Benchmarking is an observation process of the products or services offered by the leaders in the industry. And is important to have a reference point on what a new product need to have to compete with them.
A new product or service idea have special characteristics that make it valuable in comparison with the current offers (the described items in the value proposition of the business model canvas should serve as a reference).
During the planning of a new product idea, one of the most important consideration is the launch to market stage. The acceptance from the customers target should come from the differentiators that the new product offers. That’s why is important to take in consideration what are the existing offers with the new product will compete.
How to perform a benchmarking for a new product?
1. Identify the main competitors
The main competitors could be the ones who offers a product like the one in the planning or the ones who offers an alternative solution to an existing need in the market. The first ones are the direct competitors and the other ones are the indirect competitors.
To identify the direct competitors is need to search who are selling a product like the product idea and start to listed them.
To identify the indirect competitors is need to understand what is the main problem that the new product will solve. This will help to understand what other solutions are in the market covering that need.
2. Create a characteristics comparison between the competitors
A comparison is important to classify what the disposition level of every competitor with all the characteristics. A better visualization of a comparison is in a table.
The main characteristics to have in consideration comparing the competitors are:
- Target segments: what are they focused on to attend?
- Unique product: are they offering a one in the market product?
- Main value: what are they main differentiator for the customers’s interest?
- Time of existence: how long have they been offering their product?
- Main customers: name the main customers to analyze the potential consumption?
- Main alliances: what are helping to perform?
- Price: the amount available for the customers?
- Features: general description of the main features.
3. Make a deep research about the top competitors from the table
After the characteristics comparison between the competitors was made, is important to understand the top competitors in a deepest way. This allow to define strategies about how to approach the customers and get them to use it.
A deep research about the top competitors should include (based on the Productize book).
- Company name
- Logo
- Website
- Company highlights (value proposition, how they sale)
- Market information (target, customers, channels)
- Methodology (key partners, key activities)
- Results (historical of recent performance, opinions, use cases)
- Product features (what they offer)
- Pricing
- Packaging
- SWOT (strengths, weakness, opportunities and threats)
Why is important a benchmarking for new products?
Using the information found about the competitors characteristics will help to shape and improve the value proposition of the new product in the making.
In business modeling stage of a new product is important to understand the target market and what are the current players offering.
What’s next after the benchmarking?
The benchmarking will be useful to understand the current offer in the market and to be prepared to offer a better solution for the an existing need. When the product is launched the main focus have to be on the users behavior.
That’s why is important to maintain an active observation of the main competitors and to define an active listening for the customers opinion (VOC).