Day in and day out I have clients tell me “this product does not have any competition”, yet that statement couldn’t be farther from fact and reflects a misunderstanding of the term “competition”.  In the broadest interpretation, ALL products compete for the consumer’s dollar, and in that sense, every product out there, that the consumer can choose to buy, instead of yours, represents a form of indirect competition.  For example, a consumer may be on the way down to the hobby store to buy a remote control toy airplane and instead, change his mind at the last minute, and choose to buy a new mountain bike, which he sees displayed in the bike store window right next to the hobby shop.   For the purpose of our evaluation, we will limit the definition of “indirect competition” to mean those products which can actually be used as a substitute for your product.

As an example, alcoholic beverage manufacturers face DIRECT competition in the form of other alcoholic beverage manufacturers and makers of simulated products such as non-alcoholic beer and wine.  They face INDIRECT competition from companies that manufacture soft drinks, flavored carbonated waters and bottled water which can be consumed at a party as a substitute for an alcoholic beverage.

The new product evaluator must investigate existing competition to determine the level of difficulty or “barriers to entry” for the existing competitor to introduce a new competing product to the market, and also to determine the difficulty of maintaining and growing market share once the product is introduced.

The evaluator should determine where the battle for market share will be fought.  Will it be on price, advertising, product features, packaging, etc.  This study will help to determine whether the product developer is capable of penetrating the existing market and competing with the established players.

The investigation should include:

1. An Internet search for similar products using the Google search engine at http://www.google.com Simply go the site and type in keywords for the type of product you plan to market.  Lets say it is a Frisbee® type flying disk with LED lights which glow in the dark.  Type in “Frisbee with lights” and you will immediately see competing products.  Google also features a “tab” at the top of its browser window which allows you to select “images.”  If you choose images and type in your key words, you will see photos of any similar products found.  Amazing stuff.  Make use of it!  If you do not have a computer, go to the library and use theirs.  The research librarians can teach you how to use the search engines in short order.

2. Visits to neighborhood stores that sell similar products.

3. A search of the Thomas Register in the library.

4. A search of Standard Rates and Data Trade Journal publication in the library.

5. A search of “14 million Business compiled from the yellow pages”.

6. A search of New Products guides published by Taiwan and Japan in the local library. (also on-line)

7. A search of all applicable mail order catalogs. (again, try using Google’s advanced search tab at www.google.com  and look under catalogs.  You simply will not believe how many are on-line.) You can also use the secure search engine  www.ixquick.com which does a https search instead of just an http search.

8. A patent search.

9. A Trademark search.

Some devious people have been known to pose as buyers, or other professionals, to obtain marketing information about their competitors.  I know of one particularly devious innovator who called a company and posed as a Doctor, treating a child who had swallowed their product, in order to coerce the company into divulging all of the contents in their product so he could see how close the ingredients of their product came to the ingredients of the one he was developing.  Product development can be a “dog-eat-dog-all-is-fair-in-love-and-war” type of business that occasionally drives people to cross all lines of restraint.

In summary, remember that some competition is healthy.  It lends credibility to the fact that you have a viable product, and sometimes, can act as a reason for you to raise your prices without resistance.