Check out the Competition

Your initial market research should have given you a picture of the customers your business is going to target.

You should be able to write a profile of your typical customer: e.g. age, where they are, what and when they buy etc. This is critical to your success because unless you can identify them you cannot reach them.

To complete the picture of the market you need to research the competition. Your competition can come in different forms. It could be local, national or increasingly international. Competition may be direct - someone who provides the same, or very similar products or services. Indirect competition may also exist – someone who provides something different but which may take potential spending power from your customers. In recessionary times you may be more open to indirect competition as customers try to manage with less.

In order to fully understand your competition you must know the following:

  • What are the alternatives to your product/service?
  • Who makes/sells these alternatives?
  • What’s their product range?
  • What choices do they offer and at what prices?
  • What are they good at? What are they not good at?

Get copies of their printed material, brochures leaflets, catalogues, advertisements. Check out their websites. Ask people, including customers, about them. Visit their premises if appropriate (shop etc.) Visit at different times and different days. Know what they sell and for how much. How do their staff treat customers? How are their premises laid out/kept?

Think about what you can do to compete. Remember not all buying decisions are made on price. People buy because of quality, customer service, ease of purchase, reputation, after sales service, availability of supply, reliability of service.

The key to beating the competition is to understand your customer and why they buy (or don’t buy) from you. You can use the information to prepare what is called a SWOT analysis of your business. (S= strengths, W= weaknesses, O= Opportunities, T = threats). Some examples of these are:

  1. Strengths: Your location, Quality, Service versus the competition
  2. Weaknesses: Too much competition, Location, Lack of finance to gain market share
  3. Opportunities: Improve service by taking on activities not done by competition, different product offering than competitors
  4. Threats: Price competition, ability of competition to replicate service offering

The results of your market research will allow you estimate your likely orders. You can start putting figures on your idea and its potential to create sales for the first time.

LEO Galway runs workshops on marketing your business - for details on upcoming training sessions, click HERE