Competitors

Competitor analysis or the monitoring of competitor use of Internet marketing for acqui sition and retention of customers is especially important because of the dynamic nature of the Internet medium. As Porter (2001) has pointed out, this dynamism enables new services to be launched and elements of the marketing mix such as price and promotion changed much more frequently than was traditionally the case. Copying of concepts and approaches may be possible, but can on some occasions be controlled through patenting. For example, Amazon.com has patented the 'One Click' approach to purchase, so this term and approach is not seen on other sites. The implications of this dynamism are that competitor benchmarking is not a one-off activity while developing a strategy, but needs to be continuous.

'Benchmarking' is the term used for structured comparison of e-commerce services within a market. Its purpose is to identify threats posed by changes to competitor offerings, but also to identify opportunities for enhancing a company's own web services through looking at innovative approaches in non-competing companies. Competitor benchmarking is closely related to developing the customer experience and is informed by understanding the requirements of different customer personas as introduced earlier in this chapter.

Traditionally competitors will be well known. With the Internet and the global marketplace there may be new entrants that have the potential to achieve significant market share. This is particularly the case with retail sales. For example, successful new companies have developed on the Internet who sell books, music, CDs and electronic components. As a consequence, companies need to review the Internet-based performance of both existing and new players. Companies should review:

• well-known local competitors (for example, UK or European competitors for British companies);

• well-known international competitors;

• new Internet companies local and worldwide (within sector and out of sector).

Chase (1998) advocates that when benchmarking, companies should review competitors' sites, identifying best practices, worst practices and 'next practices'. Next practices are where a company looks beyond its industry sector at what leading Internet companies such as Amazon (www.amazon.com) and Cisco (www.cisco.com) are doing. For instance, a company in the financial services industry could look at what portal sites are providing and see if there are any lessons to be learnt on ways to make information provision easier. When undertaking scanning of competitor sites, the key differences that should be watched out for are:

• new approaches from existing companies;

• new companies starting on the Internet;

• new technologies, design techniques and customer support on the site which may give a competitive advantage.

As well as assessing competitors on performance criteria, it is also worthwhile categorising them in terms of their capability to respond. Deise et al. (2000) suggest an equation that can be used in combination to assess the capability of competitors to respond:

Agility x Reach

Competitive capability =-

Time-to-market

Competitor analysis

Review of Internet marketing services offered by existing and new competitors and adoption by their customers.

'Agility' refers to the speed at which a company is able to change strategic direction and respond to new customer demands. 'Reach' is the ability to connect to or to promote products and generate new business in new markets. 'Time-to-market' is the product life-cycle from concept through to revenue generation. Companies with a high competitive capability within their market and competitive markets are arguably the most important ones to watch.

Companies can also turn to benchmarking organisations such as Gomez (www.gomez.com) to review e-commerce scorecards. In some sectors such as banking, competitors share data with a benchmarking organisation, enabling them to see their relative performance (without knowing actual sales or efficiency levels). An example is eBenchmarkers, which in the UK produces reports for different financial services markets. Performance criteria are related to the conversion efficiency introduced earlier -companies are ranked relative to each other on their capacity to attract, convert and retain customers to use their e-commerce services.

To assess the success of competitors in generating visitors to their web sites, a variety of data sources can be used; the methods of collection are explained further in Chapter 9.

• Panel data can be used to compare number and type of visitors to competitor sites through time.

• Summaries of ISP data such as Hitwise (www.hitwise.co.uk) can be used to assess visitor rankings for different competitors.

• Audits of web site traffic such as that produced by ABCelectronic (www.abce.org) can be used for basic comparison of visitors.

We revisit competitor benchmarking in more detail in Chapters 4 and 7.

Success For Affiliate Managers

Success For Affiliate Managers

Explode your Affiliate Income Today By Learning FIRST How To Become A Successful Affiliate Manager! Do you want to know everything there is to know about running a successful affiliate program that brings you money on autopilot? Then get your hands on this brand new e-book.

Get My Free Ebook


Post a comment