacement competitors given their same are of business as you. And then, thereafter, once you are fully satisfied with the outcomes, you can now focus on making use of International SEO to drive global-based consumers to your business marketplace.
But, this should also be powered by all other best Technical SEO skills in the mix. As a rule of thumb, the reasoning here is to be able to utilize all available channels — direct and indirect tools — to help drive results. Coupled with a responsive website, quality content, business blogging, leads targetting, Paid Search, display advertising, referral affiliates, bonus, coupons, etc.
Step #5: Determine your most worthy areas to invest
Moving on, it’s also good to determine which parts of your competitors’ businesses are worth investigating. These aspects could be pricing, distribution and delivery strategies, market share, new products or services coming to market, who their long-standing, highest-spending customers are, the quality of after-sales support, and which sales and marketing channels they use.
For your information, evaluating the marketplace by percentage helps identify the main competitors in your area. But, don’t exclude larger competitors entirely — they have much to teach you about how to succeed in your industry. Instead, practice the 80/20 rule: Eye for 80% direct competitors (companies with similarly sized market shares) and 20% top competitors.
Step #6: Research all identified business competitors
You may only find minimal accounting and operational records for most competitors, especially, nonpublic companies. Other useful info – like target customers, product features, type of staff employed, and price points – will be easier to find. Look at where your competitors are located and the regions they service. Is it a brick-and-mortar store or run by associates?
Are they a group of companies or is the bulk of their business performed online? Evaluate your competitors’ company culture, objectives, employee satisfaction, and the like. Are they the type of business that advertises the year it was established or are they recent startups? Make sure that you read their employee reviews for further insight into competitors’ cultures.
In some cases, you may find that you are at a competitive disadvantage, in which case you may need to make a change in order to maintain your sales volumes. Still, in other cases, you may notice that you have an advantage that could enable you to make a change that increases your sales or profit. Moreover, your identified business competitors will help you bridge all the gaps.
Step #7: Document your research in a written analysis
According to an article by businessnewsdaily, there is a correlation between documenting things and still using the best innovative methods to do so. That being said, it’s clear to say that Innovation is the process of modifying existing operations, products, or services to introduce new and improved offerings. Creativity and brainstorming are key innovation factors.
Of course, your business may be well prepared to fully utilize the data it has gathered from its competitive market research analysis plan, yes. But, without creativity fueling new ideas during brainstorming sessions and the actual plan rollout, things may not turn out as planned. Every time your favorite brand rolls out a new product, that’s innovation in action.
Equally important, every time one of your vendors introduces a new billing system that streamlines your payments, that’s also innovation. Innovation doesn’t have to be as game-changing as inventing the computer. In fact, you’ve probably been innovative many times throughout your life. Innovate more consistently and conscientiously to improve your sales revenue.
To encourage any of the key innovation types, empower your team, forge a collaborative work environment, collect customer insights, and document everything. Make sure your document is substantive and actionable, but not so long that your staff won’t read it. Comparison charts and graphs are useful to help you and your team visualize your position in the marketplace.
Step #8: Identify areas to improve and execute the changes
Could you improve the quality of your products or services by adding or amending a feature, lowering the price to be more affordable, or improving after-sales support? Could you achieve a better ROI on your marketing budget by investing in a more capable Customer Relationship Management (CRM) Strategy for better leads conversion and potential leads management?
Technically, our webmasters recommend including information about related trends in your market and region for a more complete picture of the entire competitive landscape. Document what threats are out there that could have a negative impact on your business. Also, document the opportunities out there that you could take advantage of better than your competitors.
Regular competitive analysis is key. You may want to do the analysis once a year on a large scale and quarterly on a smaller scale. Always remember, that too many businesses do a competitor analysis early on and then neglect it once their brand is established. Industries are constantly changing, and each time a new company enters your space, they are right into it.
Whilst, doing a competitor analysis on you and other businesses like yours. Thus, it’s important to continually evaluate your competitors. You may want to consider using another model – like Porter’s Five Forces – to further analyze the competition. Also, try to give your customers a thank-you gift — like a coupon or one of your products for participating in the survey.
Step #9: Work on integrating direct market research
This is a strategy to help identify and define marketing opportunities and problems. Whilst, allowing you to evaluate your marketing efforts, and helping you to understand the marketing process. Some direct marketers may be tempted to conclude that they understand national consumer trends and that such trends have little or no relevance to their business.
However, this is a competitive market research analysis plan that helps business owners (like farmers) to look outside of themselves for information. As well as a general way to help them understand marketing problems and solutions to these problems. Luckily, there are various elements that can help drive your direct market research strategy a step ahead.
- Focus groups
- In-depth interviews
Using some of the above-mentioned methods (among many others) can help you further understand your topmost competitors. Furthermore, it allows you to distinguish yourself from the competition, focus on underserved market opportunities, determine the services to offer, identify the best practices to employ and isolate the worst practices and rotten players.
Step #10: Track your overall performance results
Last but not least, the final step is to tabulate the overall competitive market research analysis performance results. So that, thereafter, you can now develop a plan of action based on the information you’ve received. After all, the ultimate purpose of market research is to aid you in decision-making and therefore improve the performance of your business.
By keeping a regular eye on your marketplace through competitive analysis, you can convert more leads into web-based organic traffic, turn your potential customers into active buyers, and gather more data to help in remarketing.
You’ll also be aware of trends like:
- Changes to competitors’ existing products or services that make them more attractive
- New complementary products or services from your contenders that you could also offer or alter
- The threat posed by new market entrants or transformative products
Measure your sales with a profit and loss statement to determine if the changes were successful. Analyze your competitors’ customer reviews, both positive reviews and negative ones. In a 5-star system, look at 5-star, 3-star, and 1-star reviews. Three-star reviews are often the most honest. Not forgetting, Google My Business (GMB) is a tool to help you gather genuine reviews.
The keynote here is that analyzing your business regularly against your competitors will reveal opportunities to improve your products. It’ll also provide a better path to serve your target customers and increase levels of profitability.
In a nutshell, the main role of strategic market research is to help in finding the most potential customers — whether they are looking for services, solutions, or they want to buy products — for your business. On that note, competitive research analysis helps you make your business unique — just combine them to find a competitive advantage for your startup business.
What’s more, a great market research plan will tell you if there’s an opportunity to turn your idea into a successful business. One more thing is for sure, it’s also a very great way for your business to gather information about potential customers and businesses already operating in your area. Use that information to find a competitive advantage for your business.
That’s a wrap! You now have an idea of what a competitive market research analysis entails, how it works, the benefits, plus the basic steps to do it effectively. Notwithstanding, if there is something else that you think we can add to this guide to make it even more resourceful, kindly let us know in our comments. Or rather, Contacts Us if you’ll need more support.