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Market Intelligence

Nick Hague discusses three steps to powerful market intelligence

Take a minute to think what it would be like if you had just a handful of customers and you intimately knew everything there was to know about them from their names and personal background through to their differing business needs. Just like a market trader who has a continuous finger on the pulse of customer preference, direct contact with customers allows a business owner to quickly evaluate what he is doing right or where he is going wrong. Such informal feedback is valuable in any company but hard to formalise and control in anything much larger than a corner shop.

However, it is also just as important to have information on your competitors and potential customers as it is to have information on your existing customers. Having intelligence on your enemy is a key to winning military battles and so it is in business.

Market intelligence can be used to assist with more or less every decision faced by a company (whether they are operating on a local, regional, national or international level). The overriding purpose of most market intelligence is to help the company grow – to increase revenue, profit, or market share. Good market intelligence can therefore have a huge return on investment; just £20,000 to £100,000 spent on intelligence can generate or save many times that amount in extra customer revenue or the avoidance of a bad investment decision.

The problem is that with the advent of the Internet and so much information at our fingertips, sometimes the difficulty is knowing where to start. The purposes of this article is to hopefully make your life easier in knowing how to go about gathering market intelligence and what types of market intelligence will deliver useful insight.

Step 1: Don’t reinvent the wheel

There is no point reinventing the wheel if the information we are after is already under our noses. However, the problem normally is that very often people either don’t know the information exists or they don’t know how to locate the information in the particular format they are looking for.

The best starting point for any project is to get key personnel from different backgrounds of the business to take part in a workshop-type format (from board level down, encompassing marketing, sales, operations, HR, technical, logistics – the whole business). This type of meeting can be very rewarding to assemble knowledge on customers, potential customers and competitors that otherwise would be held in individuals’ heads. Using this workshop format also helps clarify what external information has been collected previously and therefore obviates the need to spend money on collecting the information again (gone are the days of Market Research Managers within large corporates who used to know what primary research had been commissioned in the past). A huge amount of learning can be gathered using workshops, especially if guided by a skilled external moderator.

Following this workshop output there will no doubt still be gaps in intelligence but there is no need to spend vast amounts of money on primary research. The expert desk researcher can quickly and inexpensively dig out data from a wide variety of sources to answer many of the questions that have already been asked. With the recent explosion of social networking, this too has resulted in a lot of information that can be quickly gathered inexpensively. This is not to say that it will definitely be correct, but information that is in the public domain has at least been subjected to the test of public scrutiny and it can be then challenged internally to help judge its accuracy.

Step 2: Choose your battleground

Desk research can be very fruitful. However, it has its limits and it may only provide part of the information sought in a project. Where a mix of desk and primary research is used it therefore means that more expensive primary research techniques are used only where essential.

The next step is to clearly state what your key objective is for your business plan and the actions you will take as a result of gathering the market intelligence. In figure 1 below you can see the different types of information that can be gathered to deliver different types of market insight.

Figure 1: Examples Of Market Intelligence Studies

Type of information neededType of study that would meet that need
Help enter new market, or expand presence in a marketMarket entry and market expansion studies
Minimize the risk of an investment decision being wrongMarket assessment or acquisition studies
Keep ahead of the competition, obtain first-mover advantage over competitorsCompetitor intelligence study
Give the customers what they want, expand market shareNeeds assessment studies
Establish and maintain a distinctive corporate identityCorporate positioning studies
Tailor products and marketing effort around customer needsSegmentation studies

Information can be gathered from speaking with many different respondents including:

  • Interviews with customers – these are arguably the most important interviews of all as they are the lifeblood of your company. There is no more effective, reliable or valuable source of competitor intelligence than customers. Buyers have never been so willing to say exactly what they want, and how they want it, nor so willing to complain or take their business elsewhere if their requirements are not fulfilled. Customers often display a remarkable level of candour when talking about their suppliers, even those with whom they have a close and collaborative relationship. Issues as diverse as price, service, contractual details and technical information can be discussed, as well as information on the competition and future needs.
  • Interviews with potential customers – these interviews are often very important to see what market perceptions are like ‘on the other side of the fence’. Potential customer interviews can be used to ascertain brand perceptions in the marketplace, why they choose the supplier they do and what could make them switch to another supplier. These interviews are also useful to ascertain how much demand there is for a product/service so market sizing estimations can be made.
  • Competitor interviews – competitor interviews are a difficult, but valuable means of gaining competitor intelligence. Clearly senior management such as Marketing VPs are particularly useful sources of information, if they can be persuaded to talk. Gaining co-operation with such groups is one of the most difficult tasks carried out by research and intelligence agencies. If the agency can avoid revealing the sponsor of the survey (this is very rare), a financial incentive may gain co-operation. Far more commonly, the respondent is happy to take part in an ‘information exchange’. This usually results in the respondent receiving a synopsis of the overall market research findings in return for a face-to-face or telephone interview. It should be highlighted that a competitor interview does not necessarily need to target a high-level respondent in order to be useful. Mid-management employees such as sales managers can be an extremely useful source of information on products, innovations, overall strategies and a host of other topics. These employees are trained to talk and persuade and tend to be less circumspect than their colleagues in other departments.
  • Interviews with suppliers, distributors and industry experts – in every industry it is worth mapping out the supply chain in order to assess who might be able to provide valuable market intelligence. Those at the centre of the supply-chain – intermediaries such as distributors, agents and importers – are often those that know most about the market, as they are in frequent contact with manufacturers and sellers alike. Most markets have a number of ‘experts’ of some kind who are independent and willing to share the information they possess. Industry associations and journalists at industry publications are typical examples.

The means of gathering market information varies according to the objectives of the intelligence – are you looking for insight and understanding or are you looking for robust quantification of market size and segments, brand shares or purchase frequencies? Also, the type of methodology depends on who your target audience is. For example, it is easier to use e-surveys when speaking to customers due to the already existing relationship you have with your customers and therefore the response rates of completion are greater, but also the fact that you have at your disposal an accurate e-mail list. However, even from customers, the depth that is gathered through e-surveys is often not as detailed as an administered interview over the telephone or face-to-face. Focus groups (both online and face-to-face) are still used in abundance in business-to-business research to capture qualitative insight, but other methodologies are also utilized that call on different skills such as observational skills in ethnographic research.

Clearly, scoping out who you are looking to target very much dictates what methodology is chosen. However, there are few real methodological differences when it comes to obtaining market intelligence in different countries. When it comes to data collection, it is true that Asian markets, for both cultural and logistical reasons, often require more face-to-face data collection than Western markets. It is also true that market intelligence can be more difficult to obtain in developing countries. A key reason for this is that economic records tend to be less well-established. However, a market intelligence provider with well-educated employees and a multilingual capability should be capable of obtaining intelligence across different markets. Indeed, this skill is increasingly essential as the requirement for multi-country intelligence increases.

Step 3: Don’t stop digging

One of the most important things to remember is that the gathering of market intelligence is delivering insight into a market at that specific moment in time. Many of the issues that affect a customer’s buying decision today will most likely evolve in the future. Also, in this global marketplace in which we all play, change is constant and so not only will needs change but suppliers, prices and products will also change. Therefore, it is not only important that intelligence is acted upon when it is collected but that also a constant review (or feedback loop) is put in place so that a continuous review of market intelligence is at the centre of all business decisions made.

In conclusion

For many companies, the first place to look for more sales and therefore growth is among existing customers. Current customers have already made the ultimate gesture of approval and paid money to buy your products. A bit more persuasion and they may buy more. Also, existing customers know and trust the company sufficiently well to do business. So much so, they may give serious consideration to buying a new product or service from the company. However, every company has a product that can travel. New markets wherever they are – new countries or new segments – carry risk and the gathering of accurate market intelligence is a must in making all these decisions.

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