Posts Tagged ‘ReferenceUSA’

Assessing Your Competitive Edge

August 3, 2010

While the two things no person can ever escape are death and taxes, a business owner has a third thing he/she can’t escape: competition. Keeping a close eye on your competition and assessing your strengths and weaknesses with respect to it should not only be part of your business and marketing plans, but also part of an ongoing process for continuous improvement. Today, we will discuss how you can monitor your competition thoroughly and seamlessly.

Identify Sellers of Products Similar to Yours

Let’s assume you own a children’s toy store. Who else sells toys in your area? The Yellow Pages can give you a listing of many other toy retailers. You might even obtain a list of other toy retailers through local Chambers of Commerce, industry trade associations, and the like. But toys can be purchased in several places outside of toy stores. Depending on the type of toys you sell, you’re also competing with mass merchants like Wal-Mart and Target, department stores, supermarkets, and catalog retailers. You first have to know your product, and who it is aimed at, in order to determine your relevant competition.

Determine the Factors Driving Customer Perception

When buying toys like the ones you’re selling, what do customers look for? What factors influence their decision? Certainly the features of your product; but also the retail price, quality, perceived value, novelty (especially for toys!), convenience, and the customer’s experience at your store, and the store’s location, hours, and credit policy, to name several.

Next, you need to determine how much weight to assign each factor in terms of its importance to the customer. After all, you could have the longest store hours of any toy store in town, but what good is that if store hours is of little importance to your customers?

You can estimate the weight of each factor by interviewing members of your target market, conducting surveys, mystery shopping your competition (to see if there’s a pattern of factors they seem to be emphasizing in their sales pitches), and looking at past customer complaints and inquiries.

Determine the Factors Driving Operational Advantages

Many companies may sell the same product or service, but rarely do they operate the same way. Most businesses have more financial resources, use different marketing tactics, or distribute their products differently than others. Much like customer perception factors, you need to compare these different operational factors between your business and your competitors. You also need to weight these factors.

Collect the Data

Mystery shop your competition. Visit their Web sites. Visit their stores (or have your spouse, children, siblings, or friends do so), and compare their customer service, the quality of their merchandise, etc. Ask casual questions that can elicit clues about the competition. Read up on any news about your competition. Check to see if they are located in Dun & Bradstreet’s Million Dollar Database, or in ReferenceUSA. These sources can provide information about the competition’s sales volume, square footage (sometimes), and employee counts.

Talk to their customers (discreetly, casually, and unstructured, of course!); and if you and your competition sell several of the same toys, suppliers can provide valuable information about your competition. Populate your weighted factors with the data you’re learning about each competitor for each of those factors.

Compare and Contrast

Where are you strong with respect to your competition? Where are you weak? Sometimes, your strongest areas can offset your weakest ones. For example, price may be an important factor in the sale of your toys. Maybe you can’t beat your main competitor on price. But your store might offer easier credit terms, a layaway plan, or better customer service. Perhaps you specialize in getting certain toys on your shelves before the rest of the toy stores in town do. Your strengths are your selling points.

Never Stop Watching Your Competition or Your Industry

Now that you know where you stack up against your competition, you must keep checking it regularly. Business is dynamic and nothing stays the same. Set a time frame to re-evaluating your business with respect to the competition. Will you do it monthly? Quarterly? Annually? It depends on the nature of your industry. The frequency you choose is generally not as important as the consistency in which you do your evaluations. Also, keep monitoring changes in your industry. New regulations on the sale of toys, shortages in manufacturing supplies, and tariffs on imported toys can easily and drastically alter your competitive position.

In summary, assessing your competition is not something you do just one time for your business plan; you need to monitor your competition on a consistent basis. Consistent competitive intelligence keeps your business nimble, gives you ideas for improvement, keeps you abreast of changes in your industry, and most of all, keeps you focused on your customers.

Analysights Can Make Competitor Intelligence a Snap!

Monitoring you competition – whether it’s for your business plan – or for ongoing purposes can be a daunting task. If you need to better understand your competition but have no idea where to begin, or if you need to set up a system for ongoing competitor intelligence, call Analysights. We can help you design a competitor monitoring system that is both thorough and easy to maintain. For more information, visit www.analysights.com or call us at (847) 895-2565.

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When NOT to do Marketing Research

October 2, 2009

Marketing research is an important part of a company’s decision making process.  However, there are times to do marketing research and times not to.  When marketing research keeps you on top of the markets in which your company operates; helps you achieve a strategic marketing advantage; enables you to select the course of action that achieves your key marketing objectives; or clarifies problems or investigates marketplace trends that affect your marketing goals, you should, by all means, conduct it.

However, there are certain times when you should NOT conduct marketing research.  First and foremost, you should not do marketing research if you have not first defined the problem you need to solve.  Problem definition is the single most important step in the marketing research process.  If not done – or done correctly – any research performed will be useless.  Granted, sometimes companies have no idea what the marketing problem is, so they must then do exploratory research, to help them identify the problem.  In that instance, there is a business problem, and that is to determine what is causing the company’s current marketing situation.

You probably also don’t need marketing research if:

You have access to readily available marketing information     

Your sales force may know its territories very well and each sales representative may understand the environment in which he or she calls on.  They may know the price of the competition’s products in those markets, as well as the relevant competitors there, and how much it costs to acquire customers there.  In addition, the Internet has made all kinds of marketing information freely available, and data sources like Dun & Bradstreet’s Million Dollar Database or ABI’s ReferenceUSA  has made finding information about prospective competition and customers a snap.  As a result, secondary research may be all you need to do to find the solutions to your marketing problems.

There’s not enough time or resources to conduct marketing research

If time is an issue, conducting elaborate marketing research will do no good.  Sometimes a situation arises where a decision must be made quickly.  In such a case, you might be better off convening the company’s business experts for an urgent discussion of the situation, alternative courses of action, and the selection of the course to take.  In other instances, you may lack the financial resources, or the internal staff for proper marketing research.  In these cases, you may also rely on the business experts and the secondary research already available to you.

The research adds little or no value

If the decision you want marketing research to help you make has little impact on sales, profit, market share, customer loyalty, brand equity, or any other marketing performance indicator, then it makes no sense to do marketing research.  Marketing research can be costly both in terms of time and money, so if the benefit of the research doesn’t at least pay for itself in the dollars and manpower expended to conduct it, it’s worthless.  You also need to consider the opportunity costs of that research.  If you do research on a problem whose solution adds little value, the time and money could have been better used to research a different problem with a bigger payoff, and that opportunity is lost.

Knowing when you need to do marketing research 

Develop an internal monitoring system of your marketing environment.  If you have a system in place to compile information about your company and your competition, it will alert top management to problems that marketing research can attack.  These days, you can set up e-mail alerts with Google and many major newspapers to keep you informed of any news or blog posts about your company, your competition, and your industry.   Also read your industry’s trade publications and get out to trade shows and conferences.  Talk to your sales force, your suppliers, and your customers.  You can get a wealth of information for free from these sources.

Knowing when not to do marketing research is just as important as knowing when to do it.  When marketing research adds significant value or improves your competitive position, it’s a go; when marketing research is just “nice to know,” it’s a no!