Using Competitive Analysis to Find Success in Business
Marketing for a business is similar to marketing for any other product or service. A business needs a target audience to whom it will sell its products or services. Marketers seek out their target audiences in person, on the phone, in an interview, through a mailing campaign, or by other means. They are then able to evaluate the success of their marketing effort by the amount of business they receive or the number of sales. This also includes assessing how well their efforts promoted their business.
Small businesses tend to target certain age groups or demographic groups. For instance, a women’s apparel retailer directs its marketing efforts primarily at teenagers. On the other hand, a large and tall apparel store focuses its marketing efforts primarily on older men. Likewise, some large businesses market only to a certain age group; others may market to a mixed age group.
Marketing should focus on segments that are appropriate to that business’s target demographics. Different segments can be targeted based on geography, gender, ethnicity, or purchasing habits. Different segments may even differ by purchasing power, or income level. Marketers should make sure that the segments they choose are as similar as possible. This means that products and services offered by each segment should be as similar as possible.
One of the most important aspects of effective marketing is knowing what kinds of information to share with each target audience. Marketers should avoid choosing segments based on their demographics alone; instead, they should choose segments based on potential customers’ needs. For instance, if the target market is senior citizens, the business should target its marketing strategies based on the preferences of senior citizens.
Some business owners believe that a concentrated marketing message is more likely to reach the right audience. However, research has shown that segmentation can lead to more sales. By segmenting a target audience into more specific groups, the business has greater control over which segments of the target audience it can focus on most effectively. A business might create a micro-niche segment for itself and then target that micro-niche segment with different advertisements or promotional offers. On the other hand, if the business creates a macro-niche segment by targeting unrelated products or services, then more advertising may be necessary.
Businesses should also perform research in order to gain an understanding of their target markets. During marketing planning and execution, the business should identify which consumers or markets are likely to be profitable. This allows the business to target its advertising messages in a more efficient way. For instance, a restaurant that caters to senior citizens might perform research to determine what sorts of foods seniors frequent, and thus where the most advertising should be directed. The same approach can be used to target the target market of young mothers, or those with a college degree. By performing research, the business can tailor its campaigns to appeal specifically to the desired target market.
One of the key strategies of marketing is to identify and target the most competitive markets. In business terms, a competitive analysis is an effort to understand the most attractive places for a product or service. Doing this requires the business to look at everything from price, customer service, and policies and practices to determine who the target markets are. Businesses should conduct competitive analysis by going to competition and consumer association sites to observe how competitors advertise and by looking at local newspapers and magazines. Additionally, businesses should consider using databases such as zip code databases to find local competitors.
Other tools used in market research include market surveys on employees, customers, and potential customers. Businesses should compare consumer satisfaction trends with their goals and consider what aspects of their company may be lacking. While this analysis will take time and resources, it is an important part of the overall strategy. Knowing what consumers want will help a company make the changes necessary to become profitable and attract new customers and clients.