A company can’t launch a product without determining if it’s a good fit and how successful it will be. Moreover, the company also has to understand the competitive advantage of the product they plan to launch.
A company must be well informed about its competitors’ products, marketing & sales strategies, and customer reviews.
In order to succeed in a saturated market, a company must gather insights using competitive product analysis. A product competitive analysis, when done properly, can help a product manager and the company deliver value to their customers instead of simply responding to competition.
In this blog, let’s explore why it’s important, what you should analyze, and how to use the insights for efficient product development.
Competitive product analysis is a part of market research. Product managers use this method to evaluate the competitors’ products to identify their strengths and weaknesses. The analysis helps you learn about the current demand for your product concept.
Learning about your competitor’s product and comparing it with your own can provide you with the insights you need to plan an efficient strategy to outperform the competition.
Conducting a competitor product analysis allows you to see how your competitors fulfill customers’ demands and needs. It gives you a clear perspective of how you can strategize a better approach than your competitors.
This ensures that instead of a reactive approach, you develop a stable and innovative strategy. Leverage the best market research software to gather competitive insights and customer perspectives.
Additional read: Everything you need to know about custom market research!!
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Most newly launched products fail because of the lack of proper competitive analysis. It affects the brand reputation and also impacts the revenue.
As a part of business strategy, product analysis enables you to benchmark your competition so that you can outperform your competitors and deliver value to your customers.
For a better understanding of the impact a competitive product analysis has on your business strategy, we have listed some advantages.
With the insights, you gather from competition analysis, you can learn what pain points the competitors’ products are helping customers resolve. When you gather insights from customers on competitors’ products, it helps you learn what your products should offer to help your target customers.
→ It can help you understand how unique your product is and what value it delivers to your customers.
→ With such insights, you can make informed decisions about future product concepts that optimize the customer experience.
Engaging with your customers and prospects can help you gather insights into the current market trends and how well your competitors meet those trends.
→ Performing competitive analysis allows you to learn about what new products or features are being discussed, thus enabling you to uncover new product opportunities.
→ It can also help you learn what’s missing in the market and the competitor’s product. As a result, you can add those missing aspects to your product and meet customers’ needs.
Gathering insights and using text analysis tools can help identify customers’ sentiments toward emerging trends. This way, you can determine how to meet customers’ needs and market trends.
With competitive product analysis, you can also identify the strengths and weaknesses of the competitive products and strategies. You can learn from their mistakes to create a better product.
→ Learning about what makes their product so well-loved and where they lack it can help you use it to your advantage.
→ Similarly, identifying where they fall short can create an opportunity for you to test unique and new strategies.
Additional read: How to segment the market for a new product in 5 steps.
In today’s fast-paced market, where trends are changing every day, it is best to conduct a competitive analysis every 2 months.
If you are unable to conduct competitive analysis, it is still important to gather customers’ insight on competition regularly.
In such cases, you don’t want to send a long survey every time you want insights. It’s better to send out pulse surveys or micro surveys using a customer experience tool that consists of 5 to 10 questions max.
This way, you can stay agile in this fast-moving market and stay on top of the trends.
Read how Voxco helped Stratégir conduct product testing with Voxco multi-mode
When a company conducts competitive product analysis regularly, they are more likely to have successful product launches, win over customers, and deliver value.
It can help them clearly see where they lack, where they excel, and where the opportunities lie.
To conduct a thorough product competitive analysis, you need to identify who you are competing with. So start by dividing your competitors into categories of direct and indirect competition.
Direct competitors should include businesses with similar offerings that also target the same geographical area as yours.
Indirect competitors include businesses that cater to the same audience but not with similar products. Their products, though not the same as yours, can help customers solve their problems.
In your strategy to conduct competitive analysis, you should also look into indirect competitors. This way, you can keep track of any shift in the market. That is, even if your indirect competitors are not offering the same products as yours, they might just do it one day.
Constantly scoping out your direct and indirect competitors can help you discover what markets you can expand to while tracking potential changes in your target market.
There are multiple brands offering the same products. For example, you can name three big brands offering sportswear. However, each of these brands has something unique to offer.
Analyzing competitors’ products in detail will help you identify their USPs and determine what yours should be. Use competitive product analysis to learn about the features, designs, and other intricate details of competitive products.
While you won’t replicate their products’ every single aspect, the knowledge will help you identify what feature makes the product famous among the customers. It will also allow you to learn how the competitors are utilizing the features to make their products stand out.
There are various factors influencing the success of a product, marketing being one of those. Analyze how your competitors have been marketing their products to drive the demand for their products.
→ Do they post videos?
→ Do they write articles about it?
→ Are they marketing it in podcasts?
→ Are there any press releases?
→ What offline methods are they using to run marketing campaigns?
Use survey software to conduct polls or surveys to determine which marketing channels or ideas your customers like. This will give you an idea of which platforms or channels your customers use the most and would prefer to receive your marketing campaigns.
How does your competitors’ target audience respond to their products and marketing? Learn about the positive, negative, or mixed sentiment of their target audience to understand which marketing tactics are working.
You can also analyze competitors’ marketing campaigns by asking your customers to share their thoughts on them. This will allow you to identify what your customers prefer and what attracts them the most.
The best way to gather knowledge about your competitors is to engage with their customers. Gather firsthand data from their current customers to understand what value the competitor and its products offer that made customers choose them.
You can learn directly from the customers the strengths and USPs of your competitors that make them well-loved among customers. Using product survey insights, you can identify where you lack and what more you can offer.
Use robust product experience software to reach your audience globally in their preferred channel. Leverage online survey tools, CATI surveys, and offline survey tools to conduct surveys in real time.
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Leverage competitive product analysis to understand the direction their products and company are heading. Have they made any updates to the product? Are they launching new categories?
Gather insights on such to understand whether your competitors are expanding their market.
Also, keep tracking customer and prospect feedback to stay relevant to what’s happening in the market. Is there a surge in demand for a new product? What new products, features, or applications are trending among the customers?
Monitoring the market and your competitors will help you determine which direction you want to move forward and for which demand you want to invest. This will help you develop a value-oriented strategy that also exceeds customer expectations.
Learning about your competitors’ sales tactics can help you learn why your customers maybe consider your competitors over you. You can uncover how competitors are using their sales strategy to attract new customers and retain old customers.
Whether you’re a B2B or B2C company, this type of analysis will help you understand how competitive the sales process in the market is.
Don’t limit your analysis to competitors’ sales tactics; also, learn what customers consider during their buying process. Gather insights from them to identify the factors that influence their purchase. Learn what made them consider switching brands.
Having information on what sales tactics your competitors use and what influences customers’ buying decisions will give you an idea of what your sales tactics should involve and how you need to prepare your sales reps.
Is your pricing plan attractive enough to target customers of all categories? Pricing is one vital factor influencing customers buying decisions.
When conducting competitive product analysis, you should gather data on your competitors’ pricing plans for a similar product. You need to pay regular attention to the industry standard pricing to ensure that the way you are pricing your product is reasonable for the customers.
You may want to charge more if you believe your product offers superior features than your competitors. Or, you may charge less if you want to appeal to customers who don’t want to pay a lot for high-quality products. In any case, you’ll want to ensure that your sales agents explain the reason behind the pricing to your prospects.
Make sure to include a SWOT analysis in your strategy to perform competitor product analysis. Simply put, identify the strengths, weaknesses, opportunities, and threats of your competitor’s business strategy.
Learning about these four factors can help you analyze your brand and its strategies with a clear vision. You can uncover your strengths, weakness, opportunities, and threats when you know more about the competition. This way, you can develop an efficient strategy and position your brand better.
What did your competitor do that led to a product launch failure? Why did they lose customers?
In a competitive market, you can avoid some bad bets by learning about the misadventures of your competitors. Instead of multiple trials and errors and losing revenue, you can use the competitors’ experience to identify wiser strategies.
These 10 tips conclude our advice on utilizing competitive analysis for successful product development and launch. However, let’s also check out how you can use competitive insights for product development.
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Competitive product analysis can help you understand how competitive the landscape is in which your product operates. It helps you ensure you don’t lose market share or fall behind your competitors in a similar niche/ industry.
When you perform product analysis, you must uncover the differentiators and the unexplored opportunities. Here are some ways you can use a competitive analysis in product development:
Your differentiators are your biggest selling points. It helps you stand out from the market and gives your customers a unique story about your product.
Use product competitive analysis to pinpoint areas where your product differs from your competitor’s products. Use the insight and focus on highlighting these differences in your business strategies.
Look for gaps in your competitor’s products and the market. This way, you can compare your product and identify areas of improvement and innovation to help your company get ahead of the competition.
Take note of areas where your product may be lacking compared to your competitors. And where your competitors’ products may not be meeting customer needs.
Utilize this gap to innovate products that meet market needs and drive customer demands.
Assess the pricing strategies of your competitors and analyze how your pricing should compare to theirs to be competitive in the market.
See what kind of perks your competitors offer at what price. Use the competitive analysis to align your products and their perks with a price range.
Should you charge more for additional benefits? Or should you aim to make it affordable?
If you are uncertain about your pricing model, ask your customers how much they are willing to pay for your product. Send a pricing survey using market research software to gather customer opinions on various price ranges.
The last step is to use all the insights and draw a competitive strategy for your marketing, sales, and product team.
As a product manager, you should use the insight to make an informed decision about your product development efforts. However, you should also share the insights with marketing and sales teams to differentiate your business efforts from the competition.
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Competitive product analysis is the key to breakthrough a competitive market. By identifying your competitors’ strengths, differentiators, weaknesses, and opportunities, you can develop a better product and dominate the market.
You can learn about current trends and market gaps by scooping out the competition and keeping tabs regularly, you can learn about the current trends and market gaps. This way, you can use the right insights to capitalize on the opportunities and a competitive edge.
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