The fear of competitive setback is not only alarmingly real but also frightening, especially if you’re a new fish in the ocean. On the contrary, it is worth knowing that fierce competition not only implies that the problem you’re solving is worth solving but also that the right product-market fit hasn’t been established quite yet.
Fierce competition amongst almost all industries has allowed businesses to shift focus on their customers, now more than ever. Companies are making consistent efforts towards their customers to understand their psyche and buying habits.
“Customer is King” is the new catchphrase used in almost every segment of the industry today.
The unpredictability of industry trends and accelerated advances in technology make it hard to predict market variations. The readiness to deal with these random variations varies from business to business. Since companies in the same sector are keen to overtake one another, preparedness in such times, coupled with immaculate market research and a lean plan of action, is crucial.
Brand positioning is critical when you think about competition.
The nature of selling a commodity has changed drastically over the years. Launching a proprietary product or marketing a mimic has never been easier. Even patented products can be mimicked by introducing minor variations and be sold by a new entrant or, worse, an existing competitor for a lower price, providing better value.
Customers today have a pool of products to choose from, all offering similar value at very competitive prices. Companies with higher brand equity tend to capture higher market share, even as a new entrant in an untapped segment. Conversely, emerging startups might find it extremely hard to find the right market for their product, even if it provides higher value at a compelling price premium.
Positioning can make or break your business.
However, it is exceedingly important to remain thoughtfully optimistic in your product journey. No matter how fierce the competition is, there is always a missing piece—a loophole, undiscovered by anyone but you, yourself. Believe in your product and market strategy and take all necessary actions kindled with the same belief.
To understand how to price and position your product the right way, it is imperative to establish ground. Establishing ground takes a lot of reflection and analysis. It might not be the easiest thing to do, but it is undoubtedly the most powerful thing to do.
Business owners have to find answers to two very straightforward questions before making a decision. Answers to these questions, however, are not easy to deduce. Where, on the one hand, the correct answer might position you perfectly in the market, providing a boost to your sales and profitability, the wrong answer might lead to a steady demise of your business.
In essence, it is crucial to be blatantly honest, thoughtful, and well-informed while finding your answers.
- WHY do you think there is space in the market for your product? Your OWN why.
- What is it that you are providing that brings previously unseen value to your customer? Your CUSTOMER’S why.
- What are you doing better than your competition? How are you doing it?
You have to figure out what you are or aren’t doing differently to decide your position in the market. There is no one right answer.
This question helps you figure out your strengths and evaluate your weaknesses as a business. It enables you to understand what you do best and capitalise on that.
Find a promise you can make to your customer and deliver on it.
- Why is your customer buying the product? What is the utility of the product to the customer?
- Why should the customer choose your product over your competitors?
This second question delves more deeply into the daily lives of customers. It seeks to understand why they do what they do and enables you to, more importantly, how they are doing it. It aims to realise the common hurdles the customer faces daily, which they have normalised and eventually become indifferent.
A common problem in the market is that customers don’t know what they want until they get it. The responsibility of making them aware of these hidden wants solely rests on the shoulders of a business with a new and promising product.
Now that you have your answers figured out, it is time to figure out how to position your product in the market and how to sell your product. Positioning can be tricky if you don’t know the market well. Every sales strategy relies upon impeccable market research.
Here are some of the most valuable strategies to understand your market and outsell your competition:
1. Determine who your customer is
While it is extremely tempting to assume that all customers willing to pay are your customers, it is, unfortunately, a false assumption. Your customer segment should be as narrowed down as possible. The more insights you have about who your customer is, the better you will position your product.
Careful demographic consideration of your target audience provides valuable inputs to your research. Some common demographics are:
- Income group
2. Dive into the pain points of your customer
Your business and allied product can only provide value if it’s solving a problem. It is crucial to understand your customer’s needs and wants. This can be achieved by a process known as “Journey Mapping.” As the name suggests, journey mapping provokes the business to understand a customer’s journey, starting from their pain points and ending at their product purchasing decisions. The buying process of a consumer consists of 4 stages:
Closely monitoring your customer during these stages can provide unexpected insights into your product positioning strategy.
3. Provide excellent customer service
Brand equity has a direct positive correlation with the value of customer service provided by the business. Customer traction can be controlled by providing unparalleled customer service. In a market with undifferentiated products, the company offering the best customer service wins the game.
4. Refine your SEO strategy
Having a well-defined and efficacious SEO strategy is paramount to the success of your business. In a highly saturated market filled with competitors, you want the customer to come across your brand before they stumble across others. You want to be ranked higher in search results to foster higher customer acquisition rates.
5. Regularly research and understand your competitors
Like it or not, your competitor is always keeping a check on you. It would be best if you did the same. Thorough research of your competitor’s strategies, campaigns, and altering business models is important to understand the current product options your customer already has.
Trying your competitor’s product can come in handy as it might give you an idea of the missing value it entails. You can then use that pain point as leverage to market your product to the customer. Sometimes being a customer and looking at the product from their point of view can lead to significant revelations, which otherwise would’ve been impossible to discover.
6. Speak passionately about your brand and values—have a strong credo!
The importance of establishing high brand equity amongst your current and prospective customers can’t be overstated. Customers align the product strongly with the brand that offers it.
Your brand tells a lot about what your product stands for. If your customer believes in the same values your brand projects, they will be more willing to purchase from you.
An excellent example of value marketing is the brand “One Plus.” The credo of One Plus is “Never Settle.” It sparks meaning, purpose, and imagination. Anyone who hears the word “Never Settle” almost immediately associates it with the brand.
Those of us who believe in staying strong and rarely accepting complacency tend to align ourselves with the brand, almost instinctively.
Rene Descartes quotes, “To know what people think, pay attention to what they do rather than what they say.”
An empathetic orientation towards the customer is as important as an objective outlook concerning just sales and profitability. It is important for businesses competing in competitive markets to become interested in the lives of their customers as people and not mere categories of consumers.
A winning product might not necessarily be a differentiated one, and a differentiated product might not necessarily make a winning set. A thorough understanding of the customer and the prevailing market makes a product stand out and succeed.
1) How To Start A Stationery Business?
2) Does Commercial Solar Power Make Sense For Businesses?
3) Where Do the Best Business Ideas Come From?
4) How Small Businesses Afford Digital Marketing?
5) OkCredit: Simple, Paperless & Secure solution for businesses
Stay updated with new business ideas & business tips with OkCredit blogs in English, Hindi, Malayalam, Marathi & more!
Download OkCredit now & get rid of your bookkeeping hassles.
OkCredit is 100% Made in India.
Q. Why is the customer not buying my product even though it provides greater value than competitors?
Ans. The answer varies from business to business. There is no one right answer. Try and track down your customer’s value chain and try to understand which product they are using over yours and why.
Q. What should my pricing strategy be in a competitive market?
Ans. Your pricing strategy will strongly depend on what your product has to offer and who your target audience is. Once you have a good enough idea of these two, understand the willingness to pay your consumer and pick a price accordingly.
Q. How do we know if our customers will actually like our product?
Ans. Good market research through surveys and insights into consumer needs can provide great value. However, it is important that your customer uses your product to understand tangibly the value it offers. So launching an MVP (Minimum viable product) for your customer to try would be a good idea.
Q. How would I know if the market is too competitive and entering it is not such a good idea?
Ans. If the market is too saturated and your product doesn’t provide any NEW proprietary value to the customer, it would be a tough bargain. If the fixed costs are too high and existing players are enjoying economies of scale, once again, it’s good to reconsider your primary objectives.
Q. How do I make my customer switch from my competition’s product to mine?
Ans. You need to make sure you market the product exceptionally well. Customers should understand the unseen value your product promises to provide. The correct marketing technique becomes really important in such cases. SHOW your customer WHY they should choose your product.