Start Your Own Business by Inc The Staff of Entrepreneur Media
Authors: Inc The Staff of Entrepreneur Media
Ads: Link
competitors. Read as many articles as you can on the companies you will be competing with. If you are researching publicly owned companies, contact them and obtain copies of their annual reports. These often show not only how successful a company is, but also what products or services it plans to emphasize in the future.
KNOW THY ENEMY
T here are two ways to define competitors. One is by strategic groups—competitors who use similar marketing strategies, sell similar products or have similar skills. Under this definition, you might group Toyota and Nissan as competitors within the car industry.
The second, less obvious way to group competitors is by customer—how strongly do they compete for the same customers’ dollar? Using this method gives you a wider view of your competitors and the challenges they could pose to your new business.
Suppose you’re considering opening a family entertainment center. If there are no other family entertainment centers in the area, you might think you have no competitors. Wrong! Any type of business that competes for customers’ leisure time and entertainment dollars is a competitor. That means children’s play centers, amusement parks and arcades are all your competitors. So are businesses that, on the surface, don’t appear similar, like movie theaters, bookstores and shopping malls. You could even face competition from nonprofit entities, like public parks, libraries and beaches. In short, anything that families might do in their leisure time is your “competition.”
Don’t limit yourself to the obvious definitions of competition. Start thinking out of the box ... and you will be less likely to get sideswiped by an unexpected competitor.
WARNING
Do you know what your competition is up to? If not, you could be headed for trouble. A study by professors at UCLA and Stanford University showed most business owners are clueless about the competition. Almost 80 percent were blind to their opponents’ actions—which can lead to lost customers and market share.
The answer? Role-play. Put yourself in the competitors’ shoes and analyze their strategies. Visit their stores. Use the internet to dig up as much information as you can about them, their tactics and their goals.
One of the best websites for researching the competition is Hoover’s Online ( hoovers.com ), which, for a fee, provides indepth profiles of more than 43,000 companies. However, there is also free content available, plus you can try a free trial subscription. You can also gather information on competing businesses by visiting them in person. Take along a questionnaire like the “Sample Market Research Competition Questionnaire” on page 97. This one is for a bar/club, but you can customize it for your particular business.
Market Research Methods
In conducting your market research, you will gather two types of data: primary and secondary. Primary research is information that comes directly from the source—that is, potential customers. You can compile this information yourself or hire someone else to gather it for you via surveys, focus groups and other methods. Secondary research involves gathering statistics, reports, studies and other data from organizations such as government agencies, trade associations and your local chamber of commerce.
Associations
Your industry trade association can offer a wealth of information such as market statistics, lists of members, and books and reference materials. Talking to others in your association can be one of the most valuable ways of gaining informal data about a region or customer base.
Look in the Encyclopedia of Associations (Gale Cengage Learning), found in most libraries, to find associations relevant to your industry. You may also want to investigate your customers’ trade associations for information that can help you market to them. Most trade associations provide information free of charge.
e-FYI
In the
KNOW THY ENEMY
T here are two ways to define competitors. One is by strategic groups—competitors who use similar marketing strategies, sell similar products or have similar skills. Under this definition, you might group Toyota and Nissan as competitors within the car industry.
The second, less obvious way to group competitors is by customer—how strongly do they compete for the same customers’ dollar? Using this method gives you a wider view of your competitors and the challenges they could pose to your new business.
Suppose you’re considering opening a family entertainment center. If there are no other family entertainment centers in the area, you might think you have no competitors. Wrong! Any type of business that competes for customers’ leisure time and entertainment dollars is a competitor. That means children’s play centers, amusement parks and arcades are all your competitors. So are businesses that, on the surface, don’t appear similar, like movie theaters, bookstores and shopping malls. You could even face competition from nonprofit entities, like public parks, libraries and beaches. In short, anything that families might do in their leisure time is your “competition.”
Don’t limit yourself to the obvious definitions of competition. Start thinking out of the box ... and you will be less likely to get sideswiped by an unexpected competitor.
WARNING
Do you know what your competition is up to? If not, you could be headed for trouble. A study by professors at UCLA and Stanford University showed most business owners are clueless about the competition. Almost 80 percent were blind to their opponents’ actions—which can lead to lost customers and market share.
The answer? Role-play. Put yourself in the competitors’ shoes and analyze their strategies. Visit their stores. Use the internet to dig up as much information as you can about them, their tactics and their goals.
One of the best websites for researching the competition is Hoover’s Online ( hoovers.com ), which, for a fee, provides indepth profiles of more than 43,000 companies. However, there is also free content available, plus you can try a free trial subscription. You can also gather information on competing businesses by visiting them in person. Take along a questionnaire like the “Sample Market Research Competition Questionnaire” on page 97. This one is for a bar/club, but you can customize it for your particular business.
Market Research Methods
In conducting your market research, you will gather two types of data: primary and secondary. Primary research is information that comes directly from the source—that is, potential customers. You can compile this information yourself or hire someone else to gather it for you via surveys, focus groups and other methods. Secondary research involves gathering statistics, reports, studies and other data from organizations such as government agencies, trade associations and your local chamber of commerce.
Associations
Your industry trade association can offer a wealth of information such as market statistics, lists of members, and books and reference materials. Talking to others in your association can be one of the most valuable ways of gaining informal data about a region or customer base.
Look in the Encyclopedia of Associations (Gale Cengage Learning), found in most libraries, to find associations relevant to your industry. You may also want to investigate your customers’ trade associations for information that can help you market to them. Most trade associations provide information free of charge.
e-FYI
In the
Similar Books
