Analyzing your competitor’s products with a competitive product analysis

What sets your product apart from the competition? When you launch a product, you must bring something with a unique value proposition (USP) to the market. If you don’t, there’s a good chance your product will fail to make a mark (or make you any money).

One way to mitigate the risk of launching a new product is to thoroughly analyze the current market with a competitive product analysis.

A competitive product analysis helps you strategically analyze what your competitors are offering. This analysis can give you insight into improving your product, targeting potential customers, and showcasing the reasons your product shines.

Learn more about competitive product analysis, how to conduct one, and how to use the information to refine your new product’s launch plan.

Competitive product analysis involves thoroughly examining the products offered by your competitors, which may be direct or indirect competitors to your own.

The analysis examines the competition and determines its strengths, weaknesses, features, target audience, and market position. It becomes a roadmap for understanding your competitive advantages to help you move ahead of your rivals.

With that information, you can

• Refine your product. By carefully examining the competition’s product, you’ll see where it excels or where it may be letting customers down. You can use that information to improve your product and ensure it brings something better to the table.

• Better target your audience segment. Product analysis will also give insight into how your competitors reach their customers. You can use that information to tailor your own marketing efforts and attract their target audience as your own.

• Develop your unique selling proposition. When entering a crowded marketplace, you need a product with a USP. Knowing what sets your product apart will become a key aspect of your marketing strategy. If you don’t know why someone would buy your product, neither will your customer.

What is product category competition?

Product category competition is a more high-level view than a specific competitive product analysis. It looks at the broader category of products that serve the same essential customer needs.

For example, Hulu, Netflix, Max, and Apple TV are all in the same product category. They all serve customers who want to stream shows and movies on-demand at home. A competitive product analysis would focus on analyzing one of those products in-depth, looking at its specific features and market strategies.

How often you do a competitor product analysis will depend on your product, business, and wider industry. Fast-paced industries like technology or fashion will do competitor analysis more often.

You may also do a competitor product analysis when a company in your industry announces a new product launch.

Remember that competitor product analysis can be time-consuming, so you’ll want to balance your need for information with the demand it places on your internal resources.

You could opt to do competitor product analysis:

• Once a year. A comprehensive annual review of your competition can help you develop a strategic roadmap for the coming year.

• Once a quarter. Revisiting your competition every few months will help you gain insight into what they are doing in the market (and what you might want to do, too). This can reveal trends.

• Based on specific events. You might decide to start a competitor product analysis if a new product is coming to market, if you see a significant shift in a competitor’s marketing tactics, or if you notice a change in customer habits within your industry.

The goal of a competitor product analysis is to gather information and insight that can help fuel your own strategic decision-making. Strike a balance between staying informed and taxing your internal resources.

A competitor product analysis helps you learn more about your competition’s products and use that information to give your own product a significant market edge.

Here’s a step-by-step guide to help you conduct a thorough analysis and put your information to work.

Research the competition

Start by identifying who your competitors are. Look at your broader product category to identify established brands, up-and-comers, and indirect competitors who might fulfill a similar customer need with a different product.

Your existing customers can help here, too. Ask them what other products they considered before purchasing yours. They might reveal competitors you haven’t initially considered.

Narrow your list of competitors down to a shortlist for a focused product analysis.

Get to know their products

Once you know your competitors, you need to learn about their products. You can do this through hands-on experience and customer feedback.

Using a competitor’s product yourself gives you first-hand insight into its strengths and weaknesses and the customer experience. You can add to your experience by looking at what customers say about the product online. Read reviews and blog posts and do customer interviews to gather more insight. You can then start to look for positive and negative themes within the feedback.

When getting to know a competitor’s product, don’t just focus on its features. Consider the entire user experience. Look at how the product is delivered, the customer support experience, and what marketing efforts surround the product after purchase.

Do a SWOT analysis

Strengths, weaknesses, opportunities, and threats (SWOT) is a familiar framework for many businesses. In this context, you can use it as a tool to analyze your competitors. Create a SWOT matrix for your competitor’s products by identifying their

• Strengths. What is their product doing right? What competitive advantage does their product have?

• Weaknesses. Where is their product falling short? Where are the gaps in function or customer experience?

• Opportunities. What are the current market trends this product is missing out on?

• Threats. Are there emerging products, technologies, or competitors that could steal this product’s customer share?

It can be helpful to compare the SWOT matrix you create for your competitor’s products to a SWOT analysis of your own. This may help you identify areas requiring improvement and capture new market opportunities.

Identify your USP

Once you thoroughly analyze your competitor’s products, return to your own and pinpoint what makes your product stand out. What unique features or benefits do you offer that your competitors don’t? Is it price point, customer experience, additional functions, or something else? What makes you different is your USP, and that’s your secret weapon.

You can use your USP to communicate to potential customers how your product solves their problem in a way the competition can’t. Highlighting your USP can help you craft compelling marketing messages that resonate with your target audience and encourage them to purchase your product instead of your competitor’s.

Report and action your findings

Take everything you learned about your competitor’s products and compile it into a clear and concise report (read more about what you should include in your report in the next section). Don’t just gather data, though. You need to turn your information into actionable insights to get the most benefits out of a competitor product analysis.

Start by compiling all your research. Highlight the most critical findings and their potential impact on your product, and include charts and graphs to make data easier to understand. Then, you can brainstorm actionable strategies based on your findings. You might include steps to enhance your product, new customer segments to market to, or a USP you hadn’t considered before.

Prioritize your action items based on their impact and feasibility. Then, delegate those tasks and set deadlines. Monitor the progress of your actionable items and see how they impact key performance indicators (KPIs) like sales numbers, customer satisfaction, or brand awareness. Revisit your findings periodically and perform new analyses to stay up-to-date on what’s happening with your competition.

When you compile your competitor product analysis into a final report, what should you include?

A comprehensive product analysis should examine several key areas to create a well-rounded picture of the competition’s products and offer a treasure trove of insights into the competitive landscape.

You’ll want to answer these key questions in your report and include the following:

Features

What features do your competitor’s products offer?

• Make a detailed list, categorizing features by functionality to make it easier to compare them against your product.

• Evaluate each feature’s impact on the customer experience. Consider whether the feature feels innovative or intuitive to use. Consider how those features address specific customer pain points.

• Identify areas where your product stands apart or where it may be lacking.

Differentiators

What makes your competitor’s product stand out in the market?

• Look for aspects of the product that set it apart, such as innovation, design, or customer service. Find the elements your competitor believes make up the product’s USP.

• Understanding your competitor’s USP can help you determine your own and how to position yourself as a better solution to potential customers.

SWOT analysis

What are the competitor’s strengths, weaknesses, opportunities, and threats?

• Identify where their product is strongest and where it may be weakest. Recognizing their strengths and weaknesses can help you adapt your marketing approach more effectively.

• Look at what opportunities your competition may be missing or any threats that could impact their market share in the future. These missed opportunities can be an opening for your product’s success.

Pricing

What is your competition’s pricing strategy for their product?

• Look at how they are pricing their product and whether they are using one-time purchases, subscriptions, or other pricing models. How they price their product tells you how they position it in terms of value for the customer.

• Compare their pricing with yours and see if your current pricing strategy aligns with the potential customer’s cost-to-benefit needs.

Target audience

Who is your competitor targeting with their product?

• Compile information on the target audience demographics, such as age and income level. You’ll also want to list psychometric data, such as interests, values, and pain points.

• Look for potential gaps or opportunities in your competitor’s reach and see if there’s an underserved market you can tap into with your product.

Marketing strategies

How is your competitor reaching their target audience?

• Look at their marketing channels, including social media, content marketing, and paid advertising channels. Looking at their overall marketing strategy will show you where they are investing their resources and how they are communicating with their audience.

• Analyze the messaging they use in their marketing campaigns, including their tone, how they position themselves with their target audience, and what emotions they try to evoke in their potential customers.

You need to know what your competitors are doing. Very few products have the luxury of entering an uncrowded market, so competitor product analysis is now the cornerstone of a good business strategy.

By systematically analyzing your competition, you gain a treasure trove of insights. Those insights can help you refine your product and address key customer needs that your rivals might be missing. They also allow you to laser focus on your ideal customer and craft marketing messages that resonate with them.

Remember, too, that competitor product analysis is an ongoing process. As trends shift, new tech hits the market, and customer preferences change, your research on the competitive landscape should evolve, too.