Tips for understanding your market place
Whatever your brand, it is important to know and understand your competition so that you can make sure you stay one step ahead of them.
There are 2 types of competitors:
- Direct Competitors
- Indirect Competitors
Direct competitors are products similar or identical to your own – you are probably pretty clued up about these already.
Indirect competitors are a little trickier – these are the products that fulfil the same consumer need – but they may not necessarily be on the same shelf in store; you might need to do a bit more research to find them all. For example, an after-school snack for children could be a cereal bar, a bag of fruit or a piece of cake. A quick lunch could be a soup, a wrap or a pot noodle.
Think like your consumers…
It is important to define all your competitors, including the indirect ones. Not only will your consumers be grouping products this way in their minds, but store owners and retail buyers will also be considering your product in terms of consumer needs (read more on understanding your consumers here).
Tip 1: Find out when and why people are consuming your product as there may be many different usage occasions – this will help you identify your indirect competitors. This can be done at little or no cost by talking to your consumers (at fairs, markets, on social media, in research groups).
Put yourself in the picture…
Once you’ve identified your competition, you’ll need to check:
- where they are selling
- how much they are selling for
- how they are performing
Where they are selling will help you with your best route to market – is your product right for delis and farm shops? Is it more suitable for regional stores? Or will your product sit comfortably on shelf in the big supermarkets such as Waitrose, Sainsbury’s and Tesco?
How much they are selling for will help with your own pricing strategy. It is important to understand the range of prices you’re up against, so that you do not price yourself out of the market. But it is just as important not to devalue your product by pricing it too low.
Where your pricing sits may also help you determine which retailers to target.
How competitor products are performing in store is valuable information and can help with the business case you’d need to get your product listed in store. You can buy data from the likes of www.datamonitor.com but more cost effectively, ask to speak to the grocery or store manager – you never know they may just tell you!
Tip 2 : Visiting stores is a really important part of your research – you will not only see who is selling what where, but their positioning on shelf and how much space they have (known as ‘facings’) will give you a hint about how well they are selling too.
Without doubt, being armed with all of this knowledge will help when you are trying to get your product into store. Farm shops, deli owners and retail buyers will certainly expect you to know your market.
Wondering where to start?
Look out for the feast of resources we’ll be providing to members when Relish launches in March 2012, including practical ways to identify all your competitors, tips that you can apply to your business to stay ahead of the competition, guest speakers and a whole host of other ideas on getting to know your market place.
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