Have you ever wondered how your business stacks up against the competition? As a business owner or marketing manager, gaining insight into your position in the industry is crucial to success. Understanding where your competitors are situated and where the opportunities lie can inform your strategy and future direction. This is where market mapping comes in handy!
Market mapping is the process of visually representing your company in relation to competitors based on metrics like revenue, growth, products offered, and more. Also referred to as competitive landscape mapping or positional mapping, it provides an aerial view of your business and others in the market. Mapping out the field allows you to identify strengths, weaknesses, threats from rivals, and areas ripe for the taking.
Types of Market Mapping
When creating a market map, you typically focus on one of three core areas: the competition, your products, or your target audience. Each angle provides valuable intelligence to guide your game plan.
The first approach analyzes key players in your space. Competitor maps compare your performance over time to other brands on factors like:
- Annual revenue and growth rate
- Total addressable market and market share
- Geographic reach
- Pricing and product range
- Perception and popularity
Viewing this landscape helps identify close rivals who offer similar value propositions. It also reveals potential partner companies or acquisition prospects that could accelerate growth. Most importantly, competitor maps determine threats looming on the horizon and where competitors are failing to deliver something customers want.
Alternatively, product mapping focuses attention inward by benchmarking your portfolio against the competition. Here you plot products on a spectrum of price versus perceived quality. This highlights gaps where you may be over or undervaluing offerings relative to substitutes available.
In addition, you can overlay unique features and innovations to showcase differentiated value you provide shoppers. Doing so aids pricing decisions and indicates where to ramp up or reduce investment across goods.
Consumer mapping flips the script to the demand side of the equation. Also called market segmentation, this approach divides your total addressable market by demographics and buyer persona.QueryParameters you would analyze include:
- Age, gender, income level
- Geographic location
- Psychographics like values, interests and pain points
- Purchasing factors and shopping habits
Getting granular with your audience provides clarity regarding who your products best resonate with now. It also reveals untapped segments to direct marketing dollars toward for tomorrow.
Creating a Market Map
Now that we’ve covered common mapping perspectives, let’s discuss how to actually build one for your small business. While formats vary, the process entails five key steps:
Define Your Market and Competitors
First, narrow down the marketplace and brands to include. Assessing the entire economy would prove overwhelming. Instead focus on your niche industry, direct rivals, key suppliers and major customers. This keeps the analysis targeted and actionable.
Identify Your Differentiators
Next, clarify what uniquely sets you apart so it stands out in the map visuals later. Be honest regarding strengths and weaknesses compared to substitutes patrons mull over. Your differentiators form the basis for strategic decisions down the road regarding pricing, promotions and new offerings.
Research the Competition and Consumer Landscape
With boundaries established, dive deep into gathering market intelligence. Analyze sales data, customer reviews, press coverage and product specs for your own brand and competitors. Survey clients directly too regarding preferences, decision drivers and brand affinities.
The goal here is to compile hard performance stats and consumer perceptions that the upcoming map will visualize for easy interpretation. Tools like Nielsen rankings, Google Trends and SEMRush make this competitive analysis more efficient.
Establish Relative Market Shares
At this point raw data points should start shaping an image in your mind regarding market positions. Now switch to calculating figures like revenue share, growth percentages and category benchmarks so you can plot brands precisely on the map relative to each other.
Public financials and third-party estimates provide quantitative accuracy and confidence in the territorial landscape you’ll illustrate next. Just remember statistics support the mapping but actual strategy must consider real shopper attitudes uncovered earlier.
Map it Out Visually
Finally, choose metrics for the X and Y axes that best represent your priorities for the project aims defined initially. Common options include price, quality, feature scope, prestige, convenience, trustworthiness and value. Then plot competitor brands accordingly based on strengths and weaknesses uncovered.
Seeing spatial relationships between industry players crystallizes practical implications much better than pure stats alone. Software exists to produce snazzy graphs yet even hand sketches on a whiteboard can spark strategic insights at this visualizing stage.
Benefits of Market Mapping
Constructing even basic market maps clarifies situations and reveals opportunities otherwise hidden in plain sight. Common advantages for small businesses include:
Estimating Future Markets
Maps make trends visually evident based on recent trajectories. For instance, brands moving upward and right indicate rising quality and prices industry-wide. Such patterns forecast what innovations and costs to expect across player portfolios long-term.
Likewise, clustering signals commodity status while outliers point to differentiated value propositions. Estimating where things head provides foresight to get ahead of consumer demand curves.
Recognizing Main Competitors
Maps also highlight who offers the most similar value proposition as you. Nearby neighbors on the graph often sell to the same shopper personas, fight over patrons daily and thus represent prime threats.
Distinguishing these archrivals helps focusing marketing contrast messaging and new product development specifically against their weaknesses. Rivalry also motivates innovating before copycats catch up.
Refining Market Strategies
Most importantly, properly constructed maps reveal strategic insights to strengthen your footing. Large gaps between price tiers showcase opportunities to create sub-brands serving area needs. Outliers lacking nearby competition indicate rising stars you may want to acquire while still affordable.
Alternatively overloaded segments signal pricing umbrellas with room underneath for “good, better, best” tiering. Strategic decisions become obvious through the spatial illustration market mapping provides.
Challenges and Considerations
While insightful when done well, market mapping does present challenges to factor in too. For one, performing thorough competitive analysis takes extensive time and effort upfront. Data must be accurate and unbiased as well, avoiding merely wishful thinking.
Also, mapping’s two axis format oversimplifies multifaceted market dynamics. And quantitative plots alone overlook emotional purchase drivers revealed only through talking with actual buyers. So while an analytical tool, market mapping should inform rather than replace core strategy rooted in customer value.
How Does Market Mapping Utilize Data as a Critical Organizational Asset?
Best Practices for Market Mapping
Given these cautions, maximize insights while minimizing limitations using these mapping best practices:
Define Specific Objectives
What exactly do you want to discover or prove through mapping? Different goals require analyzing unique variables. Pursuing too many questions at once results in distorted visuals reflecting nothing well. State the single burning issue upfront.
Narrow the Focus
Analyze only facets of the market relevant to purposes defined above. Comparing everything bogs down and obscures the specific thing you want to showcase. Frame the scope around providing clarity on that solitary strategic objective.
Spotlight Your Differentiators
Call attention visually to the very proprietary strengths or weaknesses central to strategy aims. Use marker iconography, labeling and coloring to emphasise what makes you special (good or bad) relative to alternatives.
Lean on Current Data
Stale competitor data leads to flawed maps failing to reflect recent market innovations correctly. Seek the newest datasets available to sketch an up-to-date, accurate snapshot of current industry positioning.
Repeat the Process
Finally, revisit mapping every quarter or annually. Markets change constantly. Set a calendar reminder to update depictions and keep strategies aligned with fresh realities revealed in new maps.
Knowing precisely how your enterprise aligns amongst the competition grants confidence for business owners. Market mapping paints this exact picture clearly through side-by-side graphical comparison on important yardsticks. Sizing up rivals reveals threats to defend against and opportunities to seize the advantage.
Now equipped to map your niche, get started with competitor research. Identify your differentiators and chart relative market positions. Refer often to the landscape depicted as strategies adapt to ever-changing consumer demand. Maintain sight on the adjacent offerings buyers weigh as alternatives. This grants perspective and focus to guide plans toward growth and sustainability over the long-run.