5

understanding the competition

When a company positions its brand in a customer’s mind, it is positioning that brand against other brands. It is critical to understand the strengths, weaknesses, opportunities, and threats of each of those competitors along with the industry structure itself. (In fact, wise organizations dedicate a person to understanding the competition.)

This knowledge about your competition is necessary because you want to uniquely “own” an important benefit in your customer’s mind. Ideally, this benefit is one that your competitors have not addressed and cannot easily address in the future. Better yet, the benefit you own should be one that takes advantage of your competitors’ Achilles’ heels.

At a minimum, you should collect the following data on each key competitor:

• Key business objectives, goals, and strategies

• Sales, sales growth, profitability, market share, and other key financial measures

• Brand equity including brand awareness, usage, preference, relevant differentiation, quality, value, accessibility, vitality, personality, key associations, emotional connection, and loyalty

• Product and service offerings

• Pricing and distribution

• Major customers

• Corporate culture

• Organization charts

• Sales organization and compensation

• Share of voice/marketing, budget/advertising spend

Sources of Competitive Information

Important sources of competitive information include:

• Competitor websites.

• Press releases. There are free online services that can send you daily e-mail messages with press releases on topics of interest to you.

• Industry analyst reports.

• Financial analyst reports. (If you have a Charles Schwab or Fidelity account, you can use their research functions to view company research reports from a wide variety of financial analysts.)

• News clipping services.

• ORC International (www.orcinternational.com) and Avention (www.avention.com) consulting and research services.

• Harte Hanks (www.hartehanks.com), Hoovers (www.hoovers.com), and other company databases.

• Online database searching services, such as FirstSearch, ProQuest, and Lexis-Nexis Academic Universe.

• Services that track advertising spending.

• Search engines and intelligent agents.

• Online chat rooms, bulletin boards, and discussion groups.

• Product/brand review websites, e.g., epinions.com (Chapter 11 has more).

• Trade magazines.

• Trade shows.

• Competitor direct mail campaigns. Add a friend or relative to their lists.

• Your field sales force. Responding to the information they send from the field will encourage them to send more.

• Ex-employees from competitors’ firms. They may be under your employ now, or they can be identified from job search databases.

• Current customers. Many of them will pass on competitive communications they receive.

• Primary and secondary research (qualitative and quantitative, including brand equity studies). Make sure to investigate syndicated studies. Syndicated studies are typically published by large research firms such as ACNielsen, Harris Interactive, and Forrester Research. An example is IntelliQuest’s Computer Industry Media Study.

• Purchase and use a competitors’ products (i.e., become a customer). Your entire management team should do this; it is an excellent way to understand competitors’ customer experiences.

• Market tours. If you work in retail, visit stores that carry your competitors’ products and talk with the sales associates about their products and services and what the companies are like to work with.

• Competitive intelligence firms.

This chapter has focused on how to better understand your brand’s competition. Use Figure 5–1 to assess the efficacy of your brand management practices in regard to competition. The more yes answers you have, the better you are doing.