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There’s a lot to think about when launching a new product — making it, getting it into the market quickly, and selling it. It can be easy to overlook another important thing: assessing the competition.
There are so many new products entering the market, and so many channels where they can be sold. This can make it challenging to gain share of category, voice, shelf, etc.
A competitive assessment is a systematic approach to gathering and analyzing information about the competition. It can help you determine competitor strengths and weaknesses, and identify your points of differentiation. If nothing sets you apart from what’s currently on the market, you might have to compete on pricing, and that can be difficult to sustain.
First: identify the competition
Direct competitors are brands in the same category offering similar products to a similar target market. For example, McDonald’s and Wendy’s are two quick-service restaurants offering hamburgers.
Indirect competitors are in the same category, but offer different products to a similar target market. An example would be Chick Fil-A, which offers chicken sandwiches. All three are quick-service restaurants offering fast food consumers a quick and convenient sandwich menu option. (source: Indeed.com, “How to Conduct a Competitor Product Analysis”).
There are several tools that can be used to conduct a competitive assessment.
- Online Research: Searching the competitor’s website, related news, industry or investor presentations, customer reviews and comments.
- Reviewing Social Media Platforms: Social media presence, reviews, and comments.
- Attending Industry Events and Conferences: This is another way to gain more knowledge about the competition.
- Conducting Market Research with Consumers: If available, conduct market research through surveys or focus groups with consumers. This can provide valuable insights, and can potentially help you identify gaps in the market.
- Making in-person Store Visits: See how many different brands a retailer carriers in their store, the shelf set and shelf presence, and take a closer look at the products and packaging.
The Food Innovation Center at Rutgers (FIC) helps clients by conducting a competitive assessment that is food and beverage product-focused. Working with the client, we begin the process by evaluating the category, and understanding how it is segmented. From there, we identify the key competitors within the category. We work with the client to make sure we are including a broad cross-section of different types of competitors.
After aligning with the client and selecting the competitors, we conduct the research, using many of the tools mentioned above. Since the focus is on the product, we look for attributes such as the ingredients, the ingredient statement, claims, nutrition, etc.
For example, one of the areas that we focus on is determining whether the product has a clean label, which is something that today’s consumers are demanding. While clean label does not have a regulatory definition, consumers say they are looking for a clean and concise ingredient statement, and familiar ingredients without preservatives or artificial ingredients.
In addition to the product attributes, we also review the packaging — both inner and outer — which is an integral part of the product experience. It is the first thing consumers see, whether it be online or on a store shelf, and is critical to the consumer’s perception of the product. It is also important to note whether the packaging is sustainable and/or recyclable, another attribute that’s become more important to consumers.
This process is very collaborative. We review and discuss each section of the analysis with our client, and determine the best approach for their product going forward. We do this in combination with a competitive sensory assessment, allowing us to combine both the sensory results and the analytical data to determine the best path forward.