Understanding the competition is crucial to a brand’s success. Whether you are developing a brand strategy, marketing plan or new product launch, don’t define the competition too narrowly. Doing so can blind you to opportunities as well as threats.
Instead of standing at ground level in the midst of direct competitors, elevate your view and see what is beyond your category and the typical channels of trade.
Our approach
To gain insights into who your potential competitors are, answer the following questions:
- What eating occasion or usage does our product fit into? Many products have more than one. Baking soda for example, isn’t just for baking, it also cleans and deodorizes.
- Who eats/uses it – adults, kids, students, professionals?
- When do they eat/use it – at work, school, in the car?
- Where do they buy it – in the coffee shop, supermarket, train station?
- What other brands and products satisfy the same eating occasion/usage? Those are potential competitors.
Think outside the category and channel
We take our clients to visit a supermarket and walk the entire store – perimeter and centre store – to open their minds to opportunities. Where can they find products that satisfy the same eating occasion? Where are target customers more inclined to notice the item and make a buying decision? Take salad kits (sans lettuce) for example, isn’t it logical to merchandise them in the produce section?
Places to buy food are ever increasing, from drug stores to gas stations, and even Canadian Tire. Check out alternate channels and formats that cater to your target customer and fulfill the same eating occasion.
Your brand may be focused on retail but don’t overlook food service, where opportunities exist beyond the restaurant segment. Does your target customer frequent coffee shops, university cafeterias, retirement homes, hotels, sports and entertainment venues or places with vending machines?
What is substitutability?
It’s a different perspective that factors in the consumer mindset and can reveal other potential competitors.
In the breakfast cereal category, sales are declining because consumers are substituting foods by switching to other categories such as yogurt and breakfast sandwiches.
Another example is snacks, a broad and rapidly growing category that is no longer limited to potato chips or relegated to the “snack aisle”. Snacking has become an eating occasion as time-pressed on-the-go consumers are skipping meals and replacing them with snacks. In the supermarket, snacking options are storewide. And there’s no shortage of other places to buy them.
To demonstrate how snacks are highly substitutable, consider consumers looking for a savory and crunchy snack. They have a plethora of choices that run the gamut from a burgeoning variety of chips – tortilla, pita, bagel, kale, fried, baked, puffed and so on – to pretzels, crackers, seaweed and parmesan crisps, nuts, pickles, even carrot sticks with dip and hummus with flatbread. What would YOU choose?
Add to that a variety of packaging formats – bag, box, canister, pouch – and sizes – single serve, regular, family and party size, and club pack. All answer various consumer needs and eating occasions.
After exploring alternate categories, channels and formats, you have identified potential competitors. Then they can be narrowed down as primary, secondary and tertiary, in relation to your target customer and brand positioning. The next step is to conduct a competitive analysis and benchmarking to establish the points of difference vis-à-vis the competition.
Applying this bird’s-eye-view approach to identify your competitors provides insights to effectively position your brand.
Wherever your competition is found, your product should be there too!
As a packaged foods specialist, Birgit Blain transforms food into retail-ready products. Her experience includes 17 years with Loblaw Brands and President’s Choice®. Contact her at Birgit@BBandAssoc.com. Check out this recent rebranding project.
© Birgit Blain