How to do Competitor Analysis for a Product and avoid crocodiles

This is an image of a crocodile in murky water for an article called The CAGR Conundrum Navigating the Murky Waters of Market Growth Estimation by Octopus competitive intelligence agency octopus market intelligence agency. How to do Competitor Analysis for a Product and avoid crocodiles

How to do Competitor Analysis for a Product and avoid crocodiles

Competitive product analysis is like the nervy yet exhilarating task of hunting a crocodile. Please bear with me. Picture yourself perched on the banks of a murky lake. You are aware that a crocodile lurks beneath the surface. It’s a high-stakes game of patience and vigilance. The crocodile represents your competitor—elusive, dangerous, and always ready to capitalise on your moment of weakness.

In competitive analysis, you’re not just watching. You’re seeking signs of the unseen. Every ripple in the water, every small disturbance, becomes a potential indicator of your competitor’s movements. Is that a crocodile’s eye breaking the surface or a deceiving branch?

To outmanoeuvre the crocodile, you need to understand its nature deeply. What is its history? Has it been a dominant force in these waters for years, or is it a newer, more aggressive entrant? Understanding its habits is crucial. Does it prefer to bask in the open, or does it strategise from the depths? Knowing your competitor’s strategies, market positioning, and customer base.

Predicting what the crocodile – or your competitor – might do next. Analysing past behaviour, market trends, and conditions can offer valuable insights. As a crocodile adapts its hunting strategies, competitors can change their approach. Launch new products or target new demographics. If you want to put your toe in the water, you would be reluctant to do so by looking first and analysing the environment. And not relying on a monitoring tool, no matter how good it is.

Onto How to do Competitor Analysis for a Product

Understanding your competition is just as important as understanding your own product. Comprehensive competitive product analysis provides valuable insights into the following:

  • Market trends
  • Product comparisons
  • Marketing strategies
  • Customer preferences

This article guides you through conducting a competitor analysis for a product. It also warns against jumping into crocodile-infested waters only armed with a software solution.

Understanding Competitive Product Analysis

Before competitive product analysis, it’s essential to understand what it entails. A competitive product analysis is an in-depth review of your competitors’ products. It involves identifying your actual competitors and then evaluating their strategies. To determine their strengths and weaknesses relative to those of your offering. It enables you to identify opportunities and threats within their market. So you can make informed decisions on marketing, product development, and overall planning.

Step 1: Identify Your Competitors

The first step in conducting a competitive product analysis is identifying your competitors. These can be direct competitors offering similar products or services. Or indirect competitors, offering different products but targeting the same audience. But you have to look beyond the obvious—the one lurking in the dark waters. For instance, if you sell organic skincare products, your direct competitors might be other brands like Burt’s Bees or The Body Shop. Your indirect competitors could be brands like Neutrogena, No7, or Olay. All offer non-organic skincare products but target the same demographic.

Step 2: Analyse Their Products

Once you’ve identified your competitors, the next step is thoroughly analysing their products. Look at features such as:

  • Price points
  • Quality
  • Design aesthetics
  • Packaging
  • Customer reviews and ratings

Back to the organic skincare brand scenario. You may find that Burt’s Bees has a wide range of products at affordable prices, while the Body Shop offers fewer options but focuses on premium-quality ingredients. This information can help you position your products strategically in the market.

Analyse Their Products 

But analysis within competitor analysis is often a glib afterthought, if done at all—or worse, done badly. It involves a more comprehensive approach beyond only examining your competitors’ current offerings and then just putting a quick SWOT together. It’s about understanding their entire product roadmap, looking at what they are currently developing, what they might be phasing out, and why. This broader perspective can provide valuable insights for your strategic planning.

Deep Dive into Current Offerings

Thoroughly analyse your competitors’ existing products. Include functionality, uniqueness, price, quality, design, and customer perception. Look for patterns in their offerings. Are they focusing on and trying to capture a specific market segment or cater to a broad audience? And why?

Investigate Future Developments

Find out what new products or features they are trying to develop. This could involve monitoring their patent applications and press releases. Or reading industry reports that reveal their plans. Or by talking to people who could know. Most will only know part of the story. Even less will want to tell you that whole story. But ask enough people, pull away at those strings, and you will build a picture. You may not find anything out, but if you dont look around and talk, you will probably not find anything. Of course, avoid being seen as interested or asking questions. Your experience may be blinded by what you see. That’s why people come to us.  

Assess Product Lifecycle

Understanding which products they are phasing out is as important as knowing what they are developing. Are they discontinuing older products? What could be the reason behind this—shifting market trends, poor sales, or a strategic pivot? Analysing these patterns offers insights into where the market is heading and the gaps that might open up. Are they missing a trick, or does their experience allow them to avoid an expensive mistake? 

Examine how your competitors market their products. What channels are they using? What kind of messaging resonates with their audience? This will help you understand the product itself and the ecosystem of promotion and sales around it. Monitor how customers respond to existing and new products. Reviews, ratings, and social media can reveal strengths and weaknesses in a product lineup. And hint at upcoming trends or shifting consumer preferences.

Understand Supply Chain, Manufacturing and networking.

Investigate their supply chain and manufacturing processes. Are they implementing innovations or efficiencies that could give them a competitive edge? Who are their suppliers? What does this tell you about their product? Is there anything you can explain? Does it reveal a product weakness or supply chain that customers need to be more comfortable with?

Attend industry events, webinars, and forums. Networking with people in the same industry can sometimes yield private insights. Research papers and market analysis reports are also valuable resources. Integrating these steps into your competitor analysis process will give you a dynamic and comprehensive understanding of your competition’s strategy, enabling you to react effectively to current market conditions, anticipate future changes, and position your products and brand.

Step 3: Evaluate Their Marketing Strategies

Understanding how your competitors market their products is crucial to competitive product analysis. Analyse their advertising campaigns, social media presence, SEO strategies, and content marketing efforts.

Back to Burt’s Bees may focus on content marketing by publishing blog posts about the benefits of organic skincare. In contrast, The Body Shop might invest in social media advertising to reach a younger demographic. Insights that can guide your marketing strategy. To help you identify areas where you can gain a competitive edge. This analysis goes beyond surface-level observation. It requires an examination of their marketing tactics and effectiveness. Here’s how to approach this:

Advertising Campaign Analysis

Scrutinise your competitors’ advertising campaigns across all their media channels. Which channel are they using? Are they wasting their time? Pay attention to the messaging, visuals, and target demographics. Are they focusing on print, online, television, or outdoor advertising? Assess the creativity, frequency, and reach of these campaigns. Determine what’s great and poor, who is watching it, and how you can improve it for your products’ benefit. 

Promotions, Event Marketing and Sponsorships

Identify the events, trade shows, or sponsorships they are involved in. This will reveal a lot about their market positioning and target audience. Are they focusing on industry-specific events? Or are they reaching out to broader audiences through cultural or sports events? Keep an eye out for special promotions, discounts, or sales tactics they use. Are they offering bundles, seasonal discounts, or loyalty programs? This can give insights into how they are driving sales and retaining customers.

Socials and SEO

Look at their social media presence across different platforms. Look at the content they post, the engagement levels, and how they interact with their audience. Are they using influencers, paid promotions, or organic community-building strategies? Look at their tone, frequency, and type of content with the responses they receive.

Evaluate their website and its SEO effectiveness. What keywords are they targeting? How do they rank for these keywords? Analyse their backlink profile, site structure, content quality, and user experience. Also, assess their online reputation. Look at reviews on platforms like Google, Yelp, or industry-specific sites. With the rise of OpenAI, remember the Bing search engine. Note that SEO and keywords are a very tiny part of competitive intelligence. Keep SEO platforms from telling you that keyword research and SEO are competitive intelligence. It’s not. 

Content Marketing Strategies, Email Marketing and CRM

Look at how your competitors are utilising content marketing. Are they producing blog posts, whitepapers, e-books, videos, or webinars? What topics do they cover, and how is this content shared and promoted? Understand how their content is aiding their overall marketing and branding strategy. Look at any visible aspects of their email marketing and CRM strategies. Subscribe to their newsletters. Then, analyse the content they send, the frequency, personalisation, and call-to-actions used.

Competitor Collaboration and Partnerships: 

Are your competitors engaged in any collaborations or partnerships? These can include co-marketing efforts, joint ventures, or endorsements. Such partnerships can be a significant part of a company’s marketing strategy.

Customer Feedback and Interaction

Monitor how your competitors engage with customer feedback and complaints. Especially on public forums like social media or review sites. Their approach to customer service and engagement can be a significant differentiator. Refrain from looking at the review site. Speak to their customers to find out what they think.

Thoroughly evaluate your competitors’ marketing strategies to gain insights into what works for them, identify potential gaps and opportunities for your strategy, and help you craft a more effective, targeted marketing plan that addresses unmet market needs and leverages your unique strengths.

Step 4: Understand Their Customer Base

The final step in conducting a competitive product analysis is understanding their customers. Analyse their customer reviews and feedback. Study their demographics and identify their preferences and buying habits.

Burt’s Bees customers might value affordability and variety. However, Body Shop customers may prioritise premium-quality ingredients over price. Understanding these preferences helps tailor your products and marketing strategies to better meet the needs of your target audience.

Monitoring what they are doing

Selecting the best competitive intelligence monitoring platform is useful. But it’s only part of executing a thorough competitor analysis for a product. But, this step should ideally come after you’ve worked on the other key aspects of competitor analysis. Once you have an excellent and ongoing understanding of your market and competitors. But here is how we would approach how to approach the selection of a CI platform:

Understanding Your Needs and Goals

Before choosing a competitive intelligence platform, knowing what you need from such a tool is essential. You need to have already taken the above steps of competitor analysis, that’s:

  • Identifying competitors
  • Analysing their products
  • Evaluating their marketing strategies
  • Understanding their customer base

This will give you a clearer picture of the required data and insights. Competitive intelligence software will not do the work for you. It can be a great tool, but without your input, all you have is an expensive empty box with lots of data coming into your desktop. And no one ever says that they need more data. Dont expect a magic button.

Identifying Key Metrics and Data Points

Analysis identifies the metrics and relevant data points to you and your industry, such as product features, pricing strategies, marketing channels, customer demographics, etc. Conducting a thorough competitor analysis allows you to see the gaps in your current understanding and strategy. Gap analysis is important. It helps isolate the capabilities needed in a competitive intelligence monitoring tool. Knowing these will help you select the right competitive intelligence software platform. One that can effectively track and analyse these elements. It can also help you decide if you need a platform.

Customisation and Integration

Understanding your business processes and systems is important long before selecting a competitive intelligence tool. Insights gained from analysing competitors can guide you in choosing a platform that integrates with your existing tools and processes and can be customised to suit your needs.

Selecting the Platform

When you are ready to choose a CI monitoring platform, consider factors like:

  • Real-time monitoring capabilities
  • Ease of use
  • Data accuracy
  • Integration options
  • Customisation
  • Customer support
  • Cost
  • And is it going to give you anything you are going to use? 

Then, there are the actual insights gained from using the competitive intelligence platform. Your research should be regularly reviewed and used to refine your strategy. As your competitive landscape evolves, your requirements for a software tool will change, necessitating periodic reassessment of what you’re using and researching. 

Avoid crocodiles and how to do Competitor Analysis for a Product

Conducting a thorough competitive product analysis is invaluable to gaining a competitive edge. Start identifying your competitors now. Dig deep into understanding their products and strategies for the success of your next product. It will help you understand your market standing. To identify growth opportunities and make informed product development and marketing strategy decisions. Competitor analysis is not a one-time job. It’s an ongoing process. Market trends change quickly, new competitors emerge, and customer preferences evolve. Regular competitor product analysis should be key to your business planning from now on.

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