Navigate the Market Research & Mastering the Art of Competitive Analysis

Launching a product without understanding the market and your competition is like diving into the ocean blindfolded. That's why let's focus on two key aspects: market sizing and competitive analysis.

Market Sizing: Setting the Stage for Success

First, we'll tackle market size: figuring out how many potential customers are out there. There are two main approaches:

• Top-Down: Imagine casting a wide net. This method estimates the total market and then calculates your potential share based on assumptions like market penetration. It's good for a quick overview but can be less accurate.

• Bottom-Up: Think of building a sturdy foundation. This approach analyzes sales of similar products to estimate your potential. It's more data-driven and often more reliable.

Remember, being conservative with the market size is key. Overly optimistic assumptions can lead to disappointment down the road.

Tools for Market Mastery:

• Harness the power of Google: Search for industry reports and market size data.

• Become a website traffic detective: Tools like 'compete' reveal how many people visit your competitors' websites.

• Crack the search code: Google AdWords Keyword Tool helps you understand what users are looking for and what interests them.

• Listen to the social buzz: Dive into user feedback and frustrations on platforms like Twitter, Reddit, etc.,

Knowing Your Rivals: The Game of Thrones of Products

Now, let's shift gears and talk about competitors. Why are they important? Well, imagine trying to conquer a kingdom without knowing who your enemies are. Understanding your competitors is essential for both product managers and entrepreneurs.

Market Landscapes:

• Big pond, lots of fish: You might be entering a large market with many competitors.

• Small pond, few fish: Maybe you're in a niche market with limited competition.

• Somewhere in between: The market landscape can vary greatly.

No matter the scenario, gathering information and making objective judgments about your competitors is crucial. This helps you make informed decisions about your product strategy.

Analyzing Your Rivals: Before You Build, You Scout

Before you invest resources in development, analyze your competition. Ask yourself:

• Do they offer similar products?

• Are they doing things better?

• Is there a clear opportunity for your product to stand out?

Making Smart Choices:

As a product manager, you need to prioritize opportunities, features, and projects based on their potential impact on user acquisition, satisfaction, and brand enhancement.

Entrepreneurs managing their products need to assess opportunities for desired returns and avoid wasting time and resources.

Categorization of competitors

1. Direct Competitors:

Competitors target the same customer group and solve the same problem.

Offer similar solutions, and users make a conscious choice between them.

Example: You're developing a new fitness-tracking app for smartphones.

Direct Competitor: Another company offering a similar fitness tracking app with comparable features and targeting the same user demographic.

2. Indirect Competitors:

Competitors solve the same problem but in a different way or for a different target group.

Could serve a smaller subset or a larger market that includes the target group.

Example: Your app focuses on general fitness tracking for all types of physical activities.

Indirect Competitor: A specialized app that concentrates on a specific activity, such as running, attracting a subset within your target user group.

3. Potential Competitors:

Competitors targeting a similar customer group but not addressing the same problem or product line.

Also referred to as peripheral competitors worth keeping tabs on.

Example: Your fitness tracking app primarily uses gamification to encourage users to stay active.

Potential Competitor: A company that produces wearable devices with health sensors but hasn't ventured into the gamified fitness tracking app market. They have the potential to enter this space.

4. Substitute Competitors:

Products solving the same core problem but delivered in a different way and not targeting the same people.

Example: Your app emphasizes tracking daily activities and providing personalized fitness plans.

Substitute Competitor: A traditional fitness magazine or a physical activity board game that offers general fitness guidance but lacks the interactive and real-time tracking features of your app.

Tiering Your Rivals:

Tier 1: Direct Competitors  - They demand your closest attention and strategic focus.

Tier 2: Indirect Competitors - Monitor them, but prioritize less than Tier 1.

Tier 3: Potential Competitors - Keep an eye on their developments, but don't lose sleep over them yet.

Tier 4: Substitute Competitors - Understand their appeal, but don't get sidetracked from your core strengths.

Remember, just like mastering different workout routines, mastering competitor analysis takes practice.

References: Learnings from "Becoming a Product Manager Guide" by LinkedIn Learning x IIBA