"Know your enemy as much as you know yourself, and you needn't fear the result of a hundred battles" Sun Tzu
Launching a new product or selling an existing one is like stepping into a battlefield. You've to constantly fight for your audience's attention.
If your marketing efforts slip even a little, your competitors are going to use that opportunity to get ahead of you.
So, if you're wondering how
Newbies take on industry leaders
Companies lose customers and suffer losses
The answer is that their competitors know who they're dealing with and have created strategies to stake them out.
Bottom line: If you're stepping into a battlefield you must know who you're going against. Likewise, if you're selling a product, you must know who'll try to stop you from growing.
In this ebook, you'll learn about the different types of competitors and the strategies you can use to get ahead of them.
5 Different Types of Competitors that'll snatch away your customers
There are 5 different kinds of Competitors that you must be on the lookout for
- Direct Competitors
- Indirect Competitors
- Replacement Competitors
- Potential Competitors
- Future Competitors
#1 Direct Competitors
Direct Competitors offer the same product as you do. Their customer base is the same as yours. They even sell their products in the same places that you do.
The competition is mainly based on offering customers something more lucrative than other competitors to sway customers towards them.
For example, Airtel's direct competitors are Jio and Vodafone since they're also targeting customers in the same age range and location.
All of these telecom companies aim is to provide cost-efficient telecom services for their customers. This includes high-speed internet and unlimited calls for a reasonable price.
So, direct competitors offer the same product at competitive prices in the same target market as yours.
#2 Indirect Competitors
Indirect competitors are the ones who target your customer base but don't offer the same product as you do.
Let's take McDonald's as an example to illustrate what indirect competitors are.
It's a fast-food joint that mostly sells burgers and fries. Their target audience encompasses individuals of all ages.
Burger King is its closest direct competitor as it offers burgers too. Their target audience is the same as McDonald's.
Dominoes Pizza and KFC are McDonald's indirect competitors. Domino's sells Pizza while KFC sells fried chicken.
Their products are different from that of McDonald's but they are all options for satisfying hunger. Therefore, they offer indirect competition to McDonald's.
#3 Replacement Competitors
A replacement competitor offers a completely different product that can replace your product altogether.
These competitors usually come up with a more cost-efficient and quicker solution to solve your customers' problems.
This is how DVD rentals got wiped out of businesses. Streaming services like Netflix took over and offered their audience on-demand entertainment without late fees.
If you think about it now, it makes no sense to go to a DVD rental when you've unlimited options that are only a click away.
Another example is that of digital cameras. Mobile Phones outdid digital cameras with better image processing and quality.
It's almost always impossible to keep on the lookout for these competitors because their products are completely different and not something you can anticipate.
#4 Potential Competitors
This could be an indirect or replacement competitor who hasn't stepped into your market yet.
Let's say that you've started selling organic home-made lipstick with unique ingredients.
Although Indian brands like Lakmé have organic makeup products, let's assume for the sake of the example that they don't.
Let's assume that Lakmé is planning to launch organic lipsticks to test the waters. In this case, Lakmé becomes your potential competitor.
#5 Future Competitors
These competitors are similar to potential competitors. But they'll end up grabbing a huge chunk of your customers as soon as they enter the market.
In the above example, if you determine that Lakmé can grab your customer base quickly, then they'll be your potential and future competitors.
Now that you know the different kinds of all the competitors, here's how you can identify indirect and direct competition.
3 Ways to identify Direct Competition and keep them on their toes.
Direct Competitors offer the same products as you do as mentioned earlier. Here are 3 ways to identify them.
#1 Conduct Market Research
Interview customers, industry leaders, experts, etc. and see which names pop up often during the interviews. Even if you can't interview industry leaders and experts, don't forget to interview your customers.
Ask them why they choose your product and whose product they used previously.
You can also go one step further and create surveys that your competitors' customers fill out.
You can ask them about how complaints were handled and how satisfied with their competitors' service.
Talk to your sales teams and ask them whose names pop up frequently during the process. You can also gather information about your direct competitors by attending industry conferences and events.
#2 Gather Customer Feedback
We're emphasising on gathering feedback from your customers again because it gives you important insights into your direct competitors'.
You can create a survey that asks customers which other products they considered before buying your products. If they're already your loyal customer, ask them what makes them choose you over other competitors.
This way, you'll be able to understand what your customers need in a better way and build a better product for them in the future.
#3 Keep a lookout on Social Media and Forums
Social Media groups and question-answer forums like Quora will give you a good idea of who your direct competitors are.
Additional sources of information include industry reports and studies and comprehensive surveys conducted by governments.
In the next section, you'll discover how to identify indirect competitors.
#3 Ways to identify Indirect Competitors and Future-Proof your Success
We already saw that assessing Indirect competitors is important because they can pose problems as would future competitors or replacement competitors.
#1 Keyword Research
Most businesses are online these days. They're all competing for space on the 1st page of the Google Search Engine Results Page (SERP) ranking.
A direct search will give you a good idea of the businesses ranking for the keywords you're targeting.
Using paid tools will also help you assess both direct and indirect competitors.
#2 Keep an eye on Paid Search Results
This is probably the easiest way to identify both direct and indirect competitors.
Check out the competition for the keywords you're bidding on. If there are plenty of competition use paid tools to see who's competing for the 1st Ad Spot on Google.
This will give you a good idea of who your indirect competitors are and what they do.
#3 Look for Similar Solutions
Let's assume that you're selling toothpaste.
Your customers' goal is to have pearly white teeth.
They can either get this through your toothpaste, by using a toothbrush or whitening kits.
So, if you simply Google clean teeth, you get results for teeth whitening kits and blog posts on how to adopt a healthy cleaning regimen.
There are also results for tooth brushing and tooth whitening on the sides. So, the names of companies that pop up when you click on these search results are also your competition.
So, there you go.
You've successfully learnt the kinds of competition you'd face and how to identify them.
Here's a summary of this ebook
There are 5 kinds of competitors
Replacement, Potential, and Future competitors often evolve into an indirect competition.
There are different ways to identify competitors online
- Talk to your customers and your competitor's customers.
- Attend events and conferences where you can meet employees from similar industries.
- Go through Social Media Posts in your category.
- Conduct Keyword Research.
- Monitor Paid Search Results.
- Research Similar Solutions.
Now, you've two choices.
You can either waste time going through over-priced tutorials and poring through books to find out how to craft a marketing strategy that'll WIN more customers...
... Or you can contact Pigtail Pundits today to grow your business right away.
We've been crafting marketing strategies for 100s of businesses of all sizes for 23 years now.
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