5 Types of Competitors To Inspire Your Marketing Strategy

To generate more ideas for marketing your business, broaden your definition of competitors.

Your competitors can be a source of motivation and inspiration. This is particularly true in marketing where businesses can succeed with table stakes (eg, an active social media presence) and with publicity stunts (eg, Taco Bell “buying” the Liberty Bell).

Competitive research helps you decide what your business must do to keep up with expectations, and what you could do to stand out from the crowd.

The most challenging part of competitive research is to define who your competitors are. In this article, I’ll walk through 5 types of competitors–with examples–to help you define your competitive set more creatively. Taking a broader view before diving into your research will spark more inspiration. 

1. Direct Competitors

You know who your direct competitors are. Those are the businesses who are competing every day for the same customers that you are. You walk past their stores, you see their advertisements, or you hear their names in pitches. 

You already stay on top of their offerings to make sure that your business is keeping up – or ahead, ideally.

Some examples of direct competitors:

• Coke and Pepsi

• Apple and Microsoft

• Starbucks and Dunkin

2. Indirect Competitors

A business is your indirect competitor if it offers products or services in a related category to solve the same problem you’re solving. 

Here are two examples:

• A local pizza joint competes directly with other pizza restaurants in the area, but it also competes indirectly with the other restaurants in its neighborhood.

• An independent clothing stylist competes against other independent stylists, but she also competes against the stylist services at department stores like Nordstrom and Neiman Marcus. 

3. Replacement Competitors

A business is your replacement competitor if it offers a completely different product or service than you do, but it solves the same problem you’re trying to solve for your customers. 

Here are two examples:

• Movie theaters are in competition with streaming services.

• Public buses are in competition with ride-share services.

4. Parallel Competitors

It is important to know the competitors within your market and industry. But don’t hesitate to look outside to gain inspiration as well.

There are two ways to look at parallel competitors:

1. Identify businesses that offer the same services but in a different market.

2. Identify businesses that offer similar services but in a different industry.

When selecting competitors in this category, you can look for businesses that are operating at a similar scale as yours. You could also explore ones that are a few steps ahead of yours: those might provide insight into what the next stages of your marketing should be.

Here are some examples:

• A boutique hotel can look at boutique hotels in other states and countries. (Same industry, different market)

• A plumber can look at how electricians and roofers operate in the same region. (Parallel industry, same market)

• A local ice cream shop can look not just at ice cream shops but also at famous cafes and coffee shops in other cities. (Same industry, different market AND parallel industry, different market)

5. Aspirational Competitors

I’ll be honest: this category isn’t really a competitor category. These are businesses that draw you in personally or brands that you feel a connection with. They may be within your industry or completely unrelated to it. What’s important about aspirational competitors is that you already know their marketing works. That’s why these businesses will be a particularly rich source of inspiration for your marketing. 

To draw up your personal list of aspirational competitors, consider the following:

• What products do you use over and over again?

• Which brands do you default to when shopping for clothes, electronics, or food?

• Which companies do you admire?

• How would you answer the question: “What company has the best marketing in the world?”

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What To Do With Your Competitor List

Use these different competitor categories to draw up a shortlist of 6-10 competitors that you want to research in-depth. Try to include at least one competitor from each category. 

Now that you have this list, you’re ready to tackle your marketing competitive analysis. As for how to do that, stay tuned till next time!

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