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Why knowing your competition is important to your marketing plan

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Many business owners tend to downplay their competition when they are considering both their business plan and their marketing plan. If you are a business owner it is imperative that you understand that no matter how great or unique your product or service is you will still have competition. Knowing who your competition is and how they operate is crucial to designing an effective marketing plan. If you choose to not consider what your competition is doing or you simply fail to acknowledge them then chances are that you will miss the mark when it comes to your marketing plan. Here is why knowing your competition is important to your marketing plan-

There are different ways that you can look at who your competition is. The first step is to check out the competition that is closest to you. This type of competition can be referred to as direct competition. These are the businesses that are offering something that is the same or somewhat similar to what you offer. These are also the businesses that your customers will have the easiest access to should they not be shopping with you. They will be looking at the same target market as you are. Keep in mind that these are the businesses that you should keep the closest watch on since what they do will most dramatically affect your business and how you market.

The next category of competition that you should be watching is those businesses that offer a viable substitution for your product or service. These businesses may be watching you closely to determine how they can make inroads with your target market. They will be trying to determine how they can position their product or service with your customers to show them an alternative they may not have thought of. This often happens with a business that is striving to show that they can fill the need or want your customers have by offering them a cheaper alternative. Knowing what they are doing and how they are marketing their product or service will be crucial to how you are marketing yours.

The final category of competition that should be considered is those businesses that are up and coming. While they may not exist or even pose a threat to your market share you should always be considering them. It is crucial that you continue to keep your products and services relevant to the marketplace if you are going to continue to be a viable and long term successful business. You want to carefully consider the position you have in the market and how future businesses may be considering their position in relation to you.

You should also keep in mind that there is new kind of competition. Once businesses only had to consider their competition as locations that their customers could physically reach. Today, because of the internet competition can be found in any of these categories throughout the world. Even if you do not sell directly online you should be aware of the online reach of your competition and know what they are doing to market their product and services even if they are half a world away.

Finally, you should keep in mind that any competition can switch from being one type of competition to another. This means that you should watch all of your competition closely and have a clear understanding of exactly what their weaknesses and strengths really are. While you most likely won't be able to keep a detailed dossier on every competitor (nor should you take the time), having a general understanding of who your competition is and how they market is crucial to your own marketing success.

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