Recognizing and usurping your competition's place in the market isn't always easy, however, if you devise a plan you can.
Other businesses that represent your competition can be generalized in three ways:
- Direct competitors
- Indirect competitors
- The apathetic group
For the sake of offering examples in this article we are using a fictitious company that sells a fairly common product – a diet/weight loss product.
So, you are marketing your product – a natural substance in tablet or pill form that boosts metabolism and helps with weight loss.
First you need to establish who your direct competitors are. These are the ones that fit into category #1. The most obvious competition you would be facing comes from other companies marketing a natural substance in tablet or pill form that boosts metabolism and helps with weight loss. Research will reveal that there are plenty of companies like this, with pretty much the same product as your own. But, there are also natural diet/weight loss products like patches and shakes on the market. These are also classified as your direct competitors. Look at it this way, these other companies sell a natural product that claims to do what yours does in the same or a similar way.
Now that you've identified your #1 category competitors, let's look at the #2 category, indirect competitors. In this instance you would classify diet programs and clinics as class #2 competitors. But there is also acupuncture, hypnosis, and physical exercise classes to consider, along with a plethora of other related products or service. It's a case of seek and ye shall find, and you'll probably find more than you'd bargained for.
Your indirect competition offers a different product from your own, but one which claims to deliver the same results – in this case, that of weight loss. Think in terms of what your prospective client could opt to buy in place of your product.
But what about the apathetic group of competitors? In truth this group is actually made up of prospective clients and isn't technically a commercial threat. It works more subtly than that. And the worst thing is that you have a large number of apathetic prospects. They are the people who could use or even be seen to need your product, but they don't do anything about it. Even though they could benefit from buying your natural weight loss pills, they don't bother. These guys are harder to combat than any businesses in categories #1 and #2.