A speedy downfall for many organisations is competition. Even though your business or brand may be offering an incredible product, if the competition does it better then your product may die out. Knowing who your competitors are, in addition to having an understanding of how you compare with them in the consumer’s eye, is a vital part of creating a great digital marketing campaign.
How to know what your competitors are doing
An easy way to know what your competition is doing is by researching it. Various market research solutions can offer you the information you require order to stand out, be different as well as be better.
Having an understanding of both your direct as well as indirect competition will determine if your business model can remain at, or claim, the top spot in your market. Alternatively, understanding your competition well will allow you to make a decision about whether or not anything in your company must be altered to do so. Evaluate the market to identify both key players as well as those who are on the rise.
When ruminating about your current as well as potential competition, a quick way to answer the basic questions is to refer back to Porter’s 5 Forces Model which is a concept that is discussed in almost all marketing business classes.
- Threat of new entrants
- Threat of substitute products or services
- Bargaining power of customers
- Bargaining power of suppliers
- Supplier power
- Competitive rivalry
Threat Of New Entrants
Your market position can be influenced by people’s ability to enter into your market. So, think about how simple this could be done. How straightforward is it to get a grip in your industry or market? How much would it cost and, in addition, how tightly is your sector controlled?
Threat of Substitute Products or Services
This refers to the probability of your customers discovering a different way of doing what you do. For example, if you sell a unique software product that automates a vital process, people may replace it by doing the process manually or, alternatively, by outsourcing it. A substitution that is easy as well as cheap to make may weaken your position as well as threaten your profitability.
Bargaining Power of Customers
Here, ask yourself how easy it is for buyers to push your prices down. What are the numbers of buyers are there and, in addition, how big are their orders? What it would cost them to switch from your products and services to those of your rivals? Are your buyers strong enough in order to dictate terms to you? When you deal with only a number of savvy customers, they have more power. However, your power increases if you have many customers.
Bargaining Power of Suppliers
This is decided by how easy it is for your suppliers to raise their prices. How many potential suppliers do you have? How unique is the product or service which they provide? How costly would it be to move from one supplier to another?
The more choices that you have, the easier it will be to move to a cheaper option. However, the fewer suppliers there are, as well as the more that you need their help, the stronger their position as well as their ability to charge you more. This can impact your profit.
This aspect looks at the number as well as the power of your competitors. How many rivals do you have? Who are they as well as how does the quality of their products and services compare with the ones that you offer?
Where rivalry is fierce, it is possible for companies to attract customers with an aggressive price cut in addition to high-impact digital marketing campaigns. In addition, in markets with lots of rivals, your suppliers as well as buyers can look somewhere else if they feel that they’re not getting their money’s worth from you.
Performing proper customer research is essential in any well-thought-out digital marketing campaign.
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