What practice involves researching major competitors to gain insight into their products and marketing tactics?

Competitive analysis is the practice of researching major competitors to gain insight into their products, services, and marketing tactics. This process is crucial for understanding the competitive landscape within a specific industry. By examining what competitors are doing, companies can identify strengths and weaknesses of their own offerings relative to those in the market. This analysis aids in crafting strategies that can capitalize on competitor weaknesses or propose unique selling propositions that differentiate a company’s products or services.

In a competitive analysis, businesses often look at competitors' pricing strategies, marketing communications, sales tactics, and customer engagement approaches. The insights gathered can inform product development, marketing strategies, and positioning in ways that leverage the learned information to improve competitive standing. This practice ultimately guides businesses in making informed decisions about their own marketing initiatives.

While market segmentation focuses more on dividing a broader market into smaller, more defined segments based on certain characteristics, and market orientation emphasizes the importance of aligning a company’s products and services with customer needs and wants, competitive analysis is specifically about understanding and learning from the market competition. SWOT analysis, on the other hand, looks at strengths, weaknesses, opportunities, and threats from both internal and external perspectives, making it a broader strategic planning tool rather than a focused study of competitors.