Competitive Product: Definition + How to Analyze One

Written by Coursera • Updated on

Learn what competitive products are, what they mean for your business, and how to conduct a competitive product analysis.

[Featured image] Man showing group graphs of product performance on a projection screen

What is a competitive product?

Competitive products are goods and services that your target market might choose over yours. You can identify a competitive product by how similar its features and solutions are to your product. 

Competitive products can include:

  • Physical products, such as clothing and toys

  • Digital products, such as ebooks, online courses, and media streaming apps

  • Live experiences, such as parties, performances, and festivals

  • Professional services, such as consulting, coaching, and designing 

Types of competitive products (with examples)

There are three main types of competitive products to consider when investigating your competition:

  • Direct competitive products offer the same experience at similar price points as yours and target the same market. Examples of companies offering direct competitive products include McDonald’s, Burger King, and Wendy’s.   

  • Indirect competitive products are products in different categories and potentially available at different price points but targeted to the same market. For example, patients may choose between pharmaceuticals and naturopathy to treat their conditions.   

  • Replacement products offer customers alternatives to your products to solve the same problem. For example, a hungry customer might choose to pick up a packaged meal at Starbucks rather than find a sit-down dining experience if Starbucks is more convenient.  

What is a competitive product analysis?

Identifying and analyzing competitive products are important steps when launching a business, developing new products, or enhancing existing products. For example, a new rideshare company would need to examine services through Uber and Lyft to understand how to design a more appealing experience. This kind of examination is called a competitive product analysis. According to a 2022 industry report by Crayon, a competitive intelligence (CI) software company, 59 percent of CI practitioners surveyed say their markets have become more competitive since 2020. [1]

By taking these steps, you can:

  • Learn where you stand in your industry and how you compare to well-known brands.

  • Differentiate your products and services. 

  • Fill market gaps and reach untapped niche markets

  • Offer unique customer experiences. 

  • Market your products’ advantages over competitors’ products.  

Note this distinction: A competitive analysis is a holistic examination of competing brands, while a competitive product analysis focuses on products themselves. 

Placeholder

How to conduct a competitive product analysis 

Follow these four steps to conduct your competitive product analysis.

1. Identify and analyze your competitors. 

Even if you’ve already conducted a competitive analysis as part of your business plan or marketing strategy, take time to re-examine competitors, with a particular emphasis on competitive products. 

Gather as much publicly available information about competitors as you can from annual reports, websites, sales and product pages, email subscriptions, customer reviews, and social media. 

For each competitive product, answer the following questions:  

  • What are the distinguishing features?

  • How often are the features updated?

  • What are the benefits or outcomes of consuming this product?

  • What kind of marketing messaging does your competitor use to attract target consumers?

  • How is the product presented visually in photographs, videos, or mockups? 

  • How much does it cost?

  • What are the competitor’s sales figures?

  • What kind of promotional tactics does the competitor use, such as free trials, discounts, coupons, and value adds?

  • What do customers like and dislike about the product, according to reviews, testimonials, or social media posts?

2. Experience competitive products for yourself. 

Once you’ve gathered publicly available product details, your next step is to purchase each product or sign up for a free trial and experience it as a consumer would. Answer the following questions to compare your experience to the promise of the experience’s marketing. 

  • What is your experience of actually purchasing the product? Do you find it in a physical store, order it online, or receive it digitally or in the mail? Do you need to create an online customer account or gain entry to a live experience?

  • What do you like and dislike about the product?

  • Do you experience the promised benefits or outcomes? How so, and to what extent? 

  • How is the customer service experience — online, in-store, or by phone — when you contact them to ask about features or report an issue? 

  • Does your experience with the product justify its price?

3. Identify weaknesses in competitive products. 

Drawing from insights you gathered in steps one and two, compile a list of what the competitive product lacks. Completing this step can identify how to develop desirable products and outsell your competition.  

  • According to reviews and testimonials, what features does the product lack that customers want? 

  • From your experience with the product, what features are lacking that you would like to have and could add to your own product?

  • What features seem unnecessary or even a distraction? 

  • Would the product improve if you removed these features? 

  • What do you find difficult, cumbersome, or confusing about finding and purchasing the product? 

4. Identify your differentiators. 

Use insights from steps one through three to identify how you will differentiate your product and create a competitive advantage. Completing this step will help attract consumers in your target market, convert them into paying customers, and gain their loyalty. 

  • How can you develop product features that fill market gaps, meet customers’ expectations and desires, and stand out from competitors? 

  • What specific enhancements can you add?

  • What distracting features can you exclude?

  • What kind of user experience will these features provide? 

  • What kind of benefits and outcomes can your product offer? 

  • How will you price your product, compared to competitors’ pricing, and in consideration of your product’s value proposition and cost of producing it

  • What will be your method of market testing your product’s differentiated features to find out how potential customers experience them? 

  • Once you offer your product, what kind of marketing messaging will you use to emphasize the product’s advantages over competitors? 

Get started with Coursera

Taking an online course can be a great way to learn more about developing a business, offering competitive products and services, and succeeding in your industry. 

Learn how to navigate competition, keep your customer base, determine product prices, and more with the Advanced Competitive Strategy course. 

Placeholder

Related articles

Article sources

Crayon. “2022 State of Competitive Intelligence, https://www.crayon.co/state-of-competitive-intelligence.” Accessed February 25, 2022.

Written by Coursera • Updated on

This content has been made available for informational purposes only. Learners are advised to conduct additional research to ensure that courses and other credentials pursued meet their personal, professional, and financial goals.

Learn without limits