Market Intelligence: Definition, Methods, Types and Examples

Market Intelligence: Definition

Market intelligence is defined as the information or data that is derived by an organization from the market it operates in or wants to operate in, to help determine market segmentation, market penetration, market opportunity, and existing market metrics. Market intelligence is a vital aspect to understand the state of the market, as well as helps collect competitor intelligence which in turn aids towards becoming profitable.

For example, A company wants to understand who is the right target audience for a mobile phone they are launching soon. A profile survey can help the company to shortlist its target audience based on the type of mobile device they are launching. For instance, if the colors of the phone are bold and its features are set in a manner to market it as a gaming mobile device, a survey will shortlist participants who prefer gaming, are in a younger age group and people who fall in a specific income range. Such information helps the company to focus its efforts on the right people thus saving costs and efforts.

Market intelligence, however, is not the same as business intelligence. Whilst business intelligence focuses on mostly internal factors such as billing rates, headcount, processes etc., market intelligence gathers data externally providing you a holistic view of the entire market and not just your organization. However, incorporating market intelligence with business intelligence processes will enable a company to have a holistic view of the ongoing corporate performance in specific market conditions.

Market intelligence is closely associated with market research and can be explained in three simple parts as follows:

Competitor Intelligence – Competitor intelligence can be explained as the collection of data about your competitor using ethical methods such as government databases and public records. For example, Japanese automotive companies were able to capture the US markets and even dominate them using competitor intelligence. Understanding the need for high quality, fuel-efficient cars led them to strategize and penetrate the US market successfully.

Product Intelligence – Product intelligence is gathering data related to competitor products or similar products in the market. For example, A telecommunications company needs to monitor the prices of competitive mobile phones in the same segment. A price drop in the competitor product can mean the company is introducing a new model in the market. Understanding such information can enable a company to strategically launch their models at the right time and price.

Market understanding – Market understanding is knowing the market share of your company, trends in the market, the size of the market and which is your target market. Understanding the demand in the market, and customer wants can help a company tremendously to increase their revenues and market share. For example, A comprehensive market research can give valuable insights to a brand, for instance, the target market is age 20-40, upper-middle-class family and the trend in the market is for Crossfit training to get fit and healthy. A particular gym can use this information and provide services specific to this requirement enabling them to penetrate the market much faster than the usual gyms.

Market Intelligence: Types and Methodologies with Examples

While market research is a vast topic and can be gathered through various quantitative or qualitative methods, most companies prefer the following basic methodologies to collect market intelligence.

Data collection

Some basic data collection methodologies for Market intelligence are as follows:

• Surveys

Survey research involves a set of questions put together in a concise manner to gather data from the target market and analyze the same to create valuable market intelligence. The larger the group of people, the more reliable are the results. There are various methods in which surveys can be conducted depending on what information needs to be collected.

Online Surveys – These are the best and one of the most economical methods to get data in a swift manner. Such surveys have been associated with unreliable data, but with newer tools coming into the market, this method has become very popular and reliable, to get real-time data fast. Furthermore, the majority of the target audience already prefers online communication, hence online surveys are the best method to gather market intelligence. For example, A mobile company wants to understand the competitor’s position in the market to launch its own product in the same segment. A competitor in-depth analysis survey can be conducted to understand the competitor’s position in the market, their product features, and their market share. Such information will enable the company to decide the right audience, the features, and the correct pricing to capture higher market share.

In-Person Surveys – These surveys are one to one interviews which can be conducted in high traffic locations such as malls to gather required information. This also allows you to gather customer feedback as you have the advantage of showcasing a product or comparing products and gather valuable information. Such a method has high response rates, however, it is quite expensive as a skilled person is needed at every location with an appropriate device such as a tablet which tends to be costly. For example, A FMCG company wants to launch a new product in the market for women. In-person surveys can be conducted in malls to understand the trend for particular cosmetic products and preference of its target audience. Accordingly, the product can be modified and launched in the market to have a direct impact on the demand of the audience.

Telephone Surveys – These surveys are comparatively less expensive as compared to in-person surveys but are costlier than mail surveys. Although, a number of companies use telemarketing and hence the consumer does not respond well due to constant badgering. Therefore, it gets very difficult to convince the consumer to take the survey, thus reducing response rates, as well as the quality of responses. For example, businesses need to understand public opinion about specific products, for instance – laptops. A telephone survey can be conducted with a set of questions that include product features, brand preference, price comfort, and many more, which can help the company to launch the right kind of product in the market.

Mail Surveys – These are one of the cheapest ways to conduct surveys, especially to a larger audience. Since the advancement in technology, people have stopped reading paper mails nowadays and hence the response rates for such a method is only 3-15%. However, in areas where technology is still inaccessible, such method is still dominant to gather required information from the audience.

• Questionnaires – A questionnaire is a series of questions asked in a printed or online format to conduct research. They can be used for qualitative as well as quantitative research and can be used to gather data from a large set of audience.

• Polls – Polls are somewhat like surveys, however, in such a method there is only one question to answer. Since it takes very less time to answer these, the response rate is extremely high.

• Forms – Forms are a set of questions asked by a researcher to collect very specific information required for the task at hand. Such a method does not include questions that will state opinions or feedbacks from the respondent.

• Focus groups – Focus groups are a set of people selected carefully to represent a target market. Using focus group surveys, a company can evaluate customer demands and opinions or even take feedback from the group. This enables to collect information that can be helpful to a company to penetrate that market or to launch a new product in an existing market. Usually, a moderator is required to ask the question to a set of people where a discussion unveils insights into that topic. However, focus group surveys can now be done online as well thus eliminating the need for a moderator. For example, A focus group is asked about their opinions to understand what would be the most ideal phone for them. A discussion amongst them will give the company information as to what dimension is most preferred in the market and what are the reasons. Reasons such as particular features of the product, screen size, the color of the phone, the speed of the operating system, pricing, etc. can give the company insights in which particular area they need to invest more and accordingly use this intelligence to capture higher market share.

• Personal Interviews – Interviews are generally an expensive affair but provide valuable, reliable information. Such a method is used to understand in-depth about a particular topic or a product. They are unstructured open-ended questionnaires and can last to an hour. However, since they are done on an individual basis, such a method is not preferred to gather market information, as it will not represent the market as a whole. Although, interviews with subject matter experts can give you an understanding of the market trends in a particular industry if you are not well acquainted with such industry information. For example, A company wants to understand what are the current technological trends in the market. An interview with a subject matter expert in technological solutions can give a company valuable information as to what is trending and what can be expected in the near future. Accordingly, strategic business decisions can be taken to invest in the right direction.

• Observation – Sometimes the data gathered through other types will not give you reliable data or won’t give you insights about the customer attitudes or buying behavior. In such a case the observation method provides you with information such as habits of the customer, buying patterns, customer preferences such as quality or price, etc. Understanding this information will enable a company to sell better and make changes in their products according to the demand. For example, Brands have cameras fitted in their stores, which are continuously recording and viewed later to understand the behavior of their consumers. Using this observation, a company can hack into unconscious buying behaviors or attitudes of the target market.
• Field trials – Field trials are like conducting experiments in real time. It involves placing a product in specific stores to understand customer response to the new product. It can be called a pilot run to test the product in the market. For example, A chocolate company wants to test a new product they want to launch. Hence a few select stores are provided with these chocolates to be tested with their target customers. These customers have to represent the target market and hence their feedback will enable the company to understand if the product will work in the market or not.

Analysis

Information is different from intelligence. Information is not useful until it has some meaning to it. Information is nothing but knowledge about a particular topic or product, while intelligence is about meaningful information which can be used to take action. In order to transform collected data to meaningful intelligence, unit of analysis has to be performed on the collected data. There are various market intelligence software in the market. Such software not only allows you to collect data but also analyze the data using advanced analytical methods. Analyzing the information collected helps you transform it to valuable market intelligence thus enabling a company to understand target market opinions, trends, competition and where improvements or modifications are needed. Advanced analytical techniques such as Conjoint analysis, Maxdiff analysis, Gap analysis, Trend analysis, Text and Sentiment analysis allow a company to understand the market accurately which aid them to make strategic business decisions.

For example, it is important for a company to monitor the market on an ongoing basis. By analyzing and monitoring the trends, measuring customer satisfaction scores and Net promoter scores, a company can stay competitive and manage to increase the market shares, its revenues and also retain its customers. If needed, accordingly decisions can be taken to change or modify the product on the basis of the current trends or the situation.

Reports and Presentation

Reports and presentation are an important step in using market intelligence. Reports and visual infographics will enable a company to understand the markets in an easier manner and can answer questions like what do the metrics mean? Wrong interpretation of such data can be hazardous for the company, hence this step plays a vital role in the market intelligence process. The entire market intelligence process has now become much easier using reliable and powerful market intelligence software. Thus using market intelligence effectively can enable a company to penetrate a market successfully and effectively, determine market segmentation, understand the competition and understand the market as a whole.

Advantages of Market Intelligence

Market intelligence not only helps companies to distinguish their brand from its competitors but also helps in providing valuable information to stay in the game and excel at it. Following are some of the benefits that market intelligence provides.

• Holistic view of the market – Understanding the market completely can lead a company to success in no time. Market intelligence is gathering data in real time from the market and further understanding the customers, trends, behaviors, etc, thus enabling a company to stay competitive and meet market demands.
• Customer retention – No matter how old a customer is to a company, they are always being monitored and attacked by the competition. Understanding when the customer is dissatisfied and the reasons behind it can prevent loss of customers. Market intelligence can help you analyze and give you insights into the areas of improvements that are needed by the customers and thus help you retain them and understand customer lifetime value.
• Improve sales process – Businesses having a variety of products and a large number of customers often face an issue, i.e. which product to target to which groups? Market intelligence helps you to determine market segmentation, thus allowing the company to understand which product will succeed with which group of people.
• Boost process efficiency – Market intelligence helps businesses to boost overall efficiency and productivity by identifying gaps, giving actionable insights to devise crucial strategies and provides an organization with real time data and analytics.
• Gives a competitive advantage – First mover advantage or the launch of a product at the perfect time is a well heard off statement in a lot of business conversation. These are possible only by using market intelligence. Market intelligence helps you keep a watch on the competition, the upcoming trends, and gives a complete picture of the market, which allows a company to penetrate the market or capture the market share by launching a product or a new feature at the right time thus giving them a competitive advantage.

Importance of Market Intelligence

Market intelligence is vital to the success of any organization, being the foundation on which all marketing is based. Effective use of market intelligence involves the collection of data, analysis and end use of the information. Market intelligence helps you to become customer-centric, understand the market demands and consumer opinions, collect real-time relevant data, boost your upselling opportunities, reduce risks, capture higher market shares and gives you a competitive advantage. These benefits are crucial to the success of any business and hence market intelligence is one of the most crucial elements in executing effective plans for the prosperity of any business.

Following are a few points, to understand why market intelligence is crucial to any business.

To understand your position in the market – Collecting market intelligence through surveys allows you to understand the market in-depth. It will give you insights into what the competitors are doing, what is the market demand and who will be your target audience and many more. Analyzing this information will enable a company to evaluate its position in the market and make strategies accordingly.

To evaluate your product – Conducting marketing intelligence surveys will give you actionable insights on the product trends in the market, the demand for specific features and product specification currently in demand. Such information helps you to evaluate your product and make wise business decisions accordingly.

To know your target audience – Gathering market intelligence will allow a company to understand the needs of the audience and using surveys, businesses can shortlist their target audience for specific products/services.

To conduct competitor analysis – Market intelligence is a vast field. Conducting surveys to gather intelligence about your competitors is vital in today’s business environment. Using such information, businesses can modify their products as per the need, understand competitors failures or successes, and devise strategies based on the competitor’s position.

https://www.questionpro.com/blog/market-intelligence

A Market Intelligence Primer

Ed Crowley

So What Is Market Intelligence?

In its broadest sense, Market Intelligence is the capturing of information relevant to a company’s markets. In a more practical context, it is the gathering, analysis, and dissemination of information that is relevant to the market segments your company participates, or wishes to participate in. As the diagram at below shows, this really encompasses four major activities; competitor intelligence, product intelligence, market analysis, and market research. Market Intelligence is not just data. It’s the combination of data and analysis that generates information which is relevant to making decisions.

The four cornerstones of Market Intelligence are Competitor Intelligence, Product Intelligence, Market Understanding, and Customer Understanding. Each of these areas can be a discipline in and of itself. However, their true power comes from the integration of all four of these disciplines. For example, you may know that a competitor is pricing a product below their normal pricing range (Product Intelligence). However, when you also know that this company is planning on replacing this product with an entirely new line of products (again Product Intelligence), the reason for their pricing action becomes clear. When this information is combined with the knowledge that the companies board of directors has challenged the CEO with growing market share (competitor intelligence) and that they have a strategic goal of entering into a new market segment (again competitor intelligence), this information becomes much more valuable.

Knowing that a competitor has reduced pricing in order to prepare for the entry of a new product line in order to gain share in a new market segment is valuable. But how valuable is this market segment, and what will it take to be successful in the market segment? This is where Market Analysis and Market Research comes in. By analyzing secondary data regarding the market, market share trends, and other market data one can understand whether this is a segment that will ‘fuel the competitors’ growth, or whether it will be a drain on their resources (Market Analysis). Market research provides tailored insight into the key customer requirements, loyalty of customers to existing vendors, and other factors, which will impact a firms potential for success in a new (or existing) market segment.

So What Does It Take to Deliver World-Class Market Intelligence?

There are four key ingredients for a world-class market intelligence organization.

1. Data sources and field resources
2. Analytical skills and processes to pull the data together
3. Technology foundation and platforms to deliver, store, process, and distribute the information
4. The support of, and access to top management

Data gathering and field resources are the foundation for any Market Intelligence organization. This is the set of individuals, processes, and information services (often third party companies such as IDC) that provide the basic data on product shipments, competitor profiling, and other data relevant to the market. A world-class MI organization finds ways to turn the entire organization into one large intelligence-gathering unit. By the use of incentives, education, and existing information infrastructure (such as email) the entire organization including sales, purchasing, finance, and development can become a source for gathering competitive and market information. For example, one Fortune 500 Company offers its sales people a monetary incentive to turn in competitive tips. As a result, the sales people are always on the lookout for new products in customer sites and resellers locations. In some cases, these sales people have even encountered pre-introduction beta or evaluation products in customer’s sights. These ?first looks? at competitive products can be invaluable in planning pre-emptive actions to attack new products from your competitors.

However, gathering the data is not enough. Without rigorous analysis and insightful reporting, the data remains simply.. data, it never becomes useful information. In order for Market Intelligence to be useful, different types of data (market share, competitor product cost data, etc..) must be merged together into information which is relevant to key decision makers and the decisions they are making. The ultimate test of the data and the analysis is whether it provides the right information in order to let the decision makers make decisions with confidence.

For example, reporting to the executive team that the company is gaining market share in a specific market is important. However, that data is only marginally beneficial. It’s true power is unlocked when it is combined with information about competitor’s actions, sales and channel activities that have resulted in competitive advantages, and a succinct and accurate definition of all the other factors that are driving the market share gains. And it will only be impactful if it is presented in a concise and well articulated report or presentation.

Another key aspect is having the right information infrastructure to support the flow of information in and out of the analytical team and to ensure that the ?data? is processed with as little manual intervention as possible. For example, often times the data on market share provided by large market data providers such as IDC or DataQuest is not in the right format, or is not defined in such a way as to be useful to the ultimate marketing decision maker. It may be composed of product segmentation based on processor speed (in the case of PC’s), when the decision-maker uses segments based on customer types. In this situation, an investment in developing a database to convert the data providers segments into the segments used by the decision-maker is critical. Without this investment in automation, a very experienced Market Analysts must spend considerable time making manual conversions using spreadsheets, pivot tables, and power point slides! This is a very inefficient use of valuable market intelligence resources.

Finally, it is very critical that the Market Intelligence group has access to top decision-makers. This can be a challenge for many reasons. Often this is due to the decision-makers believing that Market Intelligence has little value relative to their own gut instinct. Sometimes the Market Intelligence organization has historically provided low impact market intelligence and thus has little perceived value with the decision-makers. And in the worse case, it can be the result of missed expectations in the past resulting in low credibility for the Market Intelligence organization.

No matter what the current state of the Market Intelligence teams access to decision-makers is, it is possible to improve the situation. And the more this situation improves, the better the Market Intelligence team will understand the key decision-makers needs. This in turn, will result in better analysis and information being provided to the decision-makers, which in turn will result in greater access to these same decision makers.

Creating Boundaries for Market Intelligence

It is also very important to understand what Market Intelligence is not. Market Intelligence is not a crystal ball into the future! While predictability is improved with good Market Intelligence, there are far too many variables in the market place to ever provide 100% accuracy into the future actions of competitors or customers / markets. It is also important to understand that the Market Intelligence agency is not the decision making team. In fact, while the Market Intelligence team needs to have an intimate understanding of the issue at hand, and to know the information needs of the decision-maker, and even provide recommendations and potential outcomes based on those recommendations, they should not be the decision maker. Why? Because, once they become the decision-maker, they have a vested interested in the outcome and loose objectivity. One of the key functions of a good Market Intelligence organization is the ability to monitor the firm’s progress versus the market after decisions are made in order to determine if mid-course corrections are needed.

A True-Life Example

In a recent assignment for a Fortune 500 technology company I was challenged with turning a division level marketing research organization into a world-class market intelligence group. While the marketing research team had a significant amount of talent, it was not seen as key to the divisions business making process. By leveraging the existing talent within the team, investing in database development and automation, focusing on key executive information needs, and reaching across organizational boundaries to integrate all types of market intelligence sources, this division level research team became the premier Market Intelligence organization for the corporation.

A few of the key actions that enabled this change are as follows:

• Ensuring that everyone on the team is sharing a common vision for what the Market Intelligence group should be, what it should deliver, and what are the key focus areas for improvement. It is important that the entire team is involved in this process, and that they feel ownership for the final results. Our efforts in this area resulted in a very actionable mission statement, annual group objectives, and the definition of career development paths. As a result, the entire team was bought into the process and focused on achieving world-class status.
• We invested significant time and financial resources in building databases and tools to automate the analysis process. In fact, at one point, one analyst spent about six months of full time effort managing the development of these tools. This was a difficult investment to make since the team was already understaffed. However, as a result of enabling these tools, we were able to go from having 3 staff members spending 80% of their time in generating one global market share report on a quarterly basis, to having 1 staff member and two interns spending 50% of their time in generating 42 highly segmented (and impactful) market share reports over the course of a year. As a result of this significant productivity improvement, the team is able to spend significantly more time in developing customized analysis, which is highly tuned to the executives needs.
• Our team began hosting worldwide / cross-divisional summits for the marketing research and competitive analysis units within the corporation. These summits resulted in significant collaboration across teams and a better flow of information and analysis. This improved the information flows and the entire organization’s analysis.
• During the early stages of this assignment, and on a regular basis thereafter the team would meet with executives and internal clients to understand what information they needed, what they were not getting, and what was working well. As a result of these meetings, and following through with information tuned to the clients and executives needs, the team became the source for market information. From the board level, to other marketing intelligence teams, to the clients, this team became the source for critical market information. In fact, this information gathering and analysis process became a critical and required component of the decision-making process.

Over the course of three years this team transitioned from a very effective marketing research team to a world-class market intelligence organization, which is a model and resource for the entire organization. In fact, the team became so effective that they began driving corporate level issues such as developing a corporate wide market-forecasting model, which is a foundation for the executive strategic planning process.

In summary, there are many critical elements to building a world-class Market Intelligence team. And it is not a quick process. However, with time, investment, and patience, the development of a world-class Market Intelligence team is possible. And this team can become a strategic asset to the company.

https://www.pragmaticinstitute.com/resources/articles/product/a-market-intelligence-primer

An Introduction To Market Intelligence

Using market intelligence

Information is everywhere. A quick internet search can uncover a whole array of information on any number of topics, with information on customers, suppliers, competitors, distributors and the latest market trends all waiting to be found.

However, the amount of information available does not guarantee its quality. In fact, it’s the valuable information that is often the most difficult to find. Take competitor intelligence for example, a subject on which information can be hugely valuable to businesses but incredibly difficult to find.

It is in these situations, therefore, that market intelligence specialists really prove their value. The specific, validated and well-presented information that market intelligence specialists offer can provide real insights that decision-makers rely on, as opposed to the generic information that is readily available on the internet.

How can market intelligence be used?

Market intelligence is used to assist with business decision making, and the insights provided can be crucial in helping a business to grow and improve. There are numerous ways market intelligence can be used to add value to a business, and these will be discussed below.

Market entry and expansion studies

Market intelligence can be gathered to help with entering a new market or expanding presence in an existing market. Intelligence obtained for this purpose usually takes the form of a market entry or market expansion study. Typically, market intelligence specialists will consult a number of different sources in order to obtain a 360-degree view of the market in question, in order to inform strategic decision making.

• Potential buyers – How much demand is there for the product/service?
• Intermediaries – How can we get the product to market?
• Competitors – Have other competitors successfully entered the market? What are the barriers to entry?
• Industry experts – What is the current state of the market and who are the current market players?

Acquisition studies

Market intelligence research can also be conducted to help minimize the risk that the wrong investment decision is made. This type of study is often utilized prior to an acquisition or merger. Acquisition studies form part of the due diligence of an acquisition target, and various sources of information are tapped into, to assess the potential of the company in question.

• Interviews with the acquisition target – What are the strategies and intentions of the target company, its performance and other notable characteristics?
• Interviews with the acquisition target’s competitors – What are the strengths and weaknesses of competitors? What are their strategies, intentions, their performance records and their notable characteristics?
• Interviews with the acquisition target’s customers – What are the reputation, performance and brand values of the acquisition target? Is there any ‘industry gossip’ i.e. financial status of the target?
• Annual reports and industry reports – Financial figures and company news.
• Suppliers and distributors – Is there any ‘insider’ information on performance, etc.?

Competitor intelligence studies

Market intelligence used to keep ahead of the competition and obtain first-mover advantage over competitors is known as a competitor intelligence study. Competitor intelligence studies are becoming increasingly more popular as companies seek to gain valuable insights into the competition, and to better understand the competitive landscape. Studies of this nature typically comprise obtaining information from a number of different sources, each providing specific insights into the competitor and their operations.

• Press analysis – Headline news containing information on financial figures, changing personnel and important news/events.
• Pricing research – Online and offline sources such as websites and price lists can be used to benchmark a competitor’s pricing strategy against that of the company that commissioned the research.
• Competitor interviews – While difficult to obtain, interviews with employees of competitors can provide valuable insights. A typical way to conduct competitor interviews is through a ‘mystery shop’, where specific questions can be asked about a competitor and its products/services.
• Customer interviews – Gathering information from customers is generally the most effective, reliable and valuable source of competitor information and insights. Topics such as price, service, technical information and ‘industry gossip’ can be discussed and used to gather information.
• Company websites – Perhaps the simplest and easiest of methods, information such as company vision and strategy, product innovation, staff and financial performance can be accessed through a company’s website.

Measuring the ROI of market intelligence

Market intelligence is gathered primarily for the purpose of expanding and improving a business. Therefore, the aim of any intelligence is to help increase profitability. However, how does a company measure the real return on investment of market intelligence research? Measuring ROI is extremely difficult, especially if the aim is to provide a single, definitive figure. However, it is possible to compare the relative returns of different types of research. In general, the higher the cost of a study, the higher the typical increase in revenues. Market entry, market expansion and market assessment studies yield the most substantial returns due to the higher associated costs of the study. For example, the estimated ROI of a study costing $200,000, should lead to a typical increase in revenues of around 50% over three years. For projects costing less than this, the returns are often scaled down accordingly. At the lower end of the scale, a needs assessment study costing around $50,000 should lead to a typical increase of around 10%.

https://www.b2binternationalusa.com/