Measure how your brand compares to competitors in your target market.
Create a spreadsheet with columns named Competitor, Attribute 1, Attribute 2, Sales data, and Notes.
Identify up to 10 direct and indirect competitors and list them in the Competitor column of a your spreadsheet, with your brand in the first row.
Group them according to their definition:
- Direct competitors offer the same, or extremely similar, products and services solving the same basic pain points. For example, Domino’s and Papa John’s are direct competitors.
- Indirect competitors offer slightly different products that solve the same basic pain points. In fast food, Subway is an indirect competitor of both Domino’s and Papa John’s.
Direct competitors are most relevant for competitive analysis. Indirect competitors can still help to determine your brand’s value perception in the eyes of your audience.
Define two attributes on which you can evaluate your competitive positioning. Rename the Attribute 1 and Attribute 2 columns of your spreadsheet to reflect these attributes.
The two attributes should represent the core of competitiveness you want to evaluate. Useful attributes vary based on the type of product you offer. Some common attribute combinations include:
- Price and value or quality
- Comfort and functionality
- Taste and nutritional value
- Performance and style
Choose attributes that your audience typically uses to decide between you and your competitors. Your audience should be able to subjectively rank each attribute within a given range, like high price and low price.
Survey your audience on how they would rank each competitor on each attribute. Use a scale of 1-10 and a question format like How would you evaluate the value of this product or service on a scale of 1 to 10, where 1 is the lowest possible value and 10 is the highest possible value?
Ask the same two questions for each competitor and your own brand. You can set up this step as a separate survey or include it in existing competitive research and brand perception surveys.
Create a perceptual map using your two attributes as the x-axis and y-axis, displaying competitors according to where their rankings on each attribute intersect.
The perceptual map visualizes how all core competitors relate to each other on the attributes central to your audience’s decisions. The x-axis and y-axis should intersect at each other’s 5 mark, forming a grid with four separate quadrants:
- The upper right quadrant includes brands ranked highly on both attributes
- The lower left quadrant includes brands ranked low on both attributes
The upper left and lower right quadrants include brands ranked highly on one, but low on the other attribute.
Gather relevant sales or usage data from each competitor and list annual sales in the Sales column of your spreadsheet.
Sales and usage data from competitors is not always available. When it is, this step allows you to add a more tangible market share definition to the perceptual map component.
Use sales data when available, or usage data as a less direct but still tangible alternative. Volume of organic brand searches and website visits can function as substitutes when neither sales nor usage data is available.
In one sentence, summarize the relationship between each competitor’s perceptual map and sales or usage data in the Notes column to show how the selected attributes predict competitiveness.
Include any observations you have made between perceptual and market share relationships for each competitor.
If the relationship is relatively linear, with high market share brands also ranking highly on the perceptual map, the perceptual attributes are indicators of competitiveness. You can now put strategies in place to improve perceptions of your brand on either or both attributes to increase your competitiveness.
If no correlation appears obvious, other attributes might be more predictive. In that case, repeat the first steps above with different attributes in a new worksheet to determine whether other attributes have a higher impact on competitiveness.