By Paige Bennett

Competition is essential for growth, but only when a business properly evaluates its competitors and betters itself to keep up. Even in marketing, analyzing the competition is healthy and can help inspire you to learn and adapt the business to better meet consumer needs.

Part of the way to do this is by understanding direct and indirect competition and how each can impact your work. Once you know the differences, you can determine how to best identify and evaluate your competitors — both direct and indirect.

What is direct competition?

When you think of a marketing competitor, you likely think of your direct competitors. Direct competitors are other businesses offering the same services for the same client needs in the same market as you.

So, let’s say your marketing firm primarily works with restaurants in the western U.S. There are certainly other firms focused on restaurant marketing specifically in the western U.S., and those firms would be your direct competition.

Even the smallest markets will have direct competition, which is important to prevent monopolies.

Direct Competition Examples

There are many examples of direct competition. McDonald’s, Wendy’s, and Burger King are all direct competitors. Similarly, consider the infamous fast-food chicken sandwich wars, when major restaurant chains like Popeyes, KFC, Wendy’s, Zaxby’s, and more all launched chicken sandwiches to appeal to the same consumer base across the U.S..

Competition doesn’t just apply to huge, national or international brands. Two women’s fashion boutiques in a small, rural town are also direct competitors.

Digital companies also see direct competition. For example, Instagram and Snapchat offer very similar features, like disappearing stories and direct messaging, to their target audiences.

Indirect Competition Examples

Let’s say we have a client base in a small town. The customers are hungry, and often frequent the main drag to have dinner. Here, there are four major restaurants — all of which offer different types of food. Although the products they offer are different, the restaurants all stand for the same purpose: to feed hungry clientele in the town.

Similarly, consider a client who needs to buy gifts for a birthday party. One store sells clothing. A store across the street sells jewelry. Despite the different products, the two stores are competing for the same customer.

Direct and Indirect Competition in Marketing

When it comes to marketing, knowing your direct and indirect competition can help you improve your campaigns and even reach new audiences.

The aforementioned chicken sandwich wars are a great example here. Popeyes launched its highly touted fried chicken sandwich with a powerful marketing campaign. Direct competitors — other fast-food restaurants that sell chicken sandwiches — were able to use marketing to showcase their own entries into the so-called competition.

The result? The chicken sandwich wars have been heavily covered by major media for the past couple years. Customers have lined up in droves at various fast food restaurants to try the latest and claimed-to-be-greatest chicken sandwiches.

On the other hand, analyzing your indirect competition can …read more

Source:: HubSpot Blog

Author: Aaron