Product Analysis | 3 mins read

How to Perform a Product Analysis 5 Steps

how to perform a product analysis 5 steps
Chloe Henderson

By Chloe Henderson

Developing and selling a product requires extensive research. Although expenses, supply chain capabilities, and other internal factors are crucial, businesses also need to consider their competitors.

A thorough product analysis examines the functionality, customer perception, and cost of competitors' products, enabling organizations to improve their own product development.

What is Product Analysis?

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Product analysis seeks to define every part of a product so businesses can better understand how to manage its profitability and customer appeal. The analysis covers, but is not limited to

  • Components
  • Functions
  • Technology
  • Designs
  • Costs
  • Availability
  • Customer demand
  • Materials
  • Marketing approach
  • Market competition
  • Similar products
  • Average sales
  • Profit margin
  • Quality
  • Customer reviews

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While product analysis is lengthy, it provides all of the information necessary to determine if inventory meets the company's standards and customer preferences. If the evaluation yields insufficient results, businesses can decide if they want to eliminate the item from their roster or try alternate designs.

This process is also great to determine if the output from each product is worth the initial investment, also known as return on investment (ROI).

Product analysis can be conducted to gain insight into manufacturing, logistics, sales, and product development. By defining all of the fine details of an item, companies understand what type of patent they need and their target market.

5 Steps for Product Analysis

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While the product analysis process is extensive, the actual stages are comprehensive and can be tailored to any type of organization.

1. Learn the Competition

Firstly, businesses need to understand their competition before they can begin researching. Competitors can be in and outside of the target market, otherwise known as direct and indirect competition.

Organizations should consider anyone that offers similar products and services, are in the same region, and appeal to the same customers.

2. Conduct Research

Once competitors are defined, management can perform a competitive product analysis by studying the companies' market history. By detailing the businesses' models, owners can differentiate their own approach to optimize customer reach and fulfillment.

Management can start by defining competitors'

  • Pricing strategies
  • Customer demographics
  • Negatives
  • Marketing techniques
  • Expansion over the years

3. Analyze Product Information

To get a better look a competitors' products, project managers should consider reading their marketing handouts, brochures, emails, product websites, and public annual reports. These resources help owners gauge other businesses' pricing, marketing, sales strategies.

Through further evaluation, companies can define competitors' goals, performance against other organizations, and foothold in the market. Surrounding businesses may be trying to increase their shares, long-term profits, and market growth.

4. Create a Competitive Strategy

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By understanding competitors' goals and strategies, organizations can determine what sets them apart and how they can create an advantage. Based on the competitor analysis, owners may realize they need to adjust their

  • Pricing strategies
  • Quality
  • Marketing approaches
  • Customer support
  • Sales Channels
  • Product descriptions

This data provides insight into the company's performance and how they can meet objectives, such as sales and financial targets.

For example, if competitors neglect online sales marketing, the company can use this weakness to its advantage by establishing a foothold in the e-commerce market.

5. Continuous Research

Some businesses may find that a single competitive product analysis doesn't provide enough insight. In this case, managers should update their evaluations on a regular basis to monitor market changes.
This also gives organizations to adapt their business strategies according to emerging trends and competition.

Tips for Product Analysis

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From market to competition patterns, there are many elements involved in product analysis.

Begin with a Flagship Product

A flagship product is the first item or core solution a business launched. Managers should start their analysis with flagship products and slowly branch out, as these goods typically generate the most sales and revenue.

Benchmark Products

While competitors'' product performance is pertinent in the analysis process, companies must also set targets for themselves. By creating benchmarks, businesses can see where they stand within the market and against the competition. It also makes it easy to define strengths and weaknesses.

Analyze Product Pages

Product pages contain valuable details on an item's functionality, demand, customer reviews, and frequently asked questions. These insights make for a more detailed analysis by allowing managers to get to know products.

Consider Product Videos

Many retailers post product videos that display how their items are used, allowing customers to virtually interact with merchandise before making a purchase. However, businesses can also use these demonstrations to gauge the user experience and pinpoint potential issues.

Reference Customer Feedback

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To get a true sense of product quality, companies need to reference customer feedback as they provide honest, unbiased perspectives. Some businesses prefer to personally contact customers and craft a survey, while others sift through review sites.

Evaluate Marketing Strategies

How a product is displayed and explained gives insight into a business's marketing strategy and customer reach. Therefore, companies should focus on how their competitors portray items, list benefits, and run advertisements.

Monitor Product Changes

By conducting routine product analyses, organizations can detect when competitors change the features, functionality, and designs of their products. This is a big tell to their strategies and emerging demand trends that may impact the entire market.