Lets Talk About Competitive Analysis In Product Marketing

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Hello there!

I hope you are doing okay? I believe it has been a fun and educational experience coming on this journey with me.

Today, we will be talking about competitive analysis. The beautiful thing about competitive analysis is that you can do it forever. The is no limit to the amount of information you can gather or the level of detail to have.

Because of how broad competitive analysis can be, there are three approaches to help narrow it down. They will help you prioritize the most important aspects of your analysis;

  • Specific purpose analysis
  • Competitive advantage
  • Marketing strategy and marketing tactics.
Specific Purpose Analysis: Narrow your analysis for the specific people for which you are doing it. In this way, you skip all strategies and tactics that are irrelevant to the decision you are trying to arrive at. 

Competitive Advantage: There are two types; economies of scale and customer captivity.

Economies of scale: this enables companies to lower their costs as they get bigger. This applies more to companies with high brand awareness. 

Customer captivity: this is similar to customer loyalty, but, it's not just because brands are loyal that they stay with your brand. It's more because there are structural reasons. 

There are three sources of customer captivity;

  • Search cost: these are the time, effort and resources required to go and find a replacement for your product. An example is a customized product like your music platforms. Let's face it, the reason some people would stick to a music platform that is frustrating them is because of their playlists and library of music. 
  • Switching cost: these are the costs incurred by customers in transitioning from one company to a competing company.  An example is a product that requires training to use. 
  • Habit formation: these are products that are used daily, purchases that happen automatically.  An example is drinking coffee every day and considering changing to green tea. It isn't something you would want to act on for the fact that you are already used to drinking coffee. 
Marketing strategy: there are two parts to this strategy, they are;
  • The first part is looking at Target Market. The entire target market is defined by the 5C's; customer, competitors, collaboration, context, and company. Compare the 5Cs of your competitors with yours. 
  • The second part is Value Proposition. This is how value is created in the target market for three groups of people; customers, collaborators and the company. Ask yourself what value your product is bring to these groups of people. 
Marketing tactics: there are seven(7) tactics in competitive analysis; price, communication, product, brand, service, incentives, and distribution. 

All you have to do is draw out a table and analyze your products with that of your customers with these few steps as a guide. Competitive analysis is endless and based on your goal for your business, you will know where to focus on and how to go about it. In competitive analysis, you will have to research a lot about your competitors, but that is a good thing because it helps you know if you are also on track or not. 

I hope you found this helpful.

Till the next post.

Franny. 

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