Now that you’ve outlined both your business and marketing objectives for the year, it’s time to get to work writing your business plan. Most of the plan will be quite inward focused for sure, but you also have to look outside your four walls to have a complete perspective for your plan. You have to analyze your competition.
Before you can look in, you first have to look out. Look out for what your competition is doing!
On an annual basis for your marketing plan, you should review your competitors’ major activities, including pricing, policies and product portfolio. Complete an annual review of competitive websites, social channels and packaging. You should actually be tracking this all year long, particularly in industries that change frequently, but during the annual marketing plan you should note your competitors’ major activities from the year.
Most business owners focus on their direct competition -- other brands that offer the exact same services. This makes sense because your customers often consider the differences between what direct competitors offer and are generally focused on the functional attributes of the product, including pricing.
Looking at direct competitors is a basic requirement in any marketing plan, but you should also consider other businesses that may not offer the exact same products or services, but with whom you still compete. While the comparisons aren’t so direct, there is still a competition for time, attention and money.
For example, if you own a small flower shop in town, then you should certainly track the activities of other florists in the area. You should pay attention to online flower retailers as well, because many of your customers may find the convenience of online shopping an advantage over your offerings.
Related: The ABCs of Market Research
But if you think about why people buy flowers, there are other types of competitors that you should follow too. For gift-giving occasions, customers consider many options beyond flowers, so florists compete against other gift shops in town and online. They also compete with restaurants, since people may eat a meal out as a gift. When flowers are used for home décor, there is certainly a wide range of competition including candles, accessories and even silk flowers.
In a way, if you think about it, as a florist you are also competing against any factor that could prevent customers from buying flowers as gifts or for home décor: the weather, busy schedules and changes in attitudes about flowers.
How a small-business owner such as a florist competes against these kinds of options and factors is very different from competing against other florists. You may consider promotional offers and partnerships, for example, to make sure your brand is top of mind when customers are considering gifts and home décor. But that will come later in the marketing plan. For now, we are simply tracking competitive activity.
It is important, however, to not just track your competition, but to draw conclusions about their activity. Make sure you decide how their activity impacts your business, so that you can determine what to do about it in your plan.
Don’t just follow the activity -- note what seems to be working as well. It will help you to figure out what to do for your marketing plan.