Competitor Analysis Guide

Competitor analysis is an essential component of market research. It's essential for better understanding your niche. It helps you learn about other offerings on the market, compare them with yours, analyze the pros and cons of your competitors, and improve your product.

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Competitor analysis consists of the following steps:

1. Find competitors;
2. Collect basic information about them;
3. Analyze their product;
4. Analyze their targeting;
5. Analyze the delivery of a competitor's product;
6. Make mystery purchases.

Let's look at each point in more detail.

Find competitors

First, you need to identify your competitors. This task is both simple and challenging. You could say that your competitor is someone who offers the same product or service as you. For example, kitchen appliance manufacturers, clothing stores, or cafes and restaurants. But there's a catch. Your competitors aren't just those who do similar things. You should have a common customer base. Clothing stores can cater to different audiences. Some make children's clothing, others make teen clothing, and still others make maternity wear. Some specialize in casual wear, while others specialize in formal wear. These stores won't be competitors because they cater to different needs, meaning customers are unlikely to choose between them.

Finding competitors is usually not difficult. The easiest way is to formulate your query the way your customer would theoretically formulate it and see who Google suggests. For example, "buy soy scented candles Kyiv" or "vegan restaurant Ivano-Frankivsk." The suggested options will likely be your competitors, although this isn't necessarily the case. It's worth visiting websites and making sure the products or services they offer are similar to yours.

Don't analyze too many competitors; this will only confuse and make your work less effective. The optimal number is three to five.

Gather basic information about competitors

It's important to understand how your competitor's business emerged and developed to understand your own competitive opportunities in terms of finances, size, and capabilities. It's worth learning:

• when the competitor's business was founded;
• presence of venture investors;
• number of employees;
• number of clients;
• companies acquired by a competitor, are there any at all and if so, which ones;
• income of a competitor's company.

Analyze a competitor's product

This stage isn't about emulating other businesses or copying their ideas. However, it's important to understand what your competitors are offering and how customers react to them, so you can discern what to avoid and what, conversely, people like.

Here it is worth paying attention to:

• Features of competitor's products.It's worth trying it out for yourself and compiling a list of what needs the product meets. Then it will be easier to identify any unmet consumer needs and address them.
• The price of the product.It would also be good to pay attention to the availability of discounts.
•  Customer reviews.It's not that simple, because reviews aren't always written sincerely. Keep in mindcrowd marketingTo get the most honest ratings, pay attention to 2-4 star reviews, as 5-star reviews may be part of a marketing campaign, and 1-star reviews are often written with emotion and therefore exaggerated. Be skeptical of comments, but don't neglect this step.

Analyze competitor targeting

Learn how your competitor's company positions itself. What they emphasize in their advertising, and how they want to be perceived. Based on this information, it's easier to understand how to position yourself tostand outand evoke the client's sympathy.

This information can be taken from the first page of the competitor's website and from their advertising campaign.

Analyze the delivery of a competitor's product

Companies often have relatively simple product distribution systems, especially if they offer digital products or services and work directly with consumers. In such cases, distribution channels are limited to the company's website and retail stores, often including delivery options.

Make mystery purchases

There's no better way to analyze and evaluate a competitor's product than to become their customer. Follow the entire customer journey, from landing on the website or in the store to making a purchase. If you encounter any difficulties or inconveniences along the way, remember them, write them down, and consider what caused them and how to avoid them.

Pay attention to whether they offered you additional products or discounts. If so, how exactly. Evaluate their sales tactics: what worked, and what was inconvenient or annoying.

Customer service is a crucial factor. Whether it's on-site support or in-store consultants, how do competitors treat customers? Are they polite and thorough in answering questions? Do they encourage larger purchases? It's a good idea to think through several possible scenarios for interacting with staff and observe how they handle different situations.

Analysis of the information received

With all the information at hand, it's time to organize, analyze, and implement it in your business. Of course, it's important to track your growth and, above all, strive to develop with an eye on yourself. But competitors' experience can also be a valuable resource, so don't neglect it. It's also important to remember that this type of analysis shouldn't be conducted just once, but regularly, although not necessarily frequently. Ideally, you should revisit your competitor analysis about once a year, as neither the market, nor offerings, nor customers remain constant.

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