How To Do Comparative Market Research
May 7, 2012 Leave a comment
When meeting with business owners, there are two questions I ask of them. The first one is who their best customers are (their target market). The other question I ask is who they think their competition is.
Many times I get vague answers to who their competition is. I feel like the reason this happens is because they are unsure of the word “competition” in relation of their business. According to dictionary.com, the best definition in regards to business, competition is “the rivalry offered by a competitor (opponent)”. Based on this, if your potential target market could go to some other business, hey are your competitor.
Here are some things I would recommend in order to develop and implement a good competitive analysis for your business.
- Develop an in-depth SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for your business. Without this, you will likely have a hard time determining what to do the analysis on and what you feel are your competitive advantages are.
- Within your industry and marketplace, identify key factors that customers use (consciously or unconsciously) to make a buying decision. This will very for every industry and marketplace.
- Rate the factors in relation to importance to the customer. Use a simple scale like 1 to 5 or 1 to 10.
- Identify top competitors. Be reasonable on the number. You could do an analysis that is exhaustive. However, doing this could limit any type of competitive analysis and provide results that are not actionable.
- Preform the analysis. If you could do a blind shop, that would be best. However, based on the size of the industry and marketplace, this is not always possible.
- Analyze the results. Doing research and not analyzing it is a time and resource waste.
- Develop competitive advantages. Yes, I said advantages. Not just one. You should have at least three.
- Market and promote your competitive advantages. Finally, use the results of the research. Marketing to you competitive advantages will differentiate your business and will help your brand development.
–J. Nolfo helps companies understand their market and customers though a variety of market research strategies. He has over ten years of experience of market research for strategic planning purposes. He is the Director of Research at Rhino Market Research. He shares his thoughts about market research and business concepts with his blog “Pensare…Understanding Market Research in Business“. If you would like to discuss this blog or how J. can help you understand your market and customer needs, email him at email@example.com.