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May
Before you begin spending money on
advertising, web site design, storefront, and printed materials,
carefully research your competition. How do they reach
their customers? Where do they advertise? Is it working
for them? What is their pricing model? How
successful are they? Ask. Then, ask again. Do not be shy. Much
can be gleaned from a casual conversation.
A very common mistake by many entrepreneurs
is to ignore the competition. Often, competition is defined as a
full match between products and services. This is not always so.
The product may not be exactly like yours, the service may
differ - but does it fulfill the same need? It is possible they
have a better match between market needs and product or service,
than you. Be brutally honest, bravely examine all competitive
products and learn all you can about them. Regardless of what
you find out, the path to success always starts at deep
understanding of your competition.
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Start with your target customers.
Do they currently purchase this product or service? Where? How?
Who is the vendor? Make a list. Include online purchases, as
well as neighborhood stores. If a vendor does not
exist, how do your target customers satisfy their need? If you
are lucky to find a real market need without an existing
solution, and if you have figured out how to fulfill that need,
you have arrived! Every entrepreneur dreams of that and
very few are so lucky.
Learn everything about your customers. Do not be afraid to ask
questions. Here are the top questions you must answer:
- How do they find their customers -
be observant: where do you see their ads? Magazines? Local
stores? Nationwide press? TV?
- How do they sell their product -
do they use ads? What type of ads? Are there expensive, glossy
brochures or small, black-and-white prints? Assess their
marketing expense by understanding their sales tactics. Now you
know how much they spend to sell their product. This is a key
piece of information.
- How do they present their product
- analyze their packaging. From appearance on the shelf, to the
look and feel of their collateral, business cards, web site -
all this is packaging.
- How much do they charge -
understand their pricing model. From base pricing, to special
packages, to discounts for volume or seasonal breaks - all this
will help you understand how to price your product or service
competitively.
This is the
hard part - you must make sense of all of that. A common mistake
is to not act on the competitive data. Compare the competition's
methods to yours. See where they invest. Assess their strengths
and weaknesses. Get ideas. Act: update your product. Finalize
your pricing and packaging so that it compares favorably. Create
a marketing presence that stands out and will differentiate you.
Competition fuels
innovation. Competition expands the market. Competition helps
your marketing efforts. They keep you on your toes so that you
are never complacent. They push you to be more effective in all
you do - more competitive pricing, better product features.
Do you have a question?
E-mail me.
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Daniella Russo is the CEO of Mindzone, Inc. Since 1999
Mindzone has helped businesses reduce time to revenue, launch
their brands and create successful marketing strategies. To find
out how Mindzone can propel your business or idea into the
marketplace, drop us a line.
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