Every company needs to know who they are, where they fit into the market, and where they’re going. Only 33% of businesses make it past their tenth year after starting out, while only 66% survive their first two years.
What does it thus take to locate the ideal market opportunities and create a development plan that gets you where you want to go?
What is a market opportunity?
Simply described, a market opportunity is a gap in the market. Something, someone, or some place that isn’t being serviced by other businesses that you may take advantage of and exploit to expand your company swiftly.
However, it is simpler said than done. Everyone is striving for the same spot and searching for that extra, unheard-of thing to put them ahead of the competition.
How therefore can you identify a promising market opportunity before your rivals do? And once you have one, how do you go about creating an effective business growth strategy?
How to identify a good market opportunity
Identifying a good market opportunity for your business boils down to four key areas:
1. What do consumers want/need?
2. What is your competition doing, or more importantly, NOT doing?
3. How can your product solve a particular problem? Or compliment a pre-existing solution?
4. What is the current state of the market?
Following the completion of these inquiries, you ought to be in a better position to comprehend your target market, spot product flaws, and ultimately find untapped markets.
Let’s look at some of the methods you might use to respond to the following four questions.
How to use consumer data analysis to identify market opportunities
The first thing you need to do is figure out who exactly you are selling to. Knowing your audience is essential to assisting you in discovering a new market opportunity, whether you are doing customer surveys, analyzing data from your own website, or using third-party research.
Customer reviews and surveys analysis
Asking your consumers directly is one of the finest methods to find out who they are and what they want from your company. Customer feedback and surveys may provide you with valuable information about every facet of your company, from what clients think of your goods and services to how well your website and customer care department run.
Even though analyzing all of this feedback can be time-consuming, there are tools available to help. Sentiment analysis software can automatically determine the feelings underlying each comment and find recurring patterns in your comments. For instance, you can learn that multiple consumers have brought up a product’s flaw or that they feel your service falls short when it comes to after-sale support.
You may use the information you learn from your reviews and surveys to enhance your offerings, customer service, and brand perception. You must choose what you want to take away from your feedback and how you will apply it moving ahead.
Identifying consumer segments
Examine your current audience and divide it into groups according to characteristics you find common. These can be hard demographic variables that can be used to estimate market size, such as age, gender, geography, income, occupation, etc. You may find out why individuals would purchase your items by analyzing “softer” factors like attitudes, lifestyle, and personal values. These factors can affect everything from price to design.
Creating customer personas
After segmenting your audience, you should become a little more specific and create some distinct client profiles. Customer personas are a more thorough breakdown of the many customer types most likely to patronize your company. For instance, a toy store might include personas for parents, children, grandparents, and so on.
If it helps, you can give each of these personalities a name, age, and personality. The more real-looking they are, the simpler it will be to start relating to them on an emotional level. Personas make it simple for everyone in your company to understand the motives, potential pain areas, and ways in which your company may assist your target customer.
Based on actual clients, create each of your personalities. You may go deeper into who has purchased from you in the past and why by using surveys, feedback, and site analytics. In the long run, your business growth strategy will benefit from personas more if they are accurate.
Market opportunity examples across the world: Starbucks
When it comes to illustrating the failures of worldwide expansion, Starbucks has been virtually every expert’s go-to case study. Its failed attempt to dominate the Australian scene resulted in the closure of almost 70% of its outlets.
But another American coffee shop, Gloria Jean’s, did well in Australia.
It was a case of Starbucks not knowing how to make their brand relevant, not knowing how Australians loved their ambiance, and not being able to offer a menu that was palatable to the general populace.
Purchasing pattern analysis
Until you know how frequently and how much a consumer is likely to spend with you, you cannot assess the potential value of a new market opportunity. Your target audience’s frequency, amount, and value of purchases are revealed by their buying behaviors.
Key inquiries to make are:
• When do customers purchase our goods or services?
• When they need it, is it there?
• Where do people make the purchase?
• How are payments made?
Types of buying pattern
Every consumer purchase falls into one of the following categories:
How to carry out purchasing pattern analysis
Consumers often go through five stages when making any purchase, regardless of the pattern they fall into. It’s crucial to comprehend each of them to determine where and how your company fits in.
1. Problem recognition
When a consumer realizes they either need or want to buy something, this is when it happens. They might require new headphones because their old ones broke, or they might decide to update their existing set of headphones since a new model just came out.
2. Collect information
At this point, buyers start to learn more about the products they might buy from a variety of sources, such as asking for suggestions, reading reviews, speaking with salespeople, clicking on advertisements, and more.
3. Evaluate alternatives
Consumers will have a number of options to pick from in terms of the kind of product or service and the brand or company after doing their research. Consider purchasing headphones as an example. The buyer will need to determine the brand they want to purchase as well as the sort of headphones they want (in-ear, wireless, or over-ear) (Sony, Bose, Beats, etc.).
They will evaluate the benefits, costs, and features of each good or service during this stage of the process in order to make a choice.
4. Final buying decision
Time to make or break! The consumer will now make a final decision regarding the good or service they’re going to acquire, albeit they also have the option of choosing not to do so! If they do decide to move further, they will additionally think about the location, timing, and mode of their intended purchase.
5. Post-purchase evaluation
The last stage is the most crucial if you want to keep your consumers. After making a transaction from you, did your consumer express satisfaction with it? Do they know who to call if they require assistance?
Asking for feedback at this point is a wonderful approach to assess how easy the consumers’ entire purchasing process was for them as well as to uncover any problems with the product or service so you can address them quickly and keep the client satisfied.
2. How to use product analysis to identify market opportunities
Product analysis can take many different shapes, but to put it simply, it is enquiring about and gathering feedback on your product. You can get information from a variety of sources for this, such as focus groups, current customers, and industry or product specialists. Almost any step of the design process is a good time to conduct a product analysis.
Evaluating your existing products using consumer feedback
Finding and analyzing customer reviews of items is a terrific approach to receive insightful feedback on both new and existing products. Sentiment analysis tools can highlight the positive and negative aspects of your product so you can quickly see what is working well and what needs to be improved.
When you know which products are popular with your customers and are receiving positive reviews, you can choose to concentrate on expanding the lines of these products, or you can switch up your marketing strategy by emphasizing the aspects of your products that your target market finds most appealing.
Evaluating complimentary or new product launches
You should be watching not just your own items but also those of others. Your growth strategy will be greatly influenced by how well items that complement your own perform. You must stay current with current trends in order to comprehend how these complementary items might impact you.
For example, if you make printers, you should monitor paper sales because more and more companies are putting a premium on sustainability. If you see a dip, you’ll need to either come up with a different plan of action or modify your growth approach.
But it’s vital to keep in mind that it’s not just passively monitoring how other people fare. Building connections and collaborating with like-minded companies might actually help your clients and open up new market prospects.
Market opportunity examples across the world: Ikea
The culture of the area is another element that has a significant impact on how people perceive products.
Ikea is renowned for its ready-to-assemble furniture and DIY philosophy. But in India, people are accustomed to having their furniture constructed. Indians of the middle and upper classes rarely own power tools, much less utilize them, or read manuals with complex graphics.
Ikea has however made progress in figuring out what the target market wants, changing everything from the type of wood used in the furniture to the Indianized Swedish meatballs offered on the menu.
It’s too soon to predict if Ikea will succeed in the subcontinent, but it surely helps to conduct accurate fieldwork the first time.
A business would be well to consider expanding to another area, especially if the market it serves is starting to become saturated. Untapped markets can present a variety of new prospects, potential clients, and business lessons.
3. How to use competitor analysis to identify market opportunity
The following phase in creating a successful growth strategy is comprehending your competition. There are several approaches, but the main thing you want to attempt and unearth are the primary advantages and disadvantages of each of your competitors. Then, use what you’ve discovered to influence the course of your firm.
Many new firms overlook competitor analysis, yet doing so will help you create good offensive and defensive plans, as well as forewarn you of any prospective possibilities or threats as early as feasible.
In order to compare your performance to that of your primary competitors, competitor benchmarking makes use of a variety of metrics. With anything you’re comparing, whether it’s market share, sales, or even your Net Promoter Score, you may be as general or particular as you wish. This is your chance to assess your performance in detail and determine the potential location of your next market opportunity.
How to choose competitors to benchmark against
Keep your attention on the task at hand and resist the urge to simply put everyone’s name in the hat. If you want to understand how you can improve right away, the main players in your field if you have higher growth aspirations, or even those who are playing catch up if you want to prevent being caught off guard in the future, you can opt to look at your direct competitors.
How do you choose what to benchmark
Where do you begin when there is so much to look at? Consider your company’s goals and the KPIs that will be most helpful in achieving your growth objectives. If you’re still hesitant, you can start in a few of the following places:
• Financial results (revenue, profit, year-on-year growth, etc.)
• Marketing stats (brand recognition, social following, engagement rates, etc.)
• Sales numbers
• Customer service statistics (customer relationship, action and efficiency, response times, etc.)
• Customer experience metrics (Customer Satisfaction Score, Net Promoter Score, Customer Effort Score etc.)
Establishing your existing standing in the business you have chosen is also crucial. You can get a better understanding of where you stand in the market and identify new growth possibilities by comparing your business processes to “best practice” approaches and your performance to industry standards.
How to choose what to benchmark
It’s not always the simplest information to obtain, but if you look carefully, you can find a lot of data that you can use as a benchmark. Brand awareness, for example, could be difficult to measure precisely, but site traffic, Net Promoter Score, and social engagement are all quantifiable if you know where to look.
Here are a few metrics you may start monitoring to better understand how you’re doing in comparison to industry standards:
• Average order value
• Net promoter score
• Site traffic
• Average revenue per customer
• Social engagement
• PPC cost and rankings
• Feedback response rates
What to do if you’re looking to enter a new industry
Benchmarking won’t do if your business growth strategy calls for entering a new sector of the market. To more accurately assess the market opportunity available, you’ll want to learn as much as you can about your new industry.
Before starting your new business, there are a few things you should learn more about, such as:
• Market size
• Market share
• Growth rates
• Brand positioning of competitors
• Pricing and sales rates
4. How to use market analysis to identify market opportunity
Understanding the market, or the elements of the business environment, that may have an impact on the course your organization is taking, is the last piece of the puzzle. There are many external events that could possibly disrupt or even increase your odds of success, including political decisions like Brexit, legal changes like GDPR, and broader economic changes.
It might be challenging to keep up with everything that is happening, but it is critical that you do so in order to make more informed decisions for your company.
The following are a few things you should pay particular attention to:
• Technological developments
• Government regulations
• Geopolitical shifts
• Economic indicators
• Trade policies
• Social and cultural changes
Although much of this research will involve some fieldwork, using customer feedback can help you immediately gauge how seriously your consumers take these concerns.
Customers can be questioned about how these concerns might effect them in surveys, which gives you a wealth of viewpoints and more knowledge to assist inform your strategy for dealing with any potential roadblocks.
How to develop the right growth strategy for your brand
You’ll need a business growth strategy that enables you to capitalize now that you’ve finished a thorough analysis of the market and located the opportunities.
Because they never stop moving forward, companies like Apple, Netflix, and Amazon are able to maintain their growth. Their growth plan is adjusted as a result of their listening to and learning from the marketplaces and, most crucially, their consumers.
It all comes down to creating a reliable brand with lasting appeal. Creating a brand identity and a growth strategy that aims for constant and flexible expansion is crucial. Sure, there are some fast wins that could give you a few additional leads in the near term.
Ultimately, each firm is unique, so what works for one company might not work for you. If you’re still unsure about where to start, let’s look at a few possibilities.
Improve the reputation of your company
How is your brand viewed by consumers? Have you earned a good or bad reputation? Do you even have a reputation for your brand given how well-known it is? There is always space for improvement, regardless of how positive, negative, or neutral your reputation is, and doing so could greatly accelerate your progress.
To begin with, you must ascertain the reputation of your brand, which may be done by starting a client feedback collection process. Reviews and polls are a great place to start, but you can also utilize social listening techniques to find out what customers are saying about your business even though they might be reluctant to say it to your face.
You can leverage any favorable comments you receive to enhance the reputation of your brand. You can utilize them to influence any upcoming marketing initiatives, share them on social media, and include them into your PPC advertising. For instance, if your research reveals that your customers adore your eco-friendly packaging, your upcoming campaign might emphasize just how green your business is!
It’s also important to think about if you’re taking any actions that can damage your reputation. For instance, if you ignore or respond poorly to negative comments, it will harm your relationship with your clients.
Market opportunity examples across the world: Netflix
Over the years, Netflix has filled a variety of market voids. The business started out by mailing out DVD rentals for a monthly charge in 1997. The business had a DVD rental website in 1998 that was in competition with Blockbuster Video, which had physical storefronts.
One of the first profitable online DVD rental businesses, the business had more than a million clients by 2003. When the company launched its streaming service, it had 10 million subscribers by 2009, and Blockbuster declared bankruptcy the following year. As of 2022, Netflix has 200 million subscribers worldwide and is available in 190 countries.
Your employees are the face of your company, so whether you know it or not, if they’re unhappy, they’ll be talking poorly about it. This may have a long-term negative effect on your reputation and stunt the development of your brand.
Additionally, it can make your initiatives unsuccessful, as was the case with Starbucks’ recent transgender acceptance campaign. Unfortunately, the campaign became viral for all the wrong reasons because the brand values portrayed in the video advertisement didn’t align with how many transgender employees felt.
It is simple to determine where your brand is succeeding and failing from the viewpoint of your employees. Your staff members can voice any complaints, express what they enjoy about their positions, and participate in the development and success of the company by participating in regular anonymous employee engagement surveys.
Even if you won’t be able to accommodate every employee’s request, you still need to demonstrate that you value their input, even if it’s not always favorable.
Focus on customer experience
Isn’t it time you stopped thinking about selling items and started focusing on selling experiences since firms who excel at their customer experience generate 5.7 times more income than the competition?
The economy of experiences is flourishing. 72% of millennials decide to spend their hard-earned money on experiences rather than actual things when making purchases. Due in part to technology, but also to changing consumer behavior that places a premium on shared experiences and the convenience of using smartphones for socializing, sharing, and shopping.
You must first understand what makes your customers tick if you want your firm to benefit from it. However, receiving feedback from your consumers before you start developing a new customer experience-focused growth plan will help you learn a lot about what you’re doing properly and, more crucially, what might be missing from your existing offering. Start building individualized brand experiences that are based on what your clients are telling you they genuinely want by utilizing his insight! removing the uncertainty and providing you an edge over the competitors.
Even though you already have some excellent goods under your belt, you still need to have a product development strategy in place if you want to stay ahead of the competition. You must be able to stand out in a crowded market, and distinctive goods and services are a wonderful method to achieve this. In addition to helping you keep your current consumers, fresh product advancements can draw in new ones.
To create a successful product development plan, you must first understand the needs of your target market. Consider:
• What your customers need
• What needs to be improved
• What your competitors are doing
Engaging your customers in your strategy is one of the finest methods to learn this information. To get input for improving your product offering, create surveys, read reviews, organize focus groups, and execute beta tests on new items. This will not only guarantee that you are producing goods that consumers value, but it will also strengthen your relationship with your current clientele because they will feel invested in the expansion and success of your business. If you want to expand your business, you need to check both of these boxes: this can assist increase customer loyalty and draw in new clients.
What is the difference between market research and market opportunity analysis?
Consider that you are in charge of putting up an ice cream counter in a shopping center. How would you approach the whole thing?
Finding the counter’s placement would be the first step. Would it take place inside the mall or outside? What flavors would you then be providing to everyone else? What would you charge for your goods, in the end?
When doing your market research, you would start by asking questions like these. You would need to draw on data that you either currently have on hand or obtain through market intelligence from multiple sources in order to respond to these inquiries.
After setting up your ice cream kiosk, you start thinking about how to expand your company. Could you perhaps raise the cost of each flavor? Maybe you could come up with some new combos or bargains. Perhaps you could collaborate with a different well-known brand to release a new flavor? These are only a few instances of market prospects that might enable your company to reach new heights of development.
Given that there are many overlaps between market research and market opportunity, it is simple to become confused between the two.
Market research provides information on which market opportunities are worthwhile, which makes it simple to recognize the difference.
With their rapid fluctuations, markets may be sensitive things. It can feel hazardous to try something new or ambitious for your business.
However, seizing market opportunities shouldn’t require making a big bet. When done well, market research can eliminate ambiguity on multiple levels.
Market opportunity examples across the world: Whole Foods
Whole Foods fills the market void created by consumers’ desire for a central location to buy natural, organic, and nutritious food goods. Only a few natural food supermarkets existed in the United States in 1980, when the first Whole Foods Market opened in Texas.
The business spread all over Texas and the southern United States by 1984. The business began acquiring additional natural food stores on the West Coast and in the Northeast during the 1990s. Amazon.com bought Whole Foods in 2017, and it will be its property as of 2022.
Chapter 1: Identify Strengths and Weaknesses
Even companies that appear to have it all together and be in the lead might have both strengths and disadvantages. Even while it is crucial for each firm to recognize its advantages and disadvantages, not all companies take the time to do so. People frequently find it simple to recognize their strengths, but it can be more difficult to acknowledge their flaws. However, that is precisely what every company ought to be doing!
Every company should focus on identifying its strengths and shortcomings for a variety of reasons. To begin with, once you are aware of your company’s advantages, you can utilize that knowledge to narrow your attention to those advantages, use those advantages to create a game-changing product, and ultimately expand your company. Knowing your shortcomings gives you the opportunity to make changes for the better and possibly enhance current items. Because you will be addressing it and perhaps resolving something that could be perceived as a threat to your organization, that shift can aid in the growth of your enterprise.
Here are several tips for determining your business’s strengths and weaknesses:
• Analyze. In order to identify the advantages and disadvantages of your company, analysis is crucial. You should be truthful when doing this. Again, admitting to our shortcomings can be challenging, but doing so is necessary if we want to make progress. After reviewing your prices in relation to the market using a pricing analysis report, you could occasionally need to make these price changes. In other instances, they could result from an ignorance of your target audience as a whole. Without evaluating everything and being sincere with yourself, changes cannot occur.
• Compile a list. Make a note of all the areas where the company, in your opinion, demonstrates its strengths and flaws on a piece of paper. If you’re being sincere, there’s a strong probability that you can recognize many of those places on your own. It may not have occurred to you previously, but once you do, it won’t be difficult to identify some areas for concern and those in which your company thrives.
• Consult others. Consider including others in the discussion if you are having trouble determining the company’s strengths and drawbacks. Ask your loved ones, your coworkers, and perhaps even your customers what they think. Create a survey for your consumers to complete if you’re going to ask them for feedback on your products or services, as well as any areas where you think your business may improve. A competitive pricing analysis company might be used as an example to analyze what is happening with your company’s price schedule and how it compares to market values. You can grow and change for the better with the help of the knowledge you gain from something like this.
• Take note of complaints. Does your business keep track of the consumer complaints it gets? If not, begin developing a procedure and a policy to do so. This is a fantastic technique to discover more about your company’s weaknesses. Since you will notice patterns in the complaints, the information you obtain will assist you in identifying weak points. Changes should be made using this information, especially if a certain policy, item, or service is frequently the subject of criticism.
• Make improvements. As you compile all of this data, you’ll discover your strengths and shortcomings. The details regarding your deficiencies are possibly the most crucial and should be addressed. Avoid overextending yourself by attempting to complete them all at once. Instead, concentrate on two or three areas of weakness at once. You can then set a target and establish a plan to take care of those before moving on to others. If changes can be made right away, fantastic. However, if they are the kind that will accept longer-term fixes, don’t worry. Things will eventually get better if you start making changes and attempt to enhance your weaknesses.
You may do this with your employees as well as as a firm as a whole. Ask them to honestly assess their assets and liabilities. Once they have, look into what may be done to fix the flaws. Perhaps making a few adjustments to your responsibilities will make your business more effective. Making such improvements allows for time savings and aids in the company’s future expansion.
Finding your strengths may be thrilling and joyful. However, having to examine the flaws in your business or workforce is never fun. But doing it is something that is crucial. This is especially important if you want to deal with dangers, support your company’s goals, and keep one step ahead of the competition. Set a goal to perform this exercise once a year or more, as new deficiencies could develop over time. By doing this, you can make sure issues are resolved and your business keeps running smoothly.
Make sure to seek assistance from a firm that performs a competitive price research and to look at your clientele as well. Make sure you are aware of your strategies for increasing the viability of your company.
Chapter 2: Purchase Situation Analysis
Any company decision should come after conducting a situation analysis. Planning for a new market opportunity or launching any new endeavor should start with this phase.
In this course manual, we’ll explain what a purchasing situation analysis is and walk you through how to conduct one to help you comprehend the idea better.
What is a Situation Analysis?
Prior to a new marketing initiative or project, it is essentially the process of critically examining the internal and external variables that affect a firm.
It gives you the information you need to see the opportunities and problems that are now facing your business, service, or product. The development of a strategy to advance from your current marketing scenario to your desired situation is aided by this.
• Helps define the nature and scope of a problem
• Helps identify the current strategies and activities in place to overcome the problem
• Helps understand the opinions and experiences of stakeholders
• Helps give a comprehensive view of the current situation of the organization
• Helps detect the gaps between the current state and desired state
• Provides information necessary to create a plan to get to reach the goals
• Helps identify the best courses of action to take during the project
• Helps make sure that efforts and actions are not repeated and wasted unnecessarily
Steps to Conduct A Situation Analysis
By completing them, you will be able to get a thorough understanding of the conditions surrounding your organization.
Conduct a Customer Analysis
Investigate your target market in depth to learn about its demographics, geographic location, trends, interests, issues, etc. You may correctly organize the information using a client profile.
You may identify market trends, customer behavior, and demands and devise efficient methods to effectively reach them with the aid of a thorough customer study.
Take a look at the Product and Distribution Situation
Consider how well your current goods and services can meet the demands of your clients.
If you have distributors, you should also assess them in terms of distribution channels, distributor demands, distributor types, distributor sizes, as well as the numerous advantages enjoyed by both the distributors and the business.
Analyze the Competitive Advantage
You must identify your main competitors, their product positioning, and their strengths and shortcomings in order to ascertain your competitive advantage.
Here’s how to use some useful graphic tools to conduct an efficient analysis of your competitors.
Assess Your Environment
Examine how your organization’s performance may be impacted by both internal and external influences, including economic and political trends, personnel abilities, and the availability of resources.
Both the SWOT analysis and the PESTLE analysis are effective methods for doing an environmental scan.
After doing a thorough environmental scan, you will be able to pinpoint the opportunities and difficulties presented by recent developments.
Chapter 3: Direct Competition Analysis
What is direct and indirect competition in business?
Competition is not limited to athletics. It is something that exists in a variety of disciplines, including business, economics, psychology, and biology. In spite of the fact that the term itself may have a bad connotation (e.g., win-lose, zero-sum game), it is actually a crucial component for everyone, especially your business. Long-term improvements to your products, services, and client connections are made as a result of increased motivation and innovation.
Henry Ford once said:
“Competition whose motive is merely to compete, to drive some other fellow out, never carries very far. The competitor to be feared is one who never bothers about you at all, but goes on making his own business better all the time.”
Understand your competition, whether they are direct or indirect, regardless of whether your business is just getting off the ground or is well established. Why? Any company that might dissuade a potential client from picking you is one of your competitors. What company wouldn’t want to contend for that?
Understand your competitors
As corny as it may sound, competition is a given regardless of the goods or services you provide. For this reason, it’s essential to know what the other major players in the field are doing in order to retain your current clientele and advance. Google research is one of the cheapest, simplest, and quickest ways to find out more about your competition. To assist you understand what they’re all about, you can find client endorsements, reviews, opinionated blog articles, and other illuminating stuff online.
Pro tip: Perform a competitive analysis to keep a more detailed eye on your competitors. It’s crucial to conduct this extensive research in order to understand where your company fits into the market environment, even though it’s not a one-time project. This entails contrasting the pricing points, advantages, disadvantages, and characteristics of competing goods and services with those of your own.
Identifying the three major categories of competition—direct, indirect, and secondary competitors—is a vital component of mapping your competitors. Here, it’s crucial to be familiar with various company models in order to create a mental map while strategizing and guarantee that you have that “it” element in your market.
When two or more businesses fight for the same market by providing the same good or service, this is referred to as direct competition.
There are lots of typical instances of this. One is the competition between McDonald’s and Burger King; more particular, the Big Mac and the Whopper are fierce competitors. Apple’s iPhone and Samsung’s Galaxy is another illustration.
It’s not always easy to tell who your competitors are and who they aren’t. So, to assist you in locating direct competition, here are two straightforward methods:
• Customer feedback: Your clients undoubtedly have a few additional factors in mind before choosing you as their preferred brand. When you gather customer feedback, you can start to comprehend their preferences with the aid of your help desk software. Ask current clients which businesses they were considering. Ask prospective clients which companies they are thinking about in order to tailor and center your pitch on their requirements.
• Online communities: Boy, do people love to express their opinions on social media. Nowadays, the best places to go for advice are brands’ social media profiles and discussion boards on websites like Tumblr, Quora, and Reddit.
When two or more companies provide a separate high-end or low-end version of your product or service to a similar market, this is known as secondary competition.
The following are a few instances of secondary rivals. Both Gap and Gucci, which are retail companies, aim to appeal to middle-class consumers who value practicality over luxury. Then there are websites that let you stream videos for free, but frequently at the expense of quality, such as Netflix and YouTube. With the first, you must pay a monthly charge to access premium content.
It frequently happens that launching a business is accompanied by a tornado of emotions. But you soon come to the realization that there are a lot of things you’ll need to do to put yourself on the proper road, including hiring smart staff members and developing an effective social media marketing plan.
Initially, you support customers through your personal Gmail account. However, when you develop and grow, you might find that it’s not scaleable. The next stage is to upgrade to “help desk software,” which comes with a full complement of features to expedite and manage your customer assistance. As a result, a ticketing system and your single Gmail mailbox are viewed as supplementary competitors.
Chapter 4: Indirect Competition Analysis
When two companies target the same market and audience, try to meet the same requirements, and offer different products, this is known as indirect rivalry. Because they offer various remedies for the same problems faced by customers, indirect competitors frequently steal away a sizable portion of a company’s potential customers.
Direct Competition vs Indirect Competition
Some junior marketers may design brand strategies without considering indirect competitors, concentrating primarily on the direct ones. To obtain a complete picture of the market environment, it is essential to take into account a range of goods and services. Below, we contrast direct and indirect rivalry and outline their unique differences.
When two businesses compete directly, they are providing the same goods to the same market. Although the brands, promotions, values, and marketing methods of the compa