A Competitive Landscape Matrix Improves Marketing Strategies
Entrepreneurs, small business owners and even some medium-sized companies face similar challenges when it comes to marketing. Budgets are tight and resources are limited. As a result, measurable success and high ROI are critical.
And yet, technology has made marketing so multi-faceted and specialized that it’s daunting to identify the best strategies and tactics from the multitude of options. So how do you choose? Today’s modern marketing strategist must employ a number of different tools, filters and decision trees to identify the way forward. In this article, we will look at just one – the competitive landscape – and how it might affect your approach.
Competitive Landscape Matrix
Let’s start with a basic tool of business strategy – the Four Quadrant Matrix. Along the X-axis, we’ll place a continuum representing the number of competitors in your market. Along the Y-axis, we’ll place a continuum representing your market penetration. This creates the following four quadrants, going clockwise from the lower left:
- Low number of competitors and low market penetration.
- Low number of competitors and high market penetration.
- High number of competitors and high market penetration.
- High number of competitors and low market penetration.
Think about your competitive landscape and where you fit. Now, let’s take a look at how this might affect your marketing and content strategy.
Low Number of Competitors | Low Market Penetration
If you are new to a market with few competitors, you have a couple of big challenges ahead. First, your market needs to know you exist. A brand awareness campaign to boost your visibility in the marketplace may include digital and print advertising, event sponsorships or influencer marketing. A PR & Communications strategy focused on press releases and article placements in appropriate digital media channels can have a big impact on organic search results simply because there aren’t a lot of competitors to push you off the first page.
What about the message? Don’t jump the gun and over-emphasize differentiation at this stage. If you are new to the market and there are only a few well-established competitors, it may be more important to emphasize points of parity and credibility. Why should you be considered in the same league as your competitors and invited to submit a proposal or quote? Establish why you should be included in the conversation before arguing that you are the best choice. Leave that discussion for your sales team – for now.
Low Number of Competitors and High Market Penetration
If you are established in a market with few competitors, your challenge is different. Your brand awareness is high, so focus on demand generation instead. You can build a more sophisticated content strategy to move prospects through your sales and marketing funnel. Social media will become more effective as your networks develop and you have relationships with more influencers.
Your content and messaging approach will be different. Differentiation becomes important to your strategy, rather than parity. But even more importantly, consider how you can position your content to influence the decision-making framework to your advantage. Consider how you can elevate the importance of your competitive advantages, while diminishing the importance of those of your competitors.
High Number of Competitors and High Market Penetration
If you are well-established in a highly competitive market, your challenge becomes much more complex. With a high number of competitors competing for that first page of search results, and the high probability that list aggregators and media companies are pushing all market participants off the first page anyway, what are your options? You have to either earn your leadership in the market with an effective thought leadership strategy that separates you from the crowd, or you have to compete in a high-stakes paid-search arms race. (Or if you have really deep pockets, you can do both.)
This means you really need to understand the buyer journey. If you can’t win in the search game when someone conducts a specific search for your product or service in your city, how else can you engage your buyer? Does a facilities management executive looking for office cleaning services attend an annual conference where you can deliver a workshop on how your innovative hygienic cleaning system reduces the spread of colds and flu? Does a VP of Marketing engage in a search for a digital agency shortly after searching salary ranges for graphic design professionals? Think about how you can capitalize on a comprehensive knowledge of your buyer’s journey to outmaneuver your competition.
High Number of Competitors and Low Market Penetration
If you are in the last quadrant, you may be struggling for attention in a market with many competitors. This may be the trickiest position of all. With so many competitors, showing up in search results is difficult. With low market penetration and brand awareness, you probably don’t have the prerequisites to mount a successful demand generation campaign. And you haven’t established the credibility for a thought leadership approach. Your best bet may be an inbound lead generation approach based on a robust PR and communications strategy targeted at a point in the buyer journey where there is less noise in the market. This requires a lot of competitive research and a high degree of knowledge about your buyers’ journey.
Your messaging and content may be more successful focusing on points of parity with the market leaders and points of credibility that differentiate you from all the other competitors with low market penetration.
Know Your Competitive Landscape
The suggestions for each quadrant illustrate some of the ways you can use a competitive landscape matrix to analyze marketing opportunities. The realities of your market, your company and your products or services should guide your own analysis. And the outcomes may be quite different. Regardless, the competitive landscape matrix is a great tool for designing the right marketing strategy to accelerate your success.