8. Why is it necessary for me to thoroughly research my competition?
Very few businesses operate in an environment where there is no competition. Direct and indirect competitors are trying to convince customers to buy their product rather than yours. It is in your best interest to learn more about the companies that are trying to reduce your take-home pay. Knowing the competition enables you to get a competitive advantage.
Determine the strengths and weaknesses of each of your competitors. Talk with friends, visit your competition, obtain their product information, and analyze how they advertise. Rate each of your major competitors on a scale of 1 to 10, for product quality, process, advertising and customer satisfaction. You can add other ratings that you feel are important.
You can now use the competitive analysis to make decisions relevant to your strategic marketing plan (an integral part of your business plan). Use it to decide what your competitive priories (cost, quality, time and flexibility) will be. Stress why a customer should come to you instead of the competition. Will you be faster, have higher quality, more features, or lower cost? These will help guide your marketing plan. It will also help you to increase your company’s customer satisfaction rate (which usually shows up as a weakness in many firms). Finally, it can help you make the right decisions on customer and product segmentation (target marketing).