How precise are your survey results? Use our Margin of Error Calculator to see how reliable your data is and understand how much your results could vary.
What is a Margin of Error Calculator?
A Margin of Error Calculator helps you understand how much your survey results might change if you surveyed more people. It shows the possible difference between the results you got and what the true answer might be for the whole population. Example: If 60% of people say they like a product with a ±5% margin of error, the actual percentage could be anywhere between 55% and 65%. A smaller margin of error means more precise results, but it usually requires a larger sample size. This tool helps businesses, researchers, and marketers measure the reliability of their data before making important decisions.
Calculate your margin of error
What Does the Result Mean?
The margin of error tells you how much your survey results might change if you surveyed more people.
✔ Smaller margin of error (e.g., ±3%) → More accuracy, but requires more responses. ✔ Larger margin of error (e.g., ±5% or more) → Less precision but needs fewer responses.
Step 1: Enter your Sample Size—The number of people who completed your survey. More responses = better accuracy. For example, if 250 people answered your survey, enter 250 as your sample size.
Step 2: Enter your Population Size – This is not the population of a place. It is the total number of people in the group you want to study. If unsure, use an estimate. For example, if you’re surveying employees at a company with 5,000 staff members, your population size is 5,000.
Step 3: Pick your Confidence Level – How sure do you want to be about your results? Common choices are 90%, 95%, or 99%. A higher confidence level means more accuracy but requires more responses. For example, a 95% confidence level means that if you repeated the survey 100 times, you’d get similar results 95 times.
Step 4: View your Margin of Error—The tool will show your Margin of Error, the possible range by which your results may vary. For example, if 60% of people in your survey like a product and your margin of error is ±4%, the actual percentage could be anywhere between 56% and 64% in the full population.
Why Is It Important to Calculate the Margin of Error?
✔ Ensures Accuracy – Helps you understand how close your survey results are to the true population data. ✔ Builds Confidence – A lower margin of error means you can trust your findings when making important decisions. ✔ Guides Sample Size – Shows whether you need more responses to improve precision. ✔ Detects Meaningful Differences – Helps determine whether small survey result changes are real or just random variations. ✔ Essential for Business and Research – Used in market research, healthcare studies, polling, and decision-making to ensure reliable insights.
Want to create better surveys? Learn how to ask the right questions and get reliable answers in our market research survey guide.
Who Can Use This Calculator?
✔ Market Research and Businesses – Check customer surveys’ reliability before making decisions. ✔ Academic and Social Research – Ensure studies accurately represent populations for research and policy analysis. ✔ Healthcare and Clinical Trials – Determine how many patients are needed for valid medical research. ✔ Employee and Workplace Surveys – Gather reliable employee insights for engagement and policy decisions. ✔ Government and Public Policy – Calculate how many people are needed for voter research and census studies. ✔ Media and Advertising – Measure public opinion and ad effectiveness with accurate sample sizes.
Now that you know your margin of error, get expert insights to maximize your research!
Need help designing your survey or analyzing results? As a leading market research agency, we provide in-depth insights to drive better decisions. Contact us today to discuss your research needs!
How precise are your survey results? Use our Margin of Error Calculator to see how reliable your data is and understand how much your results could vary.
What is a Sample Size Calculator?
A Sample Size Calculator helps you determine the number of people you need to survey for reliable results. By entering key details like population size, confidence level, and margin of error, you can calculate the ideal sample size for accurate research findings. For example, If you’re surveying 10,000 customers and want 95% confidence with a 5% margin of error, the calculator will tell you how many responses you need to ensure trustworthy insights.
Calculate your sample size
What Does the Result Mean?
The sample size calculation tells you how many people you must survey to get reliable results. If the calculator suggests 400 respondents, that means surveying at least 400 people will give you statistically reliable results within your chosen margin of error. A larger sample size increases accuracy, while a smaller one may produce less precise results. Use this number to plan your survey with confidence!
Tips: Want more precision? Lower the margin of error, but this will increase the required sample size. Not sure how many people to survey? Try different confidence levels and margin of error settings to see how they affect sample size.
Now that you have your sample size, what’s next? Need to check how precise your results are? Use our Margin of Error Calculator to measure the accuracy of your survey.
How to Use the Sample Size Calculator
Step 1:Enter your Population Size – This is not the total population of a country or city. It’s the specific group you want to study (e.g. school students between the ages of 10 to 16 in the U.S.). If you’re surveying customers of a particular store, the population size is the total number of customers who shop there, not the entire city.
Step 2: Choose your Confidence Level – Select how sure you want to be about your results (90%, 95%, or 99%). A higher confidence means greater certainty but requires more responses to reduce errors. For example, a 95% confidence level is the standard for most surveys, but if you choose 99%, you’ll need a larger sample size for higher accuracy.
Step 3: Select your Margin of Error – The range within which the true result may vary. Choose how much your results might vary from the true answer. ✔ Smaller margin (±3%) → More accurate results but requires more responses. ✔ Larger margin (±5% or more) → Less precise but needs fewer responses. For example, If 60% of people like a product and your margin of error is ±3%, the real number could be between 57% and 63%. A ±5% margin means it could be between 55% and 65%.
Step 4:View Your Sample Size – The tool will tell you how many responses you need for reliable data.
Step 5: Plan your survey: Use this number to ensure your research is accurate and meaningful before launching your survey.
Why Does Sample Size Matter?
Getting the right sample size is key to accurate and reliable results. Here’s why it’s important:
✔ Accuracy – Reduces errors and makes your survey results more reliable. ✔ Efficiency – Saves time and resources by collecting just the right amount of data. ✔ Trustworthy Insights – Ensures your findings reflect the whole population, not just random chance.
Want to ensure your qualitative research captures the right insights?
Explore how different approaches impact your study and discover best practices for gathering meaningful data in ourexpert guide on sampling methods.
Who Can Use This Calculator?
✔ Market Research and Businesses – Find the right number of customers to survey for product feedback and market trends. ✔ Academic & Social Research – Ensure studies accurately represent populations for research and policy analysis. ✔ Healthcare & Clinical Trials – Determine how many patients are needed for valid medical research. ✔ Employee & Workplace Surveys – Gather reliable employee insights for engagement and policy decisions. ✔ Government & Public Policy – Calculate voter research and census study respondents. ✔ Media & Advertising – Measure audience opinions and ad effectiveness with accurate sample sizes.
Now that you have your sample size get expert insights to maximize your survey’s design. We provide in-depth insights to drive better decisions as a leading market research agency.
Conducting online research in the Philippines presents unique opportunities and challenges. The country has one of the highest rates of internet and social media usage globally. According to the Digital 2023 report by We Are Social and Hootsuite, Filipinos spend an average of 9 hours and 14 minutes online daily, maintaining their position among the most active internet users worldwide.
Furthermore, 82.4% of the population, or about 92.05 million Filipinos, are internet users, and social media usage is widespread, with 88.7% of internet users actively engaging on these platforms.
Despite this high level of digital engagement, the Philippines faces distinct challenges in adopting online research methodologies. Issues such as relatively slow internet speeds, frequent online scams, and a cultural preference for face-to-face communication create significant barriers. However, these challenges also open the door to innovative research approaches that effectively engage the Filipino audience through tailored and technologically advanced solutions.
Overview of Internet Usage in the Philippines
The latest findings highlight that Filipinos continue to lead globally in terms of internet and social media usage. Filipinos spend an average of 9 hours and 14 minutes online daily, maintaining their position as some of the most active internet users worldwide. The report also shows that internet penetration in the Philippines has reached 82.4%, with approximately 92.05 million Filipinos active internet users. Moreover, social media engagement is remarkably high, with 88.7% of internet users actively participating on social platforms.
Demographics of Online Users
The digital landscape in the Philippines showcases a diverse range of online users across different demographics. While the most prominent social media user group is 18-24, there are distinct patterns and preferences among other age groups.
Young Adults (18-24)
This group is the most active on social media, driven by college students and young professionals. They frequently use platforms like Facebook, Instagram, and TikTok for personal, academic, and professional purposes. Their mobile-first approach is evident, with a significant 69% accessing Facebook exclusively through mobile devices.
Millennials
Millennials also have a strong online presence, engaging in social media, e-commerce, and professional networking. They use platforms like LinkedIn, Instagram, Twitter, and Facebook. This group values mobile accessibility, but many still utilize desktops for work-related activities.
Generation X
Gen X users are active on social media, but their usage patterns differ slightly. They prefer Facebook and YouTube, often to stay connected with family and consume video content. Mobile usage is prevalent, but desktops are still commonly used, especially for work and news consumption.
Boomers
Baby Boomers are the least represented on social media but are increasingly adopting platforms like Facebook to stay connected with friends and family. Their internet usage is more balanced between mobile and desktop, reflecting a gradual adaptation to new technologies.
Gender Differences
Regarding gender, Filipino women are slightly more active on social media than men. For example, Facebook’s ad audience data shows that 53.4% of users are female, while 46.6% are male. This trend is consistent across other social platforms, with women engaging more frequently in social networking and online shopping.
Rural vs. Urban
Urban users in the Philippines have better access to high-speed internet and are likelier to use various online services, including e-commerce, online banking, and streaming services. In contrast, rural users face challenges such as slower internet speeds and limited digital infrastructure access, which affect their online activity. However, mobile phones are a common denominator, bridging the gap and providing rural populations with access to social media and basic online services.
How the Philippines compares to other Asian countries
Aspect
Philippines
Singapore
Indonesia
Malaysia
China
Internet Usage
High daily usage (9 hours 14 minutes)
Moderate usage (7 hours 2 minutes)
High daily usage (8 hours 36 minutes)
High daily usage (8 hours 5 minutes)
High daily usage (6 hours 59 minutes)
Internet Penetration
82.4%
92%
73.7%
89.6%
70.1%
Mobile Penetration
High, mobile-first internet users
Very high, extensive smartphone penetration
Very high, dominant mobile users
Very high, strong mobile usage
Extremely high, mobile-first society
E-commerce Behavior
Rapid growth, driven by mobile platforms
Mature market, high trust in online payments
Growing rapidly, mobile-driven
Growing steadily, high mobile transactions
Highly advanced, dominant global player
Popular Platforms
Facebook, YouTube, Instagram, TikTok
WhatsApp, Facebook, Instagram, LinkedIn
WhatsApp, Instagram, Facebook, Tokopedia
WhatsApp, Facebook, Instagram, Lazada
WeChat, Douyin (TikTok), Weibo, Taobao
Payment Preferences
Mobile wallets (GCash, PayMaya)
Credit cards, e-wallets (GrabPay, PayNow)
Mobile wallets (GoPay, OVO)
E-wallets (Touch ‘n Go, Boost)
Mobile payments (Alipay, WeChat Pay)
Cultural Preferences
High value on face-to-face interaction
Efficiency and privacy valued
Community-oriented, face-to-face preferred
Balance of traditional and modern practices
High trust in digital ecosystems
Current Research Methodologies in the Philippines
The adoption of online research methodologies in the Philippines has been relatively slow compared to other countries. Despite the high level of internet and social media usage, several factors contribute to this hesitation.
Preference for Offline Face-to-Face Recruitment and Interviews
Filipinos prefer offline, face-to-face recruitment and interviews for market research. This preference is rooted in cultural and practical reasons, making traditional methods more popular despite the potential benefits of online alternatives.
Concerns Over Online Scams, Identity Theft, and Bank Fraud
One of the main reasons for the slow adoption of online research methodologies is the widespread concern over online scams, identity theft, and bank fraud. The Philippines has seen a significant number of cybercrime cases, leading to a general mistrust of online transactions and interactions. This apprehension makes respondents hesitant to participate in online surveys or interviews, fearing their personal information might be compromised.
Importance of Personal Face-to-Face Communication in FilipinoCulture
Filipino culture places a high value on personal, face-to-face communication. The ability to gauge the sincerity and trustworthiness of the person you speak with is crucial. Face-to-face interactions allow for better rapport-building and more genuine responses, which is essential in qualitative research. This cultural trait makes offline in-person interviews and focus groups more effective and preferred in capturing accurate and honest feedback.
While there are clear benefits to adopting online research methodologies, such as efficiency and broader reach, the Philippines’ unique challenges and cultural preferences have maintained the dominance of traditional offline methods. Researchers must navigate these factors carefully to design effective studies that respect local concerns and cultural values.
Bridging the Gap: Kadence Philippines’ Approach
Kadence Philippines has proactively addressed the challenges of online research methodologies by adopting various technology-based solutions. These innovations aim to enhance data collection accuracy and improve respondent engagement while respecting local preferences and concerns.
Use of Online Panels and Tablets for Face-to-Face Interviews
Kadence Philippines leverages online panels to reach a broad and diverse audience. Online panels allow researchers to conduct surveys with pre-recruited respondents who have agreed to participate in research studies.
This approach ensures higher response rates and reliable data from targeted demographics. Additionally, during face-to-face interviews, the use of tablets enables real-time data uploads. This technology allows for instant data collection and processing, ensuring the accuracy and timeliness of the information gathered. Incorporating GPS tracking and recording audio or video enhances the quality and credibility of the data collected.
Instant Messaging Apps for Low to mid-economic-class respondents
Recognizing the widespread use of mobile phones in the Philippines, Kadence Philippines suggests using instant messaging apps such as Facebook Messenger, Viber, Skype, and WeChat to engage respondents from low to mid-income classes. These platforms are familiar and easily accessible to many Filipinos, making them ideal for conducting surveys and interviews. Instant messaging apps provide a convenient and non-intrusive way for respondents to participate in research, ensuring higher engagement and more accurate responses.
By embracing these technology-based solutions, Kadence Philippines effectively bridges the gap between traditional and online research methodologies. These innovative approaches address the challenges of online research in the country and align with the Filipino market’s cultural and technological landscape.
The Potential of Online Communities for Research
Online communities are valuable for connecting younger demographics, particularly millennials and Gen Z, in the Philippines. These age groups are highly active online and comfortable sharing their opinions and experiences on digital platforms. Online communities can facilitate in-depth engagement, allowing researchers to gather rich, qualitative data.
Suitability for Connecting with Millennials and Gen Z
Millennials and Gen Z are digital natives who spend a significant amount of their time online. They are accustomed to using social media and other online platforms to communicate, share, and engage with content. This makes them ideal participants for online communities, where they can interact in a familiar and comfortable environment. Research shows that these age groups are more likely to participate in online discussions and share their views openly than older generations.
Using Facebook Groups for Straightforward Projects
For straightforward customer understanding projects, Facebook Groups can be a practical and effective solution. Facebook remains one of the most popular social media platforms in the Philippines, with a high penetration rate among internet users. Creating a private Facebook Group for research purposes allows participants to engage in discussions, respond to surveys, and provide feedback in a familiar setting. This method is cost-effective and can yield valuable insights quickly.
Sophisticated Platforms for Complex Projects
More sophisticated platforms are necessary for more complex projects, such as ad or concept testing. Tools like Recollective, Qualtrics, and Vision Critical offer advanced features designed specifically for research. These platforms provide better security, data analysis tools, and capabilities to handle larger and more diverse participant groups. They are beneficial for projects that require detailed tracking of responses, multimedia interactions, and higher levels of participant engagement.
Online Depth Interviews and Focus Group Discussions
Conducting online in-depth interviews and focus group discussions in the Philippines is feasible but requires careful consideration of the technological and cultural context.
Feasibility of Online Interviews and Focus Groups
Online interviews and focus groups are increasingly viable in the Philippines, especially given the high internet penetration and widespread use of social media and communication platforms. These methods allow researchers to reach participants across different geographic locations, reducing the need for travel and logistics. However, the success of these methods depends on the availability of reliable internet connections and participants’ comfort with technology.
Recommendation for Video Chats
Video chats are highly recommended to bridge the lack of personal presence inherent in online methods. Video calls can replicate the face-to-face interaction that is culturally significant in the Philippines. Platforms like Zoom, Microsoft Teams, and Google Meet are practical tools for conducting these sessions. They allow for real-time interaction, enabling researchers to observe non-verbal cues and build rapport with participants, which is crucial for obtaining honest and detailed responses.
Need for Stable Internet Connections
Stable internet connections are essential for smoothly executing online in-depth interviews and focus group discussions. This is particularly important for B2B projects and high socio-economic class (SEC) individuals, who often have access to better internet infrastructure. For participants with less reliable connectivity, contingency plans such as recording responses for asynchronous review or using text-based methods can be considered to ensure data quality and completeness.
Embracing the New Normal
The COVID-19 pandemic has profoundly impacted the digital landscape in the Philippines, accelerating digital transformation across various sectors. As a result, there has been a significant shift from a predominantly cash-based, face-to-face economy to one that increasingly relies on digital finance, messaging platforms, and telecommuting.
Impact of COVID-19 on Digital Transformation
The pandemic forced many businesses and consumers to adopt digital solutions out of necessity. Lockdowns and social distancing measures led to a surge in online transactions, with digital finance platforms experiencing unprecedented growth. For instance, GCash and PayMaya, two of the leading mobile wallet providers in the Philippines, reported substantial increases in user adoption and transaction volumes during the pandemic.
Shift to Digital Finance, Messaging Platforms, and Telecommuting
With the need to minimize physical contact, Filipinos turned to digital finance solutions for everyday transactions. This shift was facilitated by the rapid adoption of mobile wallets and online banking services, enabling users to pay bills, transfer money, and shop online securely. Messaging platforms like Facebook Messenger, Viber, and WhatsApp increased usage as people sought to stay connected while adhering to social distancing guidelines.
The pandemic accelerated the trend toward telecommuting. Many companies adopted remote work policies, leveraging tools like Zoom, Microsoft Teams, and Google Workspace to maintain productivity and communication. This shift ensured business continuity and highlighted the potential for more flexible work arrangements.
Increased Feasibility of Online Research Methodologies
The necessity of a stable internet connection for work, education, and daily activities has increased the feasibility of online research methodologies in the Philippines. As more households invest in better internet infrastructure, the reliability of online surveys, interviews, and focus groups has improved. Researchers can now reach a broader audience and gather data more efficiently than before.
Potential Long-Term Shift in Research Methodologies Post-Pandemic
The changes brought about by the pandemic will likely have a lasting impact on research methodologies in the Philippines. While traditional face-to-face methods will remain important, the success of online approaches during the pandemic has demonstrated their viability and benefits. Researchers can now integrate a hybrid model that combines online and offline methods, leveraging the strengths of each to obtain comprehensive and accurate data.
As digital literacy continues to improve and internet access becomes more widespread, the acceptance and effectiveness of online research methodologies are expected to grow. This shift could lead to more innovative and adaptive research practices that better reflect the evolving digital landscape of the Philippines.
Final Thoughts
Conducting online research in the Philippines offers immense potential due to the high internet and social media usage among its population. Despite challenges such as slow internet speeds, concerns over online scams, and a cultural preference for face-to-face communication, the adoption of online methodologies is growing. Kadence Philippines has successfully implemented technology-based solutions, utilizing online panels, tablets, and instant messaging apps to bridge the gap. The impact of COVID-19 has further accelerated digital transformation, making online research more feasible and effective.
The Philippines is ready to embrace changes in research methodologies, integrating both traditional and online approaches to achieve comprehensive and accurate data. As digital literacy and internet access continue to improve, the acceptance and effectiveness of online research methodologies are expected to grow, paving the way for more innovative and adaptive research practices.
Download our detailed guide here to gain a deeper understanding of online market research approaches in various Asian countries. This resource offers essential insights and strategies to help you navigate the diverse digital landscapes of Asia.
Sun Tzu once said, “Know thy self, know thy enemy. A thousand battles, a thousand victories.” While the quote from this ancient Chinese military strategist is about tactical warfare, it also highlights the importance of understanding your place in the market and the competition you face.
In today’s world of global e-commerce, where sales amounted to over $5.7 trillion in 2022, businesses must conduct a competitive analysis to gain an edge. This article will delve into the essential steps of competitive analysis and show you how to leverage the insights gained to enhance your brand or product’s market position. Whether you’re a marketer, brand manager, or product manager, this post will provide the knowledge and tools to evaluate your business’s performance and stay ahead of the competition.
Identifying Competitors
The first step in conducting a competitive analysis is identifying your competitors. This includes direct competitors who offer similar products or services and indirect competitors who offer substitutes or alternatives to your offerings.
A direct competitor is a business that offers similar products or services and targets the same customer segments as another business. Direct competitors are often in direct competition for customers and market share. For example, Nike and Adidas are direct competitors in the athletic footwear and apparel market. Both companies offer similar products, such as running shoes, athletic wear, and accessories, and target the same customer segments, including athletes and fitness enthusiasts.
An indirect competitor is a business that offers products or services that are not the same as another business but still competes for customers in the same market. Indirect competitors can offer substitute products or services or cater to a slightly different customer segment. For example, Uber and public transportation services are indirect competitors. While they offer different products and services, they still compete for customers who need to travel from one place to another. In some cases, customers may choose to take public transportation instead of Uber, or vice versa, depending on convenience, cost, and availability.
One way to identify your competitors is to research your industry and market. Look for companies with similar products or services and a similar target audience. You can also ask your customers who they consider as alternatives to your brand or product.
Another method is to use online tools such as Google Trends, SEMrush, or SimilarWeb. These tools allow you to analyze the search volume and traffic of your competitors’ websites and their social media presence and marketing tactics.
Once you have identified your competitors, you must classify them and understand their strengths and weaknesses. This will help you gain insights into their strategies and how they are positioning themselves in the market. For example, if you’re a fitness app, your direct competitors may include other fitness apps such as Fitbit and MyFitnessPal, while your indirect competitors may include gyms or personal trainers.
Understanding your competitors’ pricing strategies, marketing tactics, and features can help you differentiate your brand and attract more customers. A Harvard Business Review article emphasizes the importance of understanding competitors: “It’s not enough to know who your competitors are. You need to know how they think, what drives them, their goals and values, and their strengths and weaknesses.” By conducting a thorough competitive analysis, you can gain valuable insights into your competitors and use them to improve your business strategy.
Analyzing Competitors
Once you have identified your competitors, the next step is thoroughly analyzing their business strategy. This includes researching their products or services, pricing strategies, marketing tactics, and overall market position.
One way to analyze your competitors is to visit their websites and social media profiles. Look at the design and layout of their website, the features of their products or services, and their pricing strategy. Also, pay attention to their social media presence, including the type of content they share, how often they post, and their engagement with customers.
Another method is to purchase or use your competitors’ products or services. This will give you firsthand experience with their offerings and allow you to identify areas where you can differentiate your brand or product.
Additionally, you can conduct a SWOT analysis of your competitors. SWOT stands for strengths, weaknesses, opportunities, and threats. You can identify areas to improve your business strategy by analyzing your competitors’ strengths and weaknesses. Similarly, you can adapt your approach to changing market conditions by identifying opportunities and threats.
For example, let’s say you’re a restaurant owner, and your competitor is a nearby restaurant that offers similar cuisine. By analyzing their pricing strategy, menu offerings, and customer reviews, you discover they offer a more extensive menu and are priced slightly higher than your restaurant. You can use this information to differentiate your brand by providing a unique menu with higher-quality ingredients at a competitive price.
Evaluating Your Position
After analyzing your competitors, you must compare your position and strengths. This will help you identify areas where you can improve your business strategy and differentiate your brand or product from the competition.
One way to evaluate your position is to conduct a SWOT analysis of your business. This includes identifying your strengths, weaknesses, opportunities, and threats. By analyzing your strengths and weaknesses, you can identify areas to improve your business strategy. Similarly, you can adapt your strategy to changing market conditions by identifying opportunities and threats.
Another method is to analyze your customer feedback and reviews. Look for areas where your customers are particularly satisfied and where they think you can improve. This will give you insights into your strengths and weaknesses and help you understand how you’re perceived in the market.
Additionally, you can evaluate your pricing strategy and marketing tactics. Are you offering competitive prices for your products or services? Are your marketing efforts effective in reaching your target audience? By evaluating these aspects of your business, you can identify areas to improve and differentiate your brand.
For example, let’s say you’re a tech company that offers a productivity app. After analyzing your competitors, you may find that your app offers similar features to your competitors but at a lower price point. You can use this information to differentiate your brand by emphasizing the value of your app and targeting price-sensitive customers.
As business strategist Jay Abraham once said, “Your competitors can teach you everything you need to know about your own customers.” By evaluating your position and strengths compared to your competitors, you can gain valuable insights that will help you improve your business strategy and attract more customers.
Creating an Action Plan
Once you have conducted a competitive analysis and evaluated your position, it’s time to create an action plan leveraging the insights gained. An action plan should be a detailed roadmap of the steps you need to take to improve your brand or product’s market position.
One way to create an action plan is to prioritize the insights gained from your competitive analysis and evaluation. For example, if you’ve identified a weakness in your pricing strategy, you may prioritize adjusting your prices to be more competitive. Similarly, if you’ve identified an opportunity to target a new customer segment, you may prioritize developing a new marketing campaign to appeal to that segment.
Another method is to set specific goals and metrics to track progress. For example, if you’ve identified a weakness in your customer service, you may aim to improve your customer satisfaction ratings by a certain percentage within a specific timeframe.
It’s also important to allocate resources and assign responsibilities to implement the action plan effectively. This includes assigning tasks to specific team members, determining the budget required, and establishing timelines for each step of the plan.
A report by Forbes emphasizes the importance of having a concrete action plan, stating, “The key to success in competitive analysis is to turn insights into action.” By creating a detailed action plan, you can ensure that the insights gained from the competitive analysis are used to drive tangible results and improvements to your business.
The Importance of Regular Competitive Analysis
Competitive analysis is not a one-time event but a continuous process that should be conducted regularly. The market constantly changes, and new competitors and trends can emerge at any time. Regular competitive analysis can help businesses stay ahead and adapt their strategy to changing market conditions.
One way to stay on top of the competition is to set up a system for continuously monitoring and analyzing your competitors. This includes tracking their pricing strategy, product offerings, marketing campaigns, and customer feedback. By monitoring your competitors, you can identify changes in the market and adjust your strategy accordingly.
Regular competitive analysis also helps businesses identify potential threats and opportunities in the market. For example, if a new competitor enters the market, regular analysis can help you identify its strengths and weaknesses and adjust your strategy to compete effectively.
Additionally, regular competitive analysis can help businesses identify areas to improve their strategy. By analyzing your competitors’ strengths, you can identify areas where you may fall short and adjust your strategy accordingly.
A Real-Life Example of Competitive Analysis
Let’s take a look at a real-life example of how competitive analysis can help brands improve their market position:
Airbnb and Hotels
Airbnb and hotels are two accommodation options for travelers. Airbnb, founded in 2008, offers an online platform for people to rent out their homes, apartments, and other spaces to travelers. On the other hand, hotels offer traditional accommodation in a dedicated facility with various amenities and services.
SWOT Analysis of Airbnb
Strengths:
Unique experiences: Airbnb offers unique and authentic experiences for travelers by allowing them to stay in local homes and neighborhoods.
Low prices: Airbnb offers lower prices than traditional hotels, making it an attractive option for budget-conscious travelers.
Innovative technology: Airbnb uses innovative technology, such as its search algorithm and messaging system, to enhance the customer experience.
Weaknesses:
Quality control: Airbnb’s reliance on individual hosts can lead to inconsistent quality and standards across its listings.
Legal and regulatory challenges: Airbnb has faced legal and regulatory challenges in several cities, which can limit its growth opportunities.
Limited services: Airbnb offers limited services compared to hotels, such as room service and housekeeping.
Opportunities:
Expansion into new markets: Airbnb can expand its offerings to include new types of accommodations, such as boutique hotels or bed and breakfasts.
Partnerships with tourism boards: Airbnb can partner with tourism boards to promote local tourism and offer unique experiences.
Personalization: Airbnb can use data and technology to personalize its offerings and customer recommendations.
Threats:
Competition from traditional hotels: Traditional hotels are increasing their focus on offering unique and authentic experiences to compete with Airbnb.
Safety concerns: Safety concerns like theft and vandalism can impact the customer experience and damage Airbnb’s reputation.
Economic downturns: Economic downturns can impact travel and tourism, impacting Airbnb’s business.
SWOT Analysis of Hotels:
Strengths:
Established brand reputation: Hotels have a well-established brand reputation and are a trusted accommodation option for travelers.
Wide range of services and amenities: Hotels offer a wide range of services and amenities, such as room service and housekeeping, to enhance the customer experience.
Consistent quality: Hotels offer consistent quality and standards across their properties.
Weaknesses:
High prices: Hotels can be more expensive than other accommodation options, making them less attractive to budget-conscious travelers.
Lack of personalization: Hotels can be less personalized than Airbnb, as they offer a more standardized experience.
Limited local experiences: Hotels can lack the unique local experiences that Airbnb offers, as they are often located in tourist areas.
Opportunities:
Focus on unique experiences: Hotels can offer unique and authentic experiences to compete with Airbnb.
Partnerships with local businesses: Hotels can partner with local companies to offer unique experiences and enhance the customer experience.
Personalization: Hotels can use data and technology to personalize their offerings and customer recommendations.
Threats:
Competition from Airbnb: Airbnb’s unique offerings and lower prices can attract customers away from traditional hotels.
Economic downturns: Economic downturns can impact travel and tourism, impacting hotels’ business.
Safety concerns: Safety concerns, such as crime and terrorism, can impact the customer experience and damage hotels’ reputations.
When Airbnb entered the market, it disrupted the traditional hotel industry. Initially, hotels underestimated Airbnb’s impact and did not conduct a competitive analysis to understand the company’s strategy.
However, as Airbnb’s popularity grew, hotels began recognizing the threat and adapted their strategy to compete. Hotels started to offer more unique and local experiences to attract customers, a strategy that Airbnb had successfully implemented. Additionally, hotels invested in technology to enhance the guest experience and offer more personalized service.
Some hotels also started to offer short-term rentals and home-sharing services to compete with Airbnb directly.
One example of a hotel that successfully adapted its strategy to compete with Airbnb is Marriott International. In 2019, Marriott launched its Homes & Villas program, offering high-end home rentals in more than 100 destinations worldwide. By providing unique and local experiences, personalized service, and home-like amenities, Marriott was able to attract customers who might otherwise have booked with Airbnb.
Overall, the success of Airbnb has demonstrated the importance of conducting competitive analysis and staying up-to-date on industry trends and developments. By understanding the competition and adapting their strategy accordingly, brands can stay ahead of the curve and drive business success.
Lessons Learned
The case study of Airbnb vs. hotels provides valuable lessons for businesses in any industry. Here are a few key takeaways:
Disruption can come from unexpected sources: Hotels initially underestimated Airbnb’s impact and did not conduct competitive analysis to understand the company’s strategy. As a result, they were caught off guard when Airbnb disrupted the industry.
Adaptability is key: Hotels eventually adapted their strategy to compete with Airbnb, offering more unique and local experiences to attract customers. This shows the importance of adaptability and willingness to change your strategy when faced with new competitors or market conditions.
Customer preferences are changing: Airbnb’s success is partly due to customers’ changing preferences, who are increasingly seeking unique and authentic experiences. This highlights the importance of understanding your customers’ preferences and adapting your strategy to meet their needs.
Innovation can create new opportunities: Airbnb’s success has created new opportunities for other businesses, such as property management companies specializing in short-term rentals. This shows the potential for innovation to develop new business models and opportunities in any industry.
In conclusion, the case study of Airbnb vs. hotels highlights the importance of conducting competitive analysis, being adaptable, understanding customers’ preferences, and embracing innovation. By applying these lessons to your brand, you can stay ahead of the competition and drive business success.
Examples of Successful Competitive Analysis
Competitive analysis is a powerful tool that can help businesses gain a competitive advantage in their industry. Here are a few examples of companies that have successfully used competitive analysis to improve their strategy and gain a stronger market position:
Coca-Cola vs. Pepsi: For decades, Coca-Cola and Pepsi have been locked in fierce competition for market share. In the early 2000s, Coca-Cola conducted a comprehensive competitive analysis of Pepsi, analyzing everything from its marketing campaigns to its pricing strategy. As a result, Coca-Cola developed a new marketing campaign emphasizing the brand’s history and nostalgia, which helped them gain a stronger foothold in the market.
Netflix vs. Blockbuster: In the early 2000s, Netflix was a relatively unknown startup that offered a subscription-based DVD rental service. At the time, Blockbuster was the dominant player in the video rental market. However, Netflix conducted a thorough competitive analysis of Blockbuster, identifying weaknesses in its strategy and opportunities for growth. Netflix then shifted its focus to streaming video, which ultimately allowed them to overtake Blockbuster and become the dominant player in the market.
Amazon vs. Barnes & Noble: In the 1990s, Barnes & Noble was the largest bookstore chain in the United States. However, with the rise of e-commerce, Amazon quickly emerged as a formidable competitor. Amazon conducted a thorough competitive analysis of Barnes & Noble, identifying opportunities to improve their online shopping experience and offer a wider selection of products. As a result, Amazon was able to outmaneuver Barnes & Noble and become the dominant player in the book industry.
Tools and Resources for Conducting Competitive Analysis
Conducting competitive analysis can be a complex and time-consuming process. Fortunately, many tools and resources are available to help brands conduct competitive analysis effectively. Here are a few examples:
Competitive analysis templates: Many business and marketing websites offer free or paid templates for conducting competitive analysis. These templates provide a framework for identifying and analyzing your competitors’ strengths and weaknesses and opportunities and threats in the market.
Industry reports: Industry reports provide valuable data and insights into the competitive landscape of a particular industry. These reports may include information on market share, pricing trends, consumer preferences, and more. They can be purchased from market research firms or industry associations.
Online tools: Many online tools are available to help businesses conduct competitive analysis, such as SEMrush for analyzing online advertising and search engine rankings and SimilarWeb for analyzing website traffic and engagement.
Social media analytics: Social media platforms offer valuable data on customer sentiment, engagement, and trends. You can gain insights into your marketing strategy and customer preferences by analyzing your competitors’ social media presence.
Market Research Agencies: Hiring an expert market research agency can be a valuable investment for businesses that lack the expertise or resources to conduct competitive analysis in-house. Agencies can provide a deep understanding of your industry and competitors and insights into emerging trends and opportunities.
Tips for Staying Ahead of the Competition
Conducting competitive analysis is an essential part of developing a successful business strategy. However, it’s not enough to simply analyze your competitors – you also need to use the insights gained to stay ahead of the competition. Here are a few tips for staying ahead:
Stay up-to-date on industry trends: Keeping up with the latest trends and developments in your industry can help you anticipate changes in the market and stay ahead of the competition. Subscribe to industry newsletters, attend conferences and trade shows, and follow industry leaders on social media to stay informed.
Focus on customer needs: While it’s essential to understand your competitors’ strategies, it’s even more critical to understand your customers’ needs and preferences. Conducting market research and gathering customer feedback can help you tailor your products and services to meet their needs and gain a competitive edge.
Invest in innovation: Innovation can help you differentiate your business and stay ahead of the competition. Invest in research and development, experiment with new technologies and business models, and encourage a culture of innovation within your organization.
Build strong partnerships: Building strong partnerships with other businesses can help you expand your reach and offer more value to your customers. Look for opportunities to partner with companies that complement your own, such as suppliers, distributors, or complementary service providers.
Embrace change: Finally, it’s essential to be flexible and adaptable in the face of change. The business landscape is constantly evolving, and it’s important to be willing to pivot your strategy when necessary to stay ahead of the competition.
Challenges and Limitations of Competitive Analysis
While competitive analysis is a valuable tool for businesses to evaluate their position in the market and gain a competitive advantage, it’s essential to approach this process with a critical and realistic perspective. Here are a few challenges and limitations of competitive analysis:
Difficulty obtaining accurate data: Competitors may not always disclose accurate or complete information about their strategy or performance. This can make it challenging to get accurate data and insights about their strengths and weaknesses.
Risk of focusing too much on competitors: Focusing too much on competitors can sometimes lead businesses to overlook the needs and preferences of their customers. It’s essential to strike a balance between understanding your competitors’ strategies and staying focused on your value proposition.
Limitations of industry reports: While they can provide valuable data and insights into the competitive landscape, industry reports may not always be up-to-date or relevant to your business. It’s vital to supplement industry reports with independent research and analysis.
Rapidly changing market conditions: The business landscape constantly evolves, and competitors may adopt new strategies or technologies that disrupt the market. It’s important to stay agile and adaptable in the face of change and to update your competitive analysis to reflect new developments regularly.
Risk of overreliance on competitive analysis: Competitive analysis is just one tool in a business’s arsenal. It’s crucial to supplement competitive analysis with other types of research, such as customer feedback and market research, to gain a complete picture of the market and stay ahead of the competition.
Future Trends in Competitive Analysis
As the business landscape evolves, new trends and technologies change how businesses conduct competitive analysis. Here are a few emerging trends to watch:
Artificial intelligence: Artificial intelligence (AI) is revolutionizing many aspects of business, including competitive analysis. AI-powered tools can analyze vast amounts of data and identify patterns and trends that human analysts might miss. They can also provide real-time insights into competitors’ pricing strategies, marketing campaigns, and more.
Social media analytics: Social media platforms offer a wealth of data on customer sentiment, engagement, and trends. By analyzing this data, businesses can gain insights into their competitors’ marketing strategies and customer preferences. Social media analytics tools are becoming increasingly sophisticated, making it easier for companies to conduct competitive analyses on these platforms.
Predictive analytics: Predictive analytics uses data, statistical algorithms, and machine learning to identify future outcomes based on historical data. This technology is becoming increasingly important in competitive analysis, allowing businesses to anticipate changes in the market and stay ahead of the competition.
Big data analytics: The amount of data available to businesses is growing exponentially, and big data analytics is becoming increasingly important in competitive analysis. Big data analytics tools can help companies to identify patterns and trends in large data sets, providing valuable insights into competitors’ strategies and market trends.
Collaboration and knowledge sharing: Finally, business collaboration and knowledge sharing are becoming increasingly important in competitive analysis. By sharing information and insights with other businesses in their industry, companies can gain a more complete picture of the market and identify opportunities for growth and innovation.
The Role of Market Research in Competitive Analysis
Market research plays a critical role in competitive analysis. By gathering data on customer needs and preferences, market trends, and competitor strategies, businesses can gain valuable insights into the competitive landscape and develop a strategy that sets them apart. Here are a few reasons why outsourcing market research to an external agency can be a good idea:
Access to expertise and resources: Market research agencies specialize in gathering and analyzing data and have access to sophisticated tools and resources for conducting research. By outsourcing market research to an external agency, businesses can tap into this expertise and gain a complete picture of the market.
Objectivity and impartiality: Market research agencies are independent from the businesses they serve, which allows them to provide unbiased and objective insights into the market. This can be especially valuable in competitive analysis, where an objective perspective is critical for identifying strengths and weaknesses in the market.
Cost-effectiveness: Conducting market research in-house can be expensive, especially for small businesses. Outsourcing market research to an external agency can be cost-effective, as agencies can provide access to tools and expertise that might otherwise be prohibitively expensive.
Time-saving: Market research can be time-consuming, especially for businesses with limited resources. Outsourcing market research to an external agency frees up time and resources to focus on other aspects of their strategy.
Flexibility: Market research agencies can offer various research services, from online surveys to focus groups to ethnographic research. This allows businesses to choose the best research methods for their needs and budget.
Outsourcing market research to an external agency can be a good idea for brands looking to conduct competitive analysis. By tapping into market research agencies’ expertise, resources, and objectivity, businesses can gain valuable insights into the market and develop a strategy that sets them apart from the competition.
Key Takeaways
Competitive analysis is a valuable tool for brands seeking a competitive advantage in their industry. By identifying their competitors’ strengths and weaknesses, opportunities, and threats in the market, businesses can develop a strategy that sets them apart from the competition. However, it’s essential to approach competitive analysis with a critical and realistic perspective and use the insights gained to inform your strategy and decision-making effectively.
Competitive analysis is valuable for gaining a competitive advantage in your industry.
It’s essential to balance understanding your competitors’ strategies and staying focused on your value proposition.
Market research is critical in competitive analysis, and outsourcing to an external agency can be a cost-effective and efficient solution.
Businesses should stay up-to-date on emerging trends and technologies in competitive analysis, such as artificial intelligence and social media analytics.
Finally, businesses should be flexible and adaptable in the face of change and regularly update their competitive analysis to reflect new developments in the market.
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Consumer behavior is shifting more rapidly and drastically than ever before. Brands are trying to keep up with massive changes in consumer behavior and preferences in virtually every sector, from groceries and fitness to banking and finance. Consumers continue to pivot their preferences and priorities with uncertainty, inflation, and an economic downturn.
In the early days of the pandemic, an uncertain and dismal picture caused anxiety and depression, which led to panic buying globally. Those were short-term behaviors and did not last. However, many massive shifts due to the pandemic have stuck, including online shopping and the need for speed, efficiency, and convenience.
The pandemic has changed certain habits for the long haul, with many consumers going to stores less frequently than before. Buyers are now more comfortable shopping online, and most consumers prefer a hybrid shopping experience combining the physical and digital worlds as convenience becomes paramount.
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With the growth of online shopping and technological advancements making online shopping as personalized as a store visit, consumers are exploring options beyond traditional brick-and-mortar stores and looking for a complete experience, be it physical, online, or hybrid. Businesses must adapt quickly to these changes and shifts in consumer preferences to remain competitive in a dynamic and ever-changing market. These changes have been taking place for some time, but the pandemic accelerated the rate of change unexpectedly.
Some of the consumer behaviors that have drastically shifted post-pandemic are food and grocery delivery services. In the U.S., consumers did not regularly use grocery delivery services. According to some reports, about 15 percent of U.S. consumers tried grocery delivery services for the first time due to the pandemic, about 80 percent of those first-timers liked the service, and 40 percent said they would continue using it post-pandemic.
While convenience and safety were the two reasons delivery services skyrocketed during the pandemic, the price will likely supersede convenience as we enter a time of out-of-control inflation. Consumers will try to make their money stretch further because savvy consumers know the premium they pay for using delivery services like Instacart.
In this new economy, will they still be comfortable paying a premium and missing out on discounts for fuel when they don’t shop in person?
Food delivery services also became more popular worldwide, and the takeout and delivery trend was rising. However, as people returned to in-person dining, food delivery apps took a hit. These apps will also follow the same path as grocery delivery services because when consumers buy from DoorDash, the prices are higher, and they cannot use vouchers.
Many big retailers like Walmart are following shifts in consumer behavior by offering pick-up and delivery with no markup on prices. Other delivery apps are double-dipping on price, and the consumer pays more than they would in the store.
Brands need to understand that just as convenience and safety were top priorities during the pandemic, consumers prioritize value and price over everything else, given the current economic environment.
The fitness market is also seeing massive shifts, and consumers now want an omnichannel approach to fitness, where they use at-home gym equipment and online classes and apps in combination with in-person classes.
Many e-commerce brands capitalized on creating connections with their consumers by using hand-written-style notes to add to the unboxing experience.
Beauty and fashion brands made it easier for consumers to shop online by using machine learning and artificial intelligence to offer personalized suggestions, experiences, and Virtual try-on sessions using Virtual Reality to mirror an in-store experience.
Brands need access to high-quality consumer data, insights, and business Intelligence to stay in the game, meet customers’ demands, and outpace the competition.
In any business environment, enterprises need to clearly understand the psychology behind why consumers behave the way they do. Consumer behavior is the study of consumers and analyzes how consumers decide what to buy, when, and how to buy. It seeks to understand the psychology behind consumers’ needs, wants, and desires and how they purchase, use and dispose of products and services.
This study is critical because it helps brands understand the motivations and influences behind their purchases. It allows brands and marketers to develop the right products for the right audiences and market the product with the right messaging to convert prospects into buyers and retain them over time.
Several factors come into play during the purchase decision stage, and these may include personal (age, culture, values, beliefs), psychological (brand perception), or social (friends, family, influencers, social media).
There are four types of consumer behavior:
Complex buying behavior
This type of buying behavior is associated with big-ticket purchases, like buying a home or a car, where consumers invest a lot of time and energy.
2. Dissonance-reducing buying behavior
This type of consumer behavior is often seen when a consumer is highly involved in the buying process but takes longer than usual because they do not want to regret the decision. This happens when multiple brands are very similar, and choosing one is tricky.
3. Variety-seeking behavior
This behavior is exhibited by consumers who opt for a different brand, even if they were happy with their previous purchases because they value variety.
4. Habitual buying behavior
Consumers that purchase the same brand because of habit rather than brand loyalty are in this category.
A grasp of the type of consumers your brand attracts will allow you to segment your market based on consumer characteristics.
Marketers also need to understand buying roles and who is the decision maker regarding their specific product. In a family, for instance, the parents make major buying decisions; however, in some cases, young children are highly influential in the decision. In fact, unlike in the past, the younger cohorts, Generation Alpha (those born after 2010) and Gen Zs (those born between 1995-2010), make many important buying decisions regarding what they wear, eat, or travel.
There are six major buying roles brands need to take into consideration:
Influencer(s): Several people may be involved in the purchase decision in many cases, but they may not all be consumers. Influencers are those who can exert influence in the final decision. These could be bloggers in today’s world or friends and family whose advice commands weightage in the purchase decision.
Gatekeepers are usually family members who control the information flow regarding a product within a household.
Initiator: This is the person who first initiates the purchase idea.
Decider: This person has the final say in the purchase decision and decides whether or not to buy the product. He also may determine how and where to buy it.
Buyer: This is the person who ends up buying the product.
User: This is the person who consumes or uses the product purchased.
Consumer behavior helps with market segmentation, as it goes beyond the essential demographic elements like age, gender, and location to explore the behavior patterns customers exhibit when interacting with a particular product, brand, or website. This concept is instrumental in e-commerce and online shopping environments.
Here’s how e-commerce brands use consumer behavior to segment customers and users based on their level of engagement with the website, app, or product page.
They segment or group their customers by their attitude toward their brand, level of brand recognition, usage, frequency and timing of purchase, and purchasing patterns or tendencies, like special occasion buying behavior.
This allows them to tailor their marketing messages and create compelling campaigns to achieve their goals.
By utilizing behavioral segmentation, brands can get a complete picture of their customers and filter them by the highest levels of engagement. For instance, brands can track those who regularly open their emails or visit their product pages. Marketers can also target ads with the most appealing messaging to customers based on their needs. For instance, an online shoe store can show those interested in athletic wear more running shoes and sneaker ads, and at the same time, serve ads with formal shoes for those interested in evening shoes.
Another significant shift in consumer behavior is related to a demand for personalized and customized products, especially amongst the younger cohort of Gen Zs. Using behavioral segmentation, brands can provide more refined personalized experiences to win business. Brands can gain deep insights into their consumers’ needs, wants, desires, challenges, preferences, and concerns to gain a competitive advantage. Upselling and showing complementary products and replenishment reminders based on customer history and interests can reduce cart abandonment and boost brand loyalty.
The use of behavior segmentation beyond the purchase also helps provide a high level of customer service to cement the relationship with the customer, leading to higher retention rates, more repeat business, referrals, and brand loyalty.
Using behavioral segmentation, brands can unearth invaluable data and insights that may otherwise never have been discovered.
Understanding consumer behavior comprehensively helps brands improve performance across channels to diversify their marketing efforts. Brands can use these insights to adjust brand messaging, packaging, design, features, pricing, and more to stay ahead of the competition and boost brand equity.
Kadence International helps leading brands make game-changing decisions. If you are looking for a research partner to help better understand your customers, we would love to help. Simply fill out our Request for a Proposal here.
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Just like reaching an unknown destination without a map is difficult, so is building a business strategy without competitive intelligence.
Competitive intelligence helps brands shape their product development, distribution channels, pricing, messaging, positioning, brand promotions, and features. It allows brands to identify their challenges and opportunities in the market in relation to their competition, so they can see what their competitors are doing and differentiate themselves from them.
What is competitive intelligence (CI)?
Competitive intelligence refers to any intentional research where brands collect, analyze, and utilize data and information gathered on their competitors, customers, and other external factors, potentially providing brands with a competitive advantage.
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When brands ethically and legally collect competitive intelligence, it can help boost the organization’s decision-making capabilities. The goal of any competitive intelligence study is to create a business plan and strategy so organizations can make well-informed decisions based on market considerations.
Competitive intelligence goes beyond knowing the competition; the process is designed to take a deep dive to unravel the finer points of the competitor’s target markets and business strategy.
The Japanese auto industry carried out a compelling competitive intelligence study in the 1970s. The Japanese automobile industry analyzed the U.S. automobile market to discover a need for smaller, more fuel-efficient cars in a country where gasoline prices were rising. Using competitive intelligence across its borders, Japanese automakers identified a critical trend to beat their competition in the U.S.
Competitive intelligence plays a vital role in all major departments of an organization and can take on a different meaning for each department or function. For instance, for a product development team, competitive intelligence may mean new features being added to products. For a sales executive, it may be helpful to know how to create a winning proposal. For leadership, it may be understanding the competitor’s marketing strategies so they can craft a plan to gain more foothold in the market.
Competitive Intelligence studies and exercises can be tactical (shorter-term) or strategic (longer-term). The goal of tactical competitive intelligence studies, for instance, can be to obtain insights into increasing revenues or gaining market share. At the same time, strategic or longer-term reporting focuses on significant risks, threats, and opportunities, present or emerging.
A competitive intelligence study typically includes a wealth of information and insights from various sources, like government records, online mentions, social media, trade shows and journals, customer data and interviews, and traditional news media, to name a few. These sources are easily accessible and form the starting point for the studies. More in-depth information from distributors, suppliers, competitors, and customers is needed to make truly informed decisions.
What are the key benefits of competitive intelligence?
There is no substitute for Competitive intelligence research when it is undertaken with care and diligence. It is a powerful tool for brands to gain market share, boost revenue, and continue to build the right products at competitive prices.
Here are some key benefits of using competitive intelligence for brands:
#1. Ability to predict patterns and emerging trends
As brands excavate an enormous amount of data and insights related to their competitor’s activities, they begin to identify and foresee emerging trends in the industry. This allows brands to gain deep foresight to make informed decisions and strategic business plans.
#2. Aids inbrand positioning
As brands gather insights and data about the competitive landscape, they also gain clarity on their activities and messaging. It helps them understand what works and doesn’t and cement their marketing.
#3. Helpsmake more informed decisions.
When brands unearth information, they gain critical insights into how the customers feel about their brand and the competing brands. This gives brands a better view of their customers’ wants and how their competitors are meeting the needs of the target markets.
#4. Boosts returns and profits
When you have a good understanding of the strategies and tactics employed by your competition and how they are performing, you will be better able to invest in areas that bring the highest returns, reducing risks and boosting profits.
Going back to the definition of Competitive Intelligence, we can see three necessary steps: “collect, analyze, and use competitor and market information to make informed decisions.”
Collecting data
There are many ways of unearthing relevant competitor data legally and ethically. Searching for information online may seem rudimentary, but it can provide invaluable information about the competitors and their activities. This information is readily available and accessible on the internet and is considered low-hanging fruit. With a few simple web searches, you can find great information on what the competitor is doing and what it has done in the past. You can also learn about product features, pricing, innovations, leadership, and important news and announcements relevant to your competition. There are tools that provide insight into the competitor’s search engine optimization activities and their online advertising efforts.
From here, brands often go deeper and beyond the internet to analyze target markets and customer segments. Brands use quantitative and qualitative market research to gain more market insight.
Brands use data to analyze their competition beyond the simple search process. This entails going through endless data and making sense of it all can become cumbersome. This is where data mining comes into play. Besides gathering data from third-party sources, brands also gather human intelligence by interviewing relevant people, including customers and past suppliers. This is a time-consuming process and must be undertaken by experts in market research to ensure it is done ethically and legally.
Analyzing data
Analysis of data is a crucial step in the competitive intelligence process. Once brands collect data, it needs to be analyzed carefully to provide actionable insights. This allows brands to understand the patterns and separate them from the outliers.
The analysis aims to uncover strengths, weaknesses, opportunities, and threats as they relate to the competitive landscape. Therefore, collecting and analyzing information from disparate sources is essential in verifying their authenticity and validity. This helps us move away from making assumptions and gaining real insights from more accurate pieces of data.
Crafting a strategy
Once a brand has enough verified data and information on its competitors and strategies, it can utilize it to differentiate itself and make informed decisions regarding product, price, messaging, and other essential aspects. It allows brands to weigh the competitor’s strengths, weaknesses, and opportunities in relation to their own to gain a competitive advantage.
For instance, pricing is an important area for differentiation but can only be done right if everything is studied and taken into account to find the right price that is profitable and aligns with the customer’s perceived value of a brand or product offering. Therefore, a successful price is not about pricing your product at the same or lower price than your competitor but positioning your brand as the choice that provides the greatest value. And to make that happen, you need to know the price of competing products and their perceived value in the buyer’s mind. This calls for a thorough study and analysis of the competing products, markets, and consumers.
To get the complete picture, brands may conduct competitive intelligence surveys. They can define their target audience and use various demographic and psychographic questions to identify consumer behavior. These also include questions about competing products and services. You may also use ranking and rating type questions and identify any unmet needs or gaps in the marketplace or use open-ended questions to get a more in-depth view of the consumer’s mind. Brand recall and recognition surveys are also helpful in gaining consumer perception of various brands. For instance, a sparkling water brand may ask: “When you think of bottled sparkling water, what brand comes to mind first?” This can help brands discover how frequently their brand is mentioned compared to competing brands in the category.
When armed with the powerful insights gained through competitive intelligence, brands can be more strategic in all aspects of business, from product development to pricing and distribution. By differentiating themselves from competitors, they can gain valuable market share, grow brand value, and brand equity, and boost their return on investment (ROI).
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Fear is a negative emotional response to the presence of danger or threat. Speculative fear is a negative emotional response to the anticipation of danger or threat, which may or may not occur. Humans are hardwired to look for things to fear, forming a necessary part of our survival instinct from birth.
The human response to danger or threat is flight, fight, or in extreme cases, immobility. However, people respond in several ways when trouble or threat is perceived only as a looming risk. Avoidance, hunkering down, freezing in place, and acting impulsively are responses to prolonged anxiousness caused by pending fearful situations.
While fear is ingrained in our nervous system, it can also be taught. Technology has dramatically changed the way people get information. Social media has become the primary source of news online, with more than 64 percent of internet users receiving breaking news from social media instead of traditional media.
These statistics may be a sign of modern times. Still, the challenge with most people getting their news on social media sites is concerning when coupled with the fact most people do not read past the headline, and the vast majority of headlines are negative.
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Negative media coverage reports show that negative words such as “bad,” “worst,” and “never” are 30 percent more effective at catching people’s attention than positive words. Research studies also revealed that negative words improved the average click-through rate. Headlines with negative bias showed a 63 percent higher result when compared to positive ones. Most (59 percent) of all news article links shared on social networks aren’t clicked on, implying that most article shares are not read in their entirety.
So, you’d be right if you think we live in an increasingly hostile world, and most news is bad news. We are increasingly exposed to negativity and fearful news, affecting our collective anxieties and behaviors.
Panic buying
When the Spanish flu arrived in Britain immediately after the First World War, people panicked and rushed to purchase quinine and other medications, leading to national shortages.
Since then, panic buying and hoarding have been observed during many crises. Panic buying is much more common in developed or industrialized countries where people expect they will always be able to access food and other essential items easily.
During the COVID-19 pandemic, psychologists observed that panic buying was associated with individuals with higher incomes, the presence of children in households, depression and death anxiety, and mistrust of others or paranoia.
Panic buying results from the perceived threat of the event and the perceived scarcity, fear of the unknown, and as a coping mechanism.
Retail therapy
Retail therapy is shopping primarily to improve the buyer’s mood or disposition. It is often a short-lived habit in people with depression or stress.
Research has shown that shopping can help reinforce a sense of personal control and ease feelings of sadness.
In 2014 the Journal of Consumer Psychology found that retail therapy makes people happier immediately and can also fight lingering sadness. According to the study, the choices and outcomes inherent in the act of shopping can restore a feeling of personal control and autonomy.
Another study by the University of Michigan showed that purchasing things you enjoy can be up to 40 times more effective at giving you a sense of control than not shopping. In this study, those who actually purchased items were also three times less sad compared to those who only browsed.
How brands can respond to environments of high fear and low trust
Listen to your customers.
During times of financial stress, such as high inflation or recession, seek as much information as possible about your audience.
Take a deep dive with multiple data streams to build a clear picture of behavior and sentiment. It will likely be vastly different than it was a few months ago and will continue to change. Don’t leave questions out of your research about fear and perceived risk with your customers.
Words matter.
The world is changing faster than ever, with your buyers’ attention and priorities shifting quickly in response to stressful events.
For brand marketers and product managers, understand that language that sounded good last month can mean something entirely different today.
Take action.
With insights from your research, determine what your brand should do to address your customers’ wants, needs, and fears. Your target audience has expectations from brands during uncertain times. Discover what they are, and see if you can deliver while remaining authentic to your brand promise.
Communicate authentically.
Be bold and authentic when storytelling and communicate practical information to help reassure and educate your customers. Give your customers an added feeling of security and stability by providing in-depth information. Choose to be a voice of comfort, instilling confidence in your consumers and alleviating fears with the right message.
Fear and anxiety aren’t going away anytime soon. Financial fear and stress can adversely affect buying behaviors, so it is essential to acknowledge these emotions and develop strategies to address them head-on. What was true of your target audience a few short months ago may not be true today. It all starts with an in-depth understanding of the perceived risks and barriers to purchase when it comes to your product or service. Great research is the first step for brands to develop compelling and compassionate messaging that helps customers feel empowered, confident, and comfortable with their purchase decisions during times of financial stress.
Kadence International helps leading brands make game-changing decisions. If you are looking for a research partner to help better understand your customers, we would love to help. Simply fill out our Request for a Proposal here.
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At Kadence International, market researchers are at the heart of our team. In this series, we honor some of our colleagues, asking them about their experience working within the market research industry and what the future holds for the industry.
Name: Arpan Jhingran
Position: Project Manager
Kadence Office: New Delhi, India
I joined the Kadence India office in February, 2010.
What does a typical day or week look like for you in your current role? Or what are your primary responsibilities/duties?*
Client Servicing is a significant part of what I do for the project life cycle, starting from sharing the cost to the invoice raising and updating the client and senior management on a timely basis. Our responsibilities include solving the field operations query by speaking to the client and finding the best solution.
Tell us a little about your career so far. What was your first job or role? How did you get started with market research? What other roles (in market research) have you had?*
I had worked with ACC Concrete as a management trainee at their Mumbai location, then moved to Delhi. Kadence is my first company in the Market Research industry. I joined as Operations Executive and was promoted to Senior Field Executive. I have been a project manager for the past five years.
Did you always know that you were destined for a career in market research? Why? If not, what did you actually think your career would be, or what did you say you wanted to do “when you grew up” as a child?*
During my MBA, I was fascinated with the Market Research industry because of its involvement in every possible sector. I was also intrigued by the prospect of using different methodologies for deriving results and presenting those as findings and insights to brands.
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What is your favorite quote or the motto you live by?*
Live and let live
What is the best thing about the culture at Kadence?*
I love the open culture at Kadence, which allows you to work freely and use your experience to guide you in the right direction.
What essential skills are required to excel as a Market Researcher?*
Excellent and clear communication is paramount to building trust with the client.
What is unique about the market research field / and or consumers in your country/ region?*
There is much enthusiasm for trying new products or giving their opinions on topics we need data and insights on.
What is it about the field of market research you wish everyone knew?*
Much hard work goes behind every outcome to improve any product or idea.
What piece of advice would you give someone looking to start a career in market research?*
Clear communication is the key in any service industry to building confidence, and I would like to advise anyone inclined to join market research to hone their communication skills.
How have you seen consumer behavior change in the past 2 – 3 years as a result of the pandemic? If so, what are your main observations?*
The expenditure pattern has changed drastically. People are ready to spend on what they want rather than save for the future.
For one of our projects in the healthcare field, we had to visit government hospitals and understand the conditions and processes by speaking to doctors, medical staff, and patients. Also, we had to talk to doctors without medical degrees and use medication based on their experience. That was great learning of my career.
If you could time travel into the future ten years, how would market research evolve?*
I see market research moving online compared to the current scenario of being an offline-dominated industry.
What do you like to do in your free time when you are not working? *
I enjoy spending time with my family or sometimes going out with my friends.
What is something you have accomplished in work or life that you are particularly proud of?*
A beautiful family.
What is your all-time favorite food or cuisine?
South Indian Food (particularly Dosas).
What is your all-time favorite travel or vacation spot, and why?
I love hill stations because of the drive up there and the weather.
How has Kadence’s remote work opportunity allowed you to achieve a work/life balance? We would love an example.
It gives me some more time to spend with my family.
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Why do people camp outside Apple stores to be the first to access newly launched iPhones? Why do consumers pay more for branded products than for non-branded ones?
It has everything to do with consumer perception or brand equity. When consumers favor your brand over a competitor’s brand and show loyalty to your brand over time, they are contributing to your brand equity. Brand equity is defined as the measure of the perceived value of a branded product over time. Brands need to measure brand equity because boosting it can help them improve their market share and profit margins.
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Brand equity is different from brand value
With an estimated brand value of about USD 355.1 billion, Apple has established itself as the world’s most valuable brand for 2022, followed by Amazon in second place with a brand value of approximately USD 254.2 billion.
So, what is brand value, and how is it different from brand equity?
Brand value is the price someone will pay for your brand if you were to sell it. There are many ways of measuring brand value and they include the costs associated with building the brand. The investment made in creating a brand, its identity, logo, graphics, brochures, and other assets is used in the brand valuation process.
Brand equity is not the same as brand value but can positively raise the worth of a brand because as you build your brand equity, you achieve greater brand recognition and positive brand associations, which can boost revenue and brand loyalty.
It should be noted that a brand can have value even if it has no equity. For example, a company may invest in developing a product and brand, so it will have a value attached to it even before it enters the market. Brand equity helps enhance and increase brand value.
What drives brand equity, and how can you measure it?
While brand value is easy to measure, brand equity can be vague and more difficult to calculate because it is influenced by opinions, perceptions, and behaviors, and not just financial metrics.
Let’s divide these drivers into three categories —namely, financial metrics, brand awareness metrics, and consumer sentiment.
Financial metrics
Although not the only factors responsible for brand equity, financial drivers like healthy profits help validate a brand’s equity to a great extent.
Metrics such as sales, average transaction value, customer lifetime value, profitability, growth rate, and the cost of doing business are essential data sets to measure overall brand equity. It is also important to calculate the competitive performance of a brand against other brands in the same space by measuring market share and customer acquisition rate.
These competitive metrics also help your brand identify gaps in customer service, product features, pricing, marketing messaging, positioning, social media engagement and following, and distribution channels.
No matter how well or poorly your competition performs, it will directly impact your brand. Conducting a thorough competitive analysis to evaluate how your brand measures up is essential.
When these financial metrics increase, so does your brand value.
Brand awareness metrics
A strong brand with a high level of recall and awareness will likely boost your brand equity. This is what sets successful brands apart as they endure even the most difficult economic conditions.
Customer awareness of a brand and its products and services is essential to brand equity. Brands should aim for consumer advocacy and, more importantly, for their consumers to actively engage with and talk positively about their brand.
Conversation share, measured by the number of times a brand comes up in conversations about the brand’s offerings, is a massive indicator of how aware consumers are of your brand.
Market research helps evaluate brand awareness through various methodologies online and offline. Commonly used methodologies in market research include:
Surveys and focus groups
Local store traffic
Traditional media mentions
Online search volume
Customer reviews
Social media mentions
Emotional metrics
Knowing how your consumers perceive your brand is critical—the more positive their perceptions, the higher your brand equity.
Market research helps track consumer behavior and sentiment to obtain reliable information about brand perception. This type of metric is much more challenging to measure. Market research using qualitative surveys and the right text analytics software (link) to interpret open text is beneficial in data collection and analysis.
Consumer preference and consumer perception of a brand are good indicators of brand equity. The former pitches the brand against its competition and gauges how consumers view it in relation to competing brands. The latter provides insights into the emotions and feelings associated with a particular brand. For instance, market research using qualitative methods can reveal how consumers react to a particular brand name.
Consumer preference influences purchase decisions, like paying a higher price for a brand name or going the extra mile to access the brand. A case in point is the annual beeline outside Apple stores when it releases its newest iPhone.
Quantitative methods like sales data are an excellent way to gauge customer preference; however, they should be used alongside qualitative methodologies such as surveys to identify to what extent your customers agree your brand is superior to the competition and how much they are willing to pay for your brand name.
These surveys are also used to measure how emotionally invested your consumers are in your brand and the emotions associated with it.
While a nebulous concept, brand equity provides the actual value of a brand beyond financial metrics.
Knowing how consumers feel toward a brand can open new opportunities for understanding key demographics within target audiences.
With a deeper understanding of the target audience, products and campaigns can be tailored to specific groups to improve ROI.
Utilizing quantitative methods, brands measure brand equity based on financial data, like sales, revenue, profit, and loss. Qualitative methods of measuring brand equity, on the other hand, include brand awareness, brand recognition, customer satisfaction, customer loyalty, and brand perception.
Brands like Apple, Amazon, and Microsoft did not build their brand value overnight, but we know they have devoted many years to creating memorable brands that resonate with their target audience, and they continue to tirelessly do so even today.
While tracking many of these metrics may be challenging, it is not impossible. Market research provides invaluable tools to etch out brands that stand out and shine using data, market intelligence, insights, and breakthrough technology.
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The phrase “Never judge a book by its cover” does not apply to product packaging design. When package design is the only reference a consumer has, he is bound to go for the most appealing option. Years of market research have established that what’s outside the package is as important as what’s inside it. How else will a product stand out in a sea of competing brands? Yes, brand loyalty, ingredients, and other factors can make a difference, but in the end, most of it comes down to consumer psychology.
In a store, the package design is the gateway to the product. Successful brands use psychology in their product design and packaging, driving sales and brand loyalty. Consumers often perceive a product’s function and worth based on its packaging and design.
Product packaging is primarily dictated by the target audience and what they want. For brands targeting a younger demographic, for instance, it is essential to add personalization and brighter colors and fonts that appeal to the youth.
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This can change when catering to the same demographic in different countries. For instance, the environmental impact of packaging is a relatively less critical purchase factor for Japanese consumers, yet 80 percent of the respondents in India factor the environmental impact of packaging into their purchase decisions.
Understanding Consumer Psychology
Any buying decision involves consumers going through several cognitive stages when looking for a product actively. Their perceptions and opinions are based on what they see during this stage. After they select and purchase a product, they continue to evaluate their decision based on the product’s performance and experience.
When a product’s perceived value is high, consumers are less impulsive than when the value is lower. This explains why over 70 percent of supermarket purchases are not planned. Shoppers in supermarkets and grocery stores rely primarily on the instinctive cues they get from package design as they browse stores. These help them make quick judgments about the product’s quality and value and can be why they add it to their carts (or not).
Choosing the right colors
Research shows that color is one of the first things our brains see when they come across a brand and is often the first thing that pulls consumers in.
Do you feel calm in a blue room, and does yellow make you anxious?
Pablo Picasso once said, “Colors like features, follow the changes of the emotions.” Colour is known to change emotions, moods, and feelings dramatically. Colors can have different meanings from culture to culture, as the idea of color is deeply rooted in our experiences.
Color psychology is a hot topic in marketing, branding, and graphic design because colors play a huge role in brand perception and image.
When selecting colors, it is imperative to look into the cultural significance of each color. This becomes necessary for brands planning international market entry, as different cultures have different connotations and emotions attached to specific colors. For instance, while green is a color of prosperity in many Muslim nations, it is a color associated with illness and death in some South American cultures.
It is also essential to consider how your brand colors align with your brand and its identity. Other considerations are whether these colors stand out in a crowded marketplace and how they would work for those who are colorblind.
Format and materials
The format or shape of the packaging is often based on whether the package will be used or discarded. In case it’s part of the product, like a milk carton, the quality, materials, and function are important considerations. For instance, a square or rectangular base is better so it can fit in the refrigerator more efficiently, and an easy-to-pour spout enhances convenience and functionality.
Packaging design depends on many other factors as well. For instance, a luxury product needs to be packaged in a way that reflects the high price of the product. In recent years, sustainability has also become a huge factor in selecting packaging materials, and an exciting product design may encourage consumers to post the packaging or unboxing online.
Typography and labels
Typography is the art of placing text to make the copy clear, legible, and visually attractive. It utilizes font style, size, and structure to evoke feelings and emotions and convey a message. It also helps balance the graphics on a package.
The font styles and sizes you use on your packaging play a huge role in the overall design and how consumers perceive your brand. The logo, typography, and fonts allow your brand to stand out from the competition. The typography helps catch your target audience’s attention and conveys the brand’s message. It also helps establish consistency, a vital aspect of brand identity.
For a successful packaging design that quickly moves the product off the shelves, brands need to know their target audience and stay abreast with the latest trends. The typesetting, fonts, and styles you use, just like the graphic and color choices, are based on your target market —factors such as age, gender, language, culture, and preferences influence the typography of a product’s package design.
By providing invaluable information regarding current market trends and the unique wants and needs of a brand’s consumer base, market research helps a brand develop its business and marketing strategy. Market research benefits many different facets of business, including product design and packaging.
Brands need to have complete knowledge of consumer desires and the effect of specific product packaging on purchasing patterns and preferences. In market research, there are many different means for gathering this data, each with its own set of advantages. In most cases, it is best to use a combination of methodologies to understand the effectiveness of your packaging design and labels.
Market research allows brands to tap into the psyche of their target markets to gain a deeper understanding of how a package design impacts purchasing decisions.
This can be done in many ways by gathering data, each method with distinct advantages.
Some common forms of gathering data:
1. Focus groups
Market researchers often use focus groups and show them labels and packages to gauge their first reactions to the design, colors, typography, offers, and form. The focus group participants sample the product and look at the packaging and label to provide insights into what part of the packaging would influence their purchase decision.
2. Interviews and discussions
Many brands conduct interviews with consumers as they browse competing products in a store setting. Questions like, “what made you add a product to your cart?” can uncover purchase decisions and the effectiveness of your product packaging. You may also interview employees from different departments who know the product well.
3. Surveys
Online surveys are a quick and easy way to conduct a survey. These can be carried out for in-store and online purchases on eCommerce sites and allow for anonymity, providing information and insights into purchase decisions and behavior. A well-designed survey employs a rating scale and asks open-ended questions.
4. Observation
Market researchers often use direct observation by visiting the store and observing how the products on the shelf move. In this manner, it is possible to see how the placement of items in a store affects sales. It also allows brands to look closely at the competition to see what graphics, colors, and other visual elements affect purchase decisions. How would your product look in comparison to competing brands? Does it blend in or stand out? Does it stand out in a good way? Making frequent visits to stores can provide a window of opportunity and is a powerful way to conduct market research.
Market research provides invaluable insights into market trends, consumer psychology, and behavior. It can help formulate the right business and marketing strategy for businesses, including package design.
Package design research is more critical now than ever. In many cases, the retail package design is the only advertisement for the brand. The brand’s packaging has a few seconds to draw consumers to the product and evoke purchase intent.
While brands use many quantitative and tried and tested package designs, they often tend to overlook the subjective side of research, which requires qualitative research methods and tools—knowing the “why” behind purchase decisions and consumer motivations can provide the essential piece in understanding the effectiveness of a new package design or redesign.
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Senior Marketing Executive
Sales & Marketing
General Manager PR -Internal Communications & Government Affairs
Vital Strategies
Customer Intelligence Director