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This is the age of competition. Marketers must carefully identify and analyze their competitors. Competition can be in terms of brand, product-class, generic and geographic. Competition is a threat to the firm.

A competitor is a firm in the market selling a product which is perceived as substitutable by buyers. Competitor analysis describes the competitors, evaluates the competitors, and anticipates the future actions of competitors.
Sources of competition can be:

1. Lack of entry barriers: There are no entry barriers. This allows many firms to enter the market and deal in products which are substitutable.

2. New technologies: Research and development makes new production processes and technologies possible. They lead to product innovations. New products compete with old products.

3. Information technology: This has facilitated direct marketing through e-commerce. Internet and websites have increased competition.

4. Customer needs and preferences: Changing customer needs and preferences facilitate competition.

5. Environment forces: Changing environmental forces encourage competition. They can be political, legal, economic, and socio-cultural forces.
Competitor analysis helps marketing:
• Avoid surprises. It helps to identify opportunities of competitive advantage and avoid threats. Surprises are avoided. Better planning can be done.
• Gain competitive advantage. Competitive advantage can be gained over rivals by gaining knowledge of their strengths and weaknesses. Superior value can be provided to customers.