It captures demand by addressing the customer’s underlying goal through a different solution. A business therefore competes not only for product preference, but also for the customer’s time, spending, or chosen way to solve a need. This perspective helps marketers recognize threats that a product-to-product comparison could overlook.
Customer goals, alternative solutions, and buying criteria provide the main signals. Marketers can examine what customers are trying to accomplish, which options they consider, and the standards they apply when choosing among them. These factors show why a cinema and a streaming platform may compete for entertainment time despite having different delivery models.
Changes in consumer behavior or technology can make substitute solutions more attractive, redirecting demand between different businesses. Monitoring these shifts helps marketers anticipate substitution before it becomes a direct product comparison. This forward-looking view is important because competitive pressure can emerge from changing preferences rather than from a new business offering an identical product.
Begin with the customer need rather than the company’s product category. Map the goals customers pursue, list the alternative solutions they could choose, and compare the buying criteria influencing those choices. Reviewing consumer behavior and technology shifts then helps reveal substitutes that may currently attract demand or could become meaningful threats.
The analysis clarifies which customer need the company must defend and which alternatives shape the customer’s decision. Marketers can use that insight to refine positioning around relevant value instead of relying only on product similarity. It also exposes unmet needs, creating opportunities to distinguish the offering more effectively.
Indirect competitor analysis helps marketers assess broader market threats, anticipate substitution, and develop strategies that protect demand. It can also identify unmet needs and reveal how changing preferences or technologies may alter customer choices. These outcomes support more responsive planning because the company evaluates the full set of alternatives customers may consider.