How to identify competitors to monitor

Competitor. It can be a company, product, or service with which you are competing for the end consumer. In turn, a competitive product is a product that can attract or repel customers.

Often, when starting the process of competitor monitoring, it is taken as a goal to track the activities of all at once. If we consider this task solely in technical terms, it is possible, but there are reservations about the feasibility of such a large-scale parsing.

Therefore, the first thing to do is to identify a number of major competitors, whose pricing strategy directly affects the success of your business proposal.

Competitor classification. Whose pricing policies are subject to critical parsing and who can be ignored altogether?

Typification of competitors can be carried out according to a number of parameters, including:

product category of products sold;
consumer group;
market share, etc.

direct and indirect are the main two groups of competitors that are subject to price analysis:

direct - the group of direct competitors. These are representatives of the market who sell similar goods, in the same market and work with the same target audience. The activity of such "players" can have a significant impact on the sales of your company, both for the better and for the worse.
Indirect - competing organizations that sell similar products with different characteristics or completely different products. In this case, the work is done with your target audience.

The main sources for collecting information about potential or active competitors are Internet searches, surveys of market experts, monitoring of product sales meters, analytical articles and industry reviews, consumer surveys, as well as thematic exhibitions, conferences, etc.

Types of competitors' by-products and/or works produced

The following 3 categories should be identified in this question:

Products are similar to your products. These are products that do the same work using the same method. One prime example is a pair of competitors "the McDonald's restaurant chain and KFC". Both establishments are in the fast food category and make similar products.
Substitutes for your assortment. In this vein, you need to highlight products that are designed to achieve the same goal, but in different ways. For example, the consumer needs to satisfy hunger quickly. The Spicy Big Mac's competitor, in this case, would be Mars or Snickers, for example.
Alternative Products. Products in this group do a radically different job and aim to achieve a different result, but require the same resources of the buyer (money and time).

All of the above-mentioned typing of competitors has no meaning and no value in itself. Its relevance is noted only if the collected data will be used for something in the future.

When is it necessary to monitor competitors?

A practical approach shows that competitor analysis is especially useful in cases where

At the stage of business planning. This stage involves finding and studying your competitors. Here you will have to decide on the product to be developed/realized. During business planning, the main characteristics of the product are also established and its price is formed. The development of promotion methods is initiated, and also the forecasts of selling the product in the given conditions are made.
During the global market research. Competitor monitoring is one of the main stages of the process. Based on the received information the SWOT analysis is made, and its results allow to creation of a plan of confrontation with competing companies.
At the stage of realization of planned marketing tasks. It is important to organize the analysis of competitors on a constant basis. It will allow to keep abreast of all occurring events inside the market and react to its changes in time.

The main parameters of competitor monitoring and the importance of each of them

The activity of the key market players can be analyzed according to the following parameters:

Frontal marketing analysis. At this stage, it is necessary to study general marketing information. It is recommended to focus on 2 key aspects:
- Cost data for the range of products of interest. As a rule, this information is available on the site, on product pages in the catalog.
- Information demonstrating the level of popularity of the company. This data is available using special services such as "Google Analytics", etc.
The content and usability of competitors' sites. It is important to study the materials for a portfolio of works, photo-reports, completed projects, cases, product reviews, etc. If there is a large range of products, it is recommended to implement search segments and filters on the site. Study how this task is implemented on the competitors' sites.
Work with thematic resources. When analyzing the work of competitors with such platforms the following points should be taken into consideration
- what resources the firm works with;
- with what frequency publications are posted;
- whether the store uses discount services/pay platforms.
Advertising. The effectiveness of your opponent's contextual advertising should be evaluated using special services. Using the same services it is possible to define the average budget and traffic volume of your competitors.
Monitoring of the sales department. To do this most often uses the method of attracting mystery shopping. It makes use of all the available communication channels offered by your competitor: a text message to your online consultant, a call to your manager, inquiries to the online store, etc.

Monitoring of pricing policy is one of the most effective methods of fighting your competitors and optimizing your business strategy

The procedure of parsing competitors' websites is carried out in a few key steps:

Limit the number of competitors for subsequent monitoring. Emphasis should be made primarily on direct competitors, and market players that directly influence the behavioral activity of your consumer.
Use only open information pages. You can maximize the effectiveness of price monitoring by referring only to those pages of the site that can be visited by anyone in the network (without mandatory registration, etc.).
Set the optimal frequency of parsing. The data update period is set individually for each competitor. Some resources update the price list once a week, while others do it daily.
Analyzing the data and choosing the right pricing strategy.

With the Helecos software, the whole process of competitor price policy monitoring can be fully automated according to the parameter values you set during the setup phase.

Dumping and its threat to Manufacturers

In 2022 the most dumping industries are considered to be: sales of construction materials; the market of computer goods and services; everything related to electronics; the beauty industry and some others. At the same time, the danger of price dumping for producers is no less than for retailers.

Losses of goods producers from regular uncontrolled dumping of their representatives on the market:

Loss of customer confidence in the brand's products in the face of their customer. The lowest price is not a decisive purchasing factor for all customers! For many consumers, the lowest price for a product is a sign of an unscrupulous seller or poor product quality, which leaves an "imprint" not only on the particular store but also on the brand!
Reduced interest in cooperation for the large participants in the market network. Uncontrolled dumping eventually leads to a decrease in the planned profit from sales. This point is the key reason for the refusal of cooperation.
Complete brand destruction with imminent withdrawal. Chaos is the only imminent outcome of uncontrolled price hikes on your products! If there is no way to control the prices set by retailers for products in a particular region, it becomes more justifiable to cease operations within that market.

It is always easier to stop dumping in its initial stage than to think about what to do with its consequences when a low-price policy will be accepted by the majority of sellers. Daily systematic monitoring of competitors' pricing policies is the best solution to effectively combat uncontrolled price dumping.

Marketplaces are the most persistent violators of price controls. Let's identify "violators" with Automated Price Monitoring software

A marketplace is a marketplace where all processes are controlled by a single company. A large number of different sellers are concentrated here and bidding is performed according to a common algorithm established by the controlling company.

Key differences between marketplaces and online stores:

The number of sellers. In an online store (the only seller on the site) there can be products of one or more brands. There are also restrictions on the categories of goods. Marketplaces, on the other hand, have hundreds of selling companies with numerous brands and different categories.
Availability of offline outlets. Online marketplaces can operate both online and with the sale of products through physical sales outlets. Marketplaces, on the other hand, can have a maximum of product delivery points (without retail stores).
Number of clients. The owners of marketplaces have considerably more opportunities for advertising, including financial. Advertising - promoting their site on the Internet, as well as attracting new customers.

What types of marketplaces do modern parsers work with?

In addition to common marketplaces like Rosetka or Amazon, where products are offered directly to the end consumer, business and industry marketplaces are also widespread:

B2B platforms. On such sites, the policy is based on mutually beneficial cooperation between business owners (All-Biz, Alibaba, and others). Such resources make it possible to find a large number of foreign suppliers as well as to buy goods at wholesale prices by placing large orders on wholesale conditions.
Financial. In such online marketplaces, you will have the opportunity to compare and contrast financial products offered by different banks. Loan or microloan services are also available here. You will also be able to make investments in stocks or securities, arrange and open a deposit, etc.
Insurance. This type of site resembles a financial site as much as possible. They offer the services of a great number of insurance companies. You can draw up and sign a contract with any of them right online, without leaving your home.
Message boards. Such services provide online marketplaces for sellers to further sell goods/services. However, such resources pose a danger to the buyer, as it is often possible to buy contraband or counterfeit goods.

Monitoring the pricing policy on these types of resources is the basis for subsequent pricing of their goods! By including these sites in your monitoring program, you get information on the activity of your competitors outside their internet stores.

Features of competitor price monitoring on marketplaces:

A key feature of parsing on marketplaces is that one product can be offered simultaneously by several sellers on one and the same site. The sellers themselves are not known in advance. In addition, there are the following subtleties:

The layout and structure of the considered sites differ significantly from the classic online stores. In this regard, the development of unique system settings will be required to set up the data collection process.
Identifying dumping on the marketplace is not enough! You need to establish the seller to take adequate anti-dumping measures. This is often done by monitoring the purchase of products from offending partners.
Frequency of monitoring. When working with marketplaces, this parameter should be increased several times! This can be explained by the free pricing policy on such sites, which is not controlled by their owners. Many sellers successfully use this prospect for dumping!

Competitors' product price is one of the key pricing factors for your product range!

Parsing of online stores and marketplaces is ultimately aimed at obtaining information on price tags set for similar products of your competitors! Yes, it allows you to guarantee the absence of uncontrolled dumping in the thematic market, but this is not the only parameter of pricing your product card!

Factors that form a competitive and favorable price for the seller - taking into account the report on the parsing of competitors:

Market saturation (degree of competition). The wider the market, the greater the need for the use of automated competitor monitoring systems. After all, it is the price tag that determines pricing.
Demand and its elasticity. The higher the demand for products, the more justified an increase in the price tag will be. If the demand for the goods decreases, the cost will take a vector to decrease in order to keep sales and profit.
Target Audience. What group of consumers is the product aimed at? It is mainly about the solvency of your buyers - the higher it is, the higher the price and profit in the end.
The terms of purchase are dictated by the suppliers. Low cost of raw materials - a small cost of production. This allows you to set the best price for the buyer. Otherwise, the premium will be made by sellers, unrelated to production costs (fuel, gas, electricity, etc.). This is about the fact that the price of the product can be affected by price hikes in gasoline and other resources, not just dependent on the production process.
Inflation. During this period, monetary assets lose value, which can lead to a sharp increase in rates. Most often, this trend is associated with an increase in the rates of raw materials in the world (oil, energy, gas, etc.).

Set your business goals and objectives, define your target audience with their ability to pay, and establish the competitive environment - you are ready for the price monitoring of your competitors, followed by the pricing of your assortment.

The competitor monitoring report from Helecos will give you the most complete information about your competitors, taking into account product price lists, promotions, and special offers for buyers. There is a free test period of the product, as well as constant contact with the support service of the service.