Online Briefing Template
Our last post looked at how product testing is your secret weapon to achieving product superiority. With that, we looked at benchmarking as a way to gain powerful insights to improve product performance and market share.
In this post, we will take an in-depth look into one of the most effective types of benchmarking, competitive benchmarking. This is where you can use information about your competitors’ products to guide improvements on your own.
Competitive benchmarking is particularly favoured by the food and beverage industry, and for a good reason. It provides valuable insights as to why consumers pick a competitor’s product over yours and what you can do to turn that around.
Just as the name implies, competitive benchmarking is the practice of comparing your product to competing products.
Independent third-party market research companies conduct various tests to:
Information from your internal sources, such as sales data, can only go so far. You can see that you have a problem (sales are dropping) but not the underlying cause –the “why”. That’s where external data can help you measure your success.
If your market has become price sensitive and are willing to go to a competitor because of that, competitive benchmarking will confirm it. You’d otherwise only be able to tell with speculative guesses.
Competitive benchmarking will further reveal your audiences taste preferences allowing you to figure out where you can make product formulation changes that will enable you to reduce your prices without losses and retain market share.
“19% of consumers say superfood claims would encourage them to order a dish or beverage from a restaurant.”1
Besides consumers needing to tighten their belts, there could be other factors that influence your target audience’s decisions. These are subjective and could be linked to trends or the mere fact that our actual tastes can–and do–change.
For example, there could be a trend to move away from products packaged in glass, because plastic doesn’t break if you drop it. Perhaps your consumers have become more conscious about the amount of sugar or salt in products?
Surveys may reveal this information, provided you knew to ask the right questions from the onset. Competitive benchmarking let’s your consumers put the finger on why they specifically choose your product or another.
You’ll also gain quality insights into what your competitors are doing (what is clearly working) and see what you can adopt. You then perform a second test to see how much you have closed the gap, allowing you to perfect your product before you go to market. That way, you can ensure a higher return on investment.
“Right now, Middle Eastern ingredients are being used in new ways, desserts are becoming less sweet, and functional ingredients are contributing both color [sic] and flavor [sic] to dishes” —Mintel Menu Insights
Market Research from Mintel1 recently revealed that “19% of consumers say superfood claims would encourage them to order a dish or beverage from a restaurant.”
The short answer is to guarantee that you get accurate data specific to your objectives.
Competitive benchmarking testing is a science. It takes years of training to develop the skills to design and conduct tests that will give you the exact information you need to reach your goals. New technology and mythologies are developed all the time, a professional market research company makes sure that it is always up to date.
If tests don’t follow the strictest protocol, your results could be skewed, sending you down the wrong path altogether. It’s far too big a risk to go through all that effort and costs on reformulation or new design that bombs out in the market.