Spend any time in the working world, and you realize that the more you know, the better you perform. Indeed, you’ve probably learned this lesson via other areas of your life, whether it was during your 9th grade history class or your baby’s first year; Knowledge yields, and certainly wields, power. For companies, this often means figuring out to whom and how they can supply a demand, as well as the competition with which they might be faced. Read on to learn what market research & competitive analysis have in common and how both combine to deliver competitive advantage.
But First…What is Market Research?
In short, market research is the process of collecting data on consumers, including, especially, their wants and their needs. Oftentimes, this process incorporates both secondary and primary sources of information. The costs associated with each of these data types vary greatly depending on many factors, such as a company’s size and its resources, offerings and overall customer reach (among others). Nevertheless, general consensus concludes that those businesses that keep abreast of current market activities and trends (no matter their budget) routinely outperform the ones that don’t.
Therefore, whether you use syndicated industry reports, government census data and trade journals or conduct your own focus groups and circulate your own surveys, researching your market inevitably gives you a leg up.
So Then…What is Competitive Analysis?
Market research & competitive analysis aren’t really very different. In fact, one (competitive analysis) is just a subset of the other (market research).
As mentioned, part of good market research is determining what consumers want and who is already in the market offering it to them. This is because when you identify what people want and what they are already getting, you are better equipped to find a unique position of your own to leverage. This makes you stand out from everyone else. A good survey (or report or focus group or social media listening campaign, etc.) will help you recognize opportunities and threats to your current and potential products and provide you with historical information that can be used to predict realistic prospects, offerings and competitive threats for the future. Thus, by using market research to shed light on your current and would-be competitors, you expose the things that consumers like about them and the things that they don’t, paving the way for you to carve out your own specific market niche.
And…Why is This Considered a Competitive Advantage?
When used to forecast future demand, market research — and especially a competitive analysis — can help a company shape both influence and position within a market, advantages that often sustain a business when others start to fail. Think about it: if you know customers respond favorably to a competitor’s pricing, but routinely criticize its customer service (a fact you learned while researching the market), you have the opportunity to tweak your own pricing and service policies in response. And if your competition isn’t doing the same, you are poised to challenge and even exceed your current market share.
Want to Learn More?
Market research & competitive analysis combine in ways that give companies a competitive advantage. If you need help learning how to access data that can help you better understand your customers, contact our team at Communications for Research (CFR). We are skilled in driving competitive analyses that improve your ROI and keep you in front of your competitors.