Introduction
In today’s competitive marketplace, it is essential to determine the competitive value of a product or service. Businesses need to conduct a thorough analysis to understand what differentiates their product or service from their competitors in the market. Determining the competitive value of a product or service is crucial to understand its marketability, profitability and growth potential. It is not only determine how long our business will run but also determine how hard if another player wants to play the same game.
What is Competitive Value?
Competitive value refers to the distinctive features and benefits of a product or service that differentiates it from other competitors in the market. Customers always look for better value for money when purchasing a product or service. Therefore, creating a competitive advantage by offering better value for money can help businesses in increasing their market share, customer loyalty and revenues. Please keep in mind that competitive value can always transforming from one to another. If a particular competitive value already owned by some dominant players, we should jump to other competitive values. That’s why in industry, we know a unique patent is one of the greatest competitive value for product that can last for at least 3 years.
Steps to Determine Competitive Value
Step 1: Identify the Target Market
The first step in determining the competitive value of a product or service is to identify the target market. It is crucial to understand who your product or service caters to and their needs and preferences. Analyzing the market can help businesses gain insights into consumer behavior, competitors, and the potential for growth.
This simple technique (understanding market) is a key to get valid competitiveness among the competition. If you really understand who your target market are, you can deep dive to your target market minds and think about what their suffering most.
Step 2: Assess Competitors
The next step is to assess your competitors thoroughly. This means understanding their strengths, weaknesses, and their unique value propositions. Use market research to find out what strategies they are using to capture customers and steal market share. Analyzing the competition can provide valuable information to help businesses develop different strategies to differentiate themselves from their competitors.
furthermore, understanding competitors can help us to measure how strong our competitive value among others and how big our market is.
Step 3: Conduct Market Research
Market research is a critical component in determining competitive value for a product or service. This could be through customer feedback or surveys, product testing, analytics, and competitor analysis. The purpose of conducting market research is to identify the customers’ needs and preferences and help businesses adjust or adapt their product or service to match those expectations.
Most of founders, are too confidence about their product. This assume must be tested by conducting direct market research. Even if your product not ready yet, you can test the market by showing customer your prototype, mock up, or product tester and get some letter of interest (LOI) from them. This will validate your business model before you launch any product or services.
Step 4: Understand Your Unique Value Proposition
A unique value proposition (UVP) is a statement that conveys what customers can expect from your product or service when compared to your competitors. It should include the benefits offered and why customers should choose your product. By understanding your UVP, you can better communicate your product’s value to potential customers and differentiate yourself from the competition.
Sometimes, a UVP not always to be unique. Yes, it could be something normal. But should be super normal. A super normal product can be a UVP because some people do not need a fancy or cutting edge product. They just need to use the product for its purpose only, without any built in modification.
Step 5: Consider Price and Quality
Pricing and quality are two critical components of determining the competitive value of a product or service. Customers are always looking for the best quality product at a reasonable price. Businesses should consider setting a price that offers good value for money while maintaining profitability. Quality is another aspect that customers consider when purchasing a product or service. Products or services that can offer high-quality standards can gain a competitive advantage.
Do not forget that if your product are super good, you need to set higher price. Because people in higher class, want to pay more for represent their wealth. Cheap means poor product for them. So, it should be rationale. You can not sold a good product for 1 dollar when its competitors with same value sell it for 100 dollar. People will not believe in your product.
Conclusion:
In summary, determining the competitive value of a product or service requires businesses to conduct thorough research on their target market, competition, and their unique value proposition. By understanding these components, businesses can develop strategies to differentiate themselves from the competition, increase customer loyalty, and drive revenues. Analyzing pricing and quality standards can also help with differentiation while ensuring profitability. In conclusion, determining the competitive value of a product or service is essential to gain a competitive advantage in today’s marketplace.
11 April 2023