Product competitors compete on the same product within one class of products. Products from one class usually have different features, price and benefits but are meeting the same need. Other types of competitors, besides product competitors, are: brand competitors, generic competitors and total budget competitors. For example, in category (class) of refreshment soft drinks, product competitor would be bottled water, brand competitor would be Coca-Cola, generic competitor would be tap water and total budget competitor would be candy.
Product competition might be also understood as willingness to create product with the best design. An orthodox model of competition assumes that the main area of competing is to offer the lowest possible price, however nowadays unique design plays also big role in model of competition. Other aspects of competition which might impact product are: technology, supply source, type of organisation and/or delivered quality of product.
How to identify competitors?
Some of the most common ways to identify competitors include:
- Researching the competition: This involves researching the industry to identify who the other major players are and what market share they have. This can be done by looking at reports, industry publications, and speaking with people in the industry.
- Monitoring the competition: Once you have identified the competition, it is important to continually monitor them to see what changes they might make. This can be done by setting up alerts to track any changes they make, or simply by regularly visiting their websites.
- Analyzing the competition: This involves understanding the competitive landscape and analyzing the strengths and weaknesses of the other players. This can be done by looking at their pricing, product offerings, customer service, marketing strategies, and more.
By understanding competitors and their strategies, you will be better equipped to differentiate your product and create a competitive edge in the market. This in turn will help you to attract customers and establish your brand.
Example of Product competitors
Product competitors are companies that offer similar products or services to the same target market. Examples of product competitors include Apple and Samsung, who both produce smartphones and compete for the same customer base. Similarly, Nike and Adidas are both shoe companies that compete for the same customers. Knowing who your competitors are and understanding their strengths and weaknesses can help you to ensure that you have a competitive edge in the marketplace.
Formula for assessment of product competitors
where Competitor is the total competition in the market, MarketSharei is the market share of each competitor, Strengthsi is the strengths of each competitor, and Weaknessesi is the weaknesses of each competitor.
Analyzing product competitors
It is worth to analyze product competitors at any stage, but especially before developing new product or improving one that already exist. In the analysis, the competitor might be immediate or potencial. After analyzing competitors, evaluation of their abilities should be done. There are four levels within which competitors might be evaluated. First two are strongly connected to the product and the last two treat competition more widely:
- product form competition - it is the most specific analysis, for example specific features of build-in dishwasher,
- product category competition - it is analysis of products of the same class, for example all type of dishwashers (portable dishwashers, countertop dishwashers, special dishwashers and other),
- generic competition - include substituable product categories, for example plateware or handwashing (all substitutes which are developed to meet need of washing dishes),
- budget competition - it is the broadest view and includes all products and services from the competiror side, examples will be here all products that customer might buy for the same amount of money that dishwasher costs (televisions, refrigerators, furnitures, clotes washers, clothes dryers, stoves). It might be important due to fact that sometimes if customer decides to buy several products from one retailer, he can pay less (for example for buying stove and dishwasher at once).
Types of Product competitors
- Direct competitors: Direct competitors are companies that offer similar products or services to the same target market. For example, if your company sells home cleaning products, your direct competitors might be companies that also sell home cleaning products.
- Indirect competitors: Indirect competitors are companies that offer similar products or services to a different target market. For example, if your company sells home cleaning products, your indirect competitors might be companies that sell janitorial services or cleaning services.
- Substitute competitors: Substitute competitors are companies that offer different products or services that could potentially fulfill the same need. For example, if your company sells home cleaning products, your substitute competitors might be companies that offer cleaning services or do-it-yourself cleaning kits.
By understanding the different types of competitors and their strategies, you will be better equipped to create a competitive edge in the market. This will help you to attract customers, increase market share, and gain a greater share of the total revenue.
Advantages of Product competitors
Product competitors can provide a number of advantages for a company.
- Increased brand awareness: Knowing who your competitors are and understanding their strategies can help you to identify opportunities to differentiate your product and increase your brand awareness.
- Improved customer service: Understanding the strengths and weaknesses of the competition can help you to improve your own customer service and provide a better experience for your customers.
- Increased market share: By understanding the competitive landscape, you can identify areas where you can increase your market share and gain an advantage over the competition.
Competitor analysis is an important part of understanding the market and creating a competitive edge. By identifying and analyzing your competitors, you can create a strategy to differentiate your product and gain a competitive advantage.
Limitations of Product competitors
Despite product competitors being an essential part of understanding the competitive landscape, there are some limitations to consider. Firstly, product competitors do not take into account other factors such as industry trends and customer preferences which can have an effect on the success of a product. Additionally, product competitors do not always provide a full picture of the competition as they do not take into account the other aspects of the business such as marketing, customer service, and pricing. Finally, product competitors can be difficult to identify and monitor, as they are constantly changing and adapting to the market.
- Creating a competitive matrix: This involves creating a table or chart that compares the features and benefits of your product with those of your competitors. This is an effective way to compare the relative strengths and weaknesses of each product, and can be used to identify areas for improvement or areas of differentiation.
- Analyzing customer feedback: This involves looking at customer reviews and feedback on the products and services of your competitors. This can provide valuable insights into what customers are looking for, what they like and don’t like, and can help you to adjust your own product and service offerings.
- Gathering industry insights: This involves researching the industry to learn more about trends, customer preferences, and other factors that could influence the competitive landscape. This can help you to anticipate changes and adjust your product offering accordingly.
By taking a comprehensive approach to understanding product competitors, you can ensure that you are well-equipped to compete in the market and create a competitive edge. This in turn will help you to attract customers, retain customers, and establish your brand.
- Ferrell O. C., Hartline M. (2007), p.100
- Dowdle N. W., Gillespie J., Maher I. (2013), p.27-28
- Kahn K. B. (2015), p.146-147
|Product competitors — recommended articles
|Level of competition — Potential market — Competitor — Gap in the market — Market development — Competitive position — Strategic position — Map of strategic groups — Pricing strategy
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Author: Bartłomiej Zegarliński