Gathering market intelligence is the process of collecting, analysing and reporting market information to assist in making decisions about market opportunities, marketing strategies, and market development.
Market intelligence brings together four main sets of information:
- market analysis – market information and data
- product attributes – market attributes and points of differentiation
- competitor intelligence – competitor products and competitive position
- market research – consumer and customer research
How can market intelligence benefit my business?
To ensure you are developing products that the market actually wants and will buy, you need to be well informed about that market. This means you need to fully understand it, including:
- market and consumer orientation
- identifying new opportunities and trends before your markets and competitors
- gain an early warning of competitor moves to enable you to take counter measures
- minimising investment risks by detecting threats and trends early on
- better customer interaction, helping you gain an intensified customer market view
- improved market selection and positioning by understanding in detail where your offer fits and discovering untapped or under-served potential
- establishing quicker, more efficient and cost-effective information gathering processes
Watching the competition
Successful businesses spend time understanding their competition. Keeping an eye on your competitors and trying to keep ahead of them by using market intelligence may help you stay ahead of the pack.
You can understand your competitors by:
- identifying who your key competitors are
- working out what they are doing in the market place
- assessing their strengths and weaknesses
- selecting which competitors to go head to head with and which ones to avoid
When identifying who your potential competitors are, don’t just think about the other companies making exactly the same product as you. Your biggest competitor is not necessarily one with the same category of product; instead it may by the one that is trying to satisfy the same consumer need with something a bit different.
For example, Farmers Union Iced Coffee might once have considered its competition to come from other iced coffee makers; or, more broadly, other mass market beverage manufacturers such as Coca Cola. But that was before fruit and milk-based smoothies entered the market, responding to a consumer trend towards the notion of healthier beverages. This was a new solution to the same consumer need and achieved significant market penetration very quickly. So when you search out your competitors, don’t just look for those making the same product, look at the other options your target consumers have to meet the same need that your product is designed to meet.
Once you have an understanding of your competitors, their offers, and where your business sits relative to them, it is time to develop competitive strategies. These are the strategies you will implement to enable you to compete with others successfully while meeting the needs of your market.
Your market is not just a big group of people just waiting for your product. And your product cannot ever be all things to all people. It is important to work out who in the crowd really wants your product and, of those, who is prepared to pay for it. This is called market segmentation (identification) and is a key element in developing a successful business strategy.
Market segmentation helps you:
- identify in detail which portion of the market you want to reach with your marketing messages and who is most likely to respond to that message and marketing activities such as promotions
- be confident that you really do know your consumers instead of just assuming you do – this means any product development and promotions that you undertake will be aimed directly at the right people – the consumers who are most likely to respond
- by knowing your market and consumers in detail you can be sure you get the best return on value of any investment made in product development and promotions and you can potentially reduce marketing costs because your marketing strategies will be more effective and efficient as a result of being able to tailor your activities and messages according to what you know your audience is most likely to respond to
The steps to market segmentation are:
- identify and specify the market
- estimate the market’s potential size more accurately and evaluate its feasibility (don’t forget to draw on your market research and market intelligence to help you do this)
- identify the specific needs of the market
- tailor the marketing mix exactly to fit the needs of the market
It is important to note that your market segmentation will change over time, as will your competitors, so it is worth redoing this process at least every two to three years. And always keep an eye on the trade magazines and newspapers because that’s often where you see articles highlighting changes and trends such as new ingredients, new claims about foods and how your competitors are performing.