A rational decision in business can take you to the highest peaks of victory. Understanding your competition’s power and users’ needs are two essential ingredients to make a winning digital product. This is why companies use market research competitive analysis to provide what customers demand in a better way than their competition. So, in today’s article, you will learn about market research competitive analysis, and why businesses need it. And most importantly, you will explore 5 brilliant ways to conduct market research and competitive analysis.
What is market research competitive analysis?
In simple words, market research is the process of finding users for your products or services. At the same time, competitive analysis allows your company to stay ahead of the competition.
When it comes to market research vs competitive analysis, both strategies are necessary for your company’s success.
Why a company needs market research competitive analysis?
Market research competitive analysis provides vital insights into the competitive landscape, enabling companies to better understand their position in the market. By examining it thoroughly, businesses can gain a competitive edge.
Market research competitive analysis helps companies in many ways, such as:
Better know-how of the market environment
Market research competitive analysis helps your company comprehend your market’s user preferences, competitors, and current trends. This enables you to make strategies to tackle the changing market dynamics.
Discovering market opportunities
Market research competitive analysis allows your organization to identify untapped growth opportunities. Through examining user preferences and needs, your business can customize digital products to meet special demands. Moreover, it lets your company know about your rival businesses in terms of their offering so you can find and fill the gaps your competitors are missing.
Reduction in risk
Both competitive analysis and market research are powerful tools to assess and mitigate risks. You can observe market shifts and understand your competitors’ strategies to make informed decisions and reduce uncertainties. Market research, as well as competitive analysis, gives you seers eyes to foresee rapidly changing technologies and user behavior.
Conducting market research competitive analysis makes your firm beat your competition by improving your product’s quality. It permits you to offer better services than your competition to your audience.
5 criteria to do the best market research competitive analysis
Effective market research competitive analysis requires evaluation of different factors to gather insights.
Here are the 5 essential ways to conduct effective market research competitive analysis.
Finding your competitors
The first step to competitive analysis market research is identifying your direct and indirect competition. Direct competition is a business that offers the same services or products. Contrarily, indirect competition is said to be those entities that may not be providing identical services or products but are handling customer requirements with the help of alternatives.
Once you have identified your direct and indirect competitors, the next thing to focus on is profiling. This means you have to perform an in-depth analysis of your competition’s strengths and weaknesses. To do that, you must do a market share assessment, which gives detailed information on how each competitor influences the market.
Some major profiling elements include analyzing your competitors’ main products, their target audience, and unique selling propositions. Knowing all these areas will help your business to create a robust product strategy.
Estimating market share
Assessing market share is essential, and the process consists of a quantitative estimation to understand the influence and size of each competitor in the desired market. By identifying the market share, your business will gain important insights about your competitive power in the industry. This vital information acts as a benchmark for evaluating your company’s overall standing compared to your competitors, permitting you to pick out growth opportunities and identify vulnerable areas within the market.
Moreover, at this stage, you must focus on understanding your product’s positioning by finding out how your competitors are presenting their solutions in the market. Since this analysis unveils the promises and unique characteristics your competitors utilize to differentiate themselves from others, it will provide your company with a roadmap to interpret the competitive environment.
Gauging the quality of services
One of the essential steps in market research competitive analysis is to figure out the quality of the features your competitors are already offering to customers. Likewise, you must assess the innovation level your competition utilizes to build their digital products. This involves evaluating whether competitors use advanced design and development standards to build solutions.
Upon finding out, think about how to provide better-quality digital products to your potential customers. For instance, if you are building a SaaS product for your target audience, use software development best practices to develop solutions. This will help you meet your customers’ expectations and demands. As a result, your product will have more user retention.
Collection of user feedback
Gathering and analyzing user feedback on your competitors helps you recognize the untapped areas, such as users’ pain points, likeness, dislikeness, and all other information about the product that is not in your competition’s focus.
Here’s one market analysis and competitive analysis example to understand this concept. Suppose you are building a financial application to manage funds. In that case, you can take surveys and conduct user interviews to discover what bothers them while using existing financial apps. It can be anything – from a bad user experience to poor back-end development.
Additionally, you can inquire about the features that users miss while interacting with existing platforms. This will enable you to include those particular traits in your product that will compel users to use your services.
Updating your market research competitive analysis
Many companies think that market research and competitive analysis is a one-time activity. However, in reality, it is a continuous and steady process that demands review and data collection regularly. Therefore, the final step is to administer and update your market research competitive analysis.
Look for any modifications in your competitors and market, such as acquisitions, mergers, new entrants, price changes, product launches, and more. At the same time, you must also appraise your progress and performance and amend actions and strategies as needed.
For accurate market research competitive analysis, you must know your competition and their impact on the market. Likewise, you must comprehend other businesses’ service quality and strive to build better solutions for your target market using advanced technologies and user feedback.
At Slash, we prioritize building state-of-the-art digital products after conducting in-depth market research and competitive analysis. Our team of designers and developers ensures adding traits to your software product that make you visible at the top of your competition. Contact us to let our tech squads build fantastic web and mobile apps according to your user demands.