With increased globalization and digitalization, the marketplace for your products is more competitive than ever before.
Businesses not only need to work to find their target audiences, they must find unique ways to stake out their niche among thousands of other competitors.
One of the best ways to do this is to be aware of your product competition.
In this post, we'll break down the basics of product competition.
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Product competition is whenever one product is directly competing with another product to fill a particular consumer need. For instance, if two products both solve a consumer's need to cook steak, then these are product competitors.
It's important to note that product competition doesn't necessarily mean that the two products have anything else in common. An oven, grill, sous vide, and frying pan could all be considered product competitors, even though the price, features, form, and function of each vary drastically.
There are, generally speaking, three ways that a business can engage in product competition. By using one of these approaches, a brand can improve its odds of beating out its competitors or at the very least finding its place among the top tier of them.
The first and most challenging way to succeed in product competition is to launch a breakthrough product.
This means offering a product so radical that it can define its own niche.
You will nearly always see this sort of product in tech these days, though it can happen in other industries. McDonald's, for instance, offered a breakthrough product in the restaurant industry and as a result, is synonymous with "fast food." The same goes for Apple with the iPhone and Google with Google Search.
Your business can also succeed in product competition with an improved or iterative product. These are products that add something to a preexisting product yet remain unique to your brand and brand recognition. For instance, introduce a smartphone with a foldable screen or a collapsible water bottle.
Improved products are more predictable than breakthrough products and provide more flexibility. You may start with a product that doesn't differ much from the competing product it's iterating on, but as you continue to improve on it over time, you might establish a unique niche for it that stands on its own.
You can look at Windows and macOS computers in this way. Both started in a very similar position, but over the years have found ways to stand apart and establish separate customer bases.
The simplest and most reliable way to compete with product competitors is with a "Me Too" product. These are products that are in many respects indistinguishable from their competitors, except that they are far more affordable.
These are products that are often referred to as "off-brand" or "private label" products. While this is usually a good way to penetrate the market, these products are rarely innovative and typically have little to no R&D budget.
Indirect competition is similar to product competition in that it's between two products for the same customer. The difference, however, is that indirect competitors have a harder time taking one another's customers.
For example, two competing brands of candles will have to work hard to distinguish themselves as superior in the eyes of the consumer. It will come down to their scents, appearances, and materials in their product competition.
Manufacturers of matchsticks and lighters, on the other hand, are also indirect competitors. Consumers will choose one or the other based on preferences and habits, and less so because of a perceived value difference. They're competing indirectly, because both solve a similar need but in ways that don't cross over in the consumer's purchasing habits.
Smart products have been gaining traction with consumers and manufacturers alike for several reasons. One of the key reasons is that these products tend to be more efficient. They bring in more data, embrace algorithms, and can use energy more efficiently than their predecessors.
Connected products are also more prepared to embrace automation. They have built-in processors, can pair remotely with smartphone apps where automations can be specified, and can take advantage of smart home platforms like HomeKit.
Businesses can also provide better after-sale services with smart products by interacting with them remotely. You can predict when a product will need maintenance and notify the customer, troubleshoot problems more accurately, and more.
Here at airfocus, we offer a variety of tools and services for product-centric businesses. To learn more about our product offerings and the opportunities for your business, check out the blog — it’s jam-packed with juicy product insights and guidance!