Knowing your competition is a critical step in the branding process. By understanding who your competitors are and how they are positioned in the market, you are better equipped to build a business (and a brand!) that sets you apart from them. The process of understanding your competitors involves answering three questions:
There are basically three primary types of competition: direct competitors, indirect competitors and substitutes.
Direct competitors are companies that offer the same products and services that you offer and target the same customer base. Indirect competitors are companies that offer products or services that are slightly different than yours but satisfy the same customer need or solve the same problem. Substitutes are companies that offer products or services that the consumer chooses to buy instead of your products or services.
It is also important to take into account actual as well as emerging competition in your industry (local, regional and global) as well as potential newcomers from other adjacent sectors.
Once you understand the types of competitors that you may face, the next step is to conduct market research to determine how each one of your competitors is positioned and what their strengths and weaknesses are. This information will help you to discover market opportunities that you can leverage to build your brand.
There are many ways of obtaining information about the competition. You can use a mix of research methods for best results. Typically all branding projects include an interview process with internal and external key audiences such as clients, employees, regulators, investors, press, opinion leaders, distributors, suppliers, etc. These interviews are a good source of information about your competitors. Here are some of the questions you may want to ask.
Who are your primary direct and indirect competitors?
How is each competitor positioned in the market?
What are their main strengths and weaknesses?
What and how do they communicate verbally and visually to the world?
Are there any clear opportunities or ‘open spaces’ to compete in the market?
In addition, spend some time looking at your competitors’ communications materials such as company websites, press releases, social media channels, videos and even visiting their retail stores. While doing this audit, you can gather information about what and how your competitors’ communicate, how they speak to different audiences, name their products and services and use visual elements such as typography, color and imagery. It's also a good idea to study how each competitor has structured its brand architecture or portfolio of brands — whether they use one brand, sub-brands or multiple independent brands.
With this information you will be in a better position to uncover the similarities and points of differentiation amongst your competition. You will have a comprehensive picture of the market landscape and, therefore, opportunities that exist within it.
Once you’ve taken the time to understand or "size up" the competition you are in a good position to see how your company can best leverage its strengths to compete in that market. The competitive analysis empowers you to uncover opportunities in the competitive environment and build a strong distinctive brand.
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