Indirect competitors are those which do not sell the same products or services but who sell products which may satisfy the same customer need.

You undoubtedly know who many of your direct competitors are: the businesses which sell the same products and services you sell. Much, possibly all, of your marketing may be directed at luring those company’s customers to you. But you also have indirect competitors and understanding them may be as critical to your long term health as the other.

The simplest example might be carbonated sodas. Obviously, Coke and Pepsi are rivals for the same customer dollars. But both indirectly compete with manufacturers of juices, bottled water, sports drinks and bottled tea products, among others. When you decide to have a Coke, then purchase an Ocean Spray juice instead, you have satisfied the need, but not with a direct competitor of Coca Cola carbonated beverage company.

Understanding your entire competitive environment is central to the health of your business. Your indirect competitors may be in different industries, deliver the product in different ways and appear to be competing in a different environment altogether, but if your customer makes a choice to spend the same dollars s/he might have spent with you on an altogether different product, then you have a competitor.
For instance, if you own a white table cloth restaurant, you know that other eateries who serve similar cuisine are direct competitors. Somewhat less direct are those which serve different cuisines. Your indirect competitors may include such disparate food choices as the food bar at Whole Foods and companies which deliver prepped, uncooked meal packages. Your customer wants food of a certain quality and can obtain it through various means.

Indirect CompetitionIn today’s world most of you are also competing with internet providers of everything from books and toilet paper to movies and building supplies. Even service companies have internet rivals in wide variety of areas.
When you evaluate your indirect competitors, consider how your customer may think about the dollars he or she is committing. The mini golf course who has a customer base of 65% families with children may have an indirect competitors in PG rated movies, child-friendly museums, zoos, and other family activities.
So how do you determine who your indirect competition is? As always, talk with your customers, where appropriate, follow social trends. Do research on your market to determine why customers are spending their money with competitors.

Developing a marketing strategy for indirect competitors is much like any other. You need to find out:
• What need or needs your products or services are satisfying;
• What other products might satisfy the same needs;
• How your products or services are similar to and different from the others in the market;
• What are your competitors strengths and weaknesses;
• Whether price is a factor;
• How you can overcome your indirect competitors.

Share This