Every business has competitors. Even if your food or beverage product is truly unique, you will still vie for consumer’s attention and dollars with other brands.T o help you develop, grow, and evolve your product, price your goods to sell, and market your products to consumers, you will want to understand your competitors.
Before we jump into how to analyze your competitors, it’s important to understand the difference between direct and indirect competitors. A direct competitor is a company that makes a product that is similar to your product. For example, Barnana and Goya are businesses that produce plantain chips. An indirect competitor is a company that does not make similar products but serves the same need. A consumer that buys plantain chips can easily replace their need for a snack with pretzels or tortilla chips.
Here is a step-by-step guide to creating a competitive analysis.
1. Identify your competitors. Take a visit to area supermarkets, restaurants, farmers markets and festivals to look for similar concepts. Also, search online for competitive products. Sites like Food Business News and the Speciality Food Association provide a wealth of information on new and existing products. You should also search relevant hashtags on Instagram to learn about your competitors. List them out and identify which competitors are readily available in your market, and which require online ordering or other means to purchase.
2. Collect competitors’ products. Once you have identified your competitors, visit their websites and social media accounts to gather information about them and their target market. Be sure to purchase their products as well. Since taste (although subjective) is a factor in consumer purchase decisions, it’s important to know how your product measures up.
3. Get organized and evaluate the products. Create a spreadsheet or to organize the information that you gather. This exercise will help you to identify the potential threats to and opportunities for your business as well as to evaluate your competitors. You will want to evaluate:
Product size and packaging
Ingredients and nutrition facts
Branding and brand story
Marketing and advertising efforts
Strengths and weaknesses
4. Identify what makes your product unique. Now that you are well versed about your competitors, use the information to help position your product within the marketplace and to tailor your marketing message to your target market. Identify your differentiators, focusing on things that matter most to your consumers. Find ways that you can stand out and carve out a niche for your product.
5. Revisit your plans. With the information gathered in Step 4, look at your preliminary and existing plans to identify new opportunities to grow. Review your marketing plans and see if there are new ways you can market and advertise your product that helps you position yourself as compared to your competition. Perhaps you need to look again at your packaging, or where you sell your products.
A competitive analysis can help set you and your product up for growth. An objective review of your competitors will help you understand ways you can increase your product positioning, promotion and sales.