Companies scan their environment on a regular basis. Why? Is the information useful? Can’t the company just focus on the customers and innovating to make the product relevant? Let’s look at how to approach market intelligence; why it is necessary and how to go about it.
Marketing intelligence is more often than not, confused with business intelligence. Whereas market intelligence focuses on the external environment, business intelligence is more about the internal environment.
Market Intelligence: Is it really necessary?
Assume that you are running a company, ears closed to the external environment. The pricing is totally based on your mark up expectations, you are innovating at your own pace and your focus is 100% based on what you know. What are the chances that the company will be left behind? You guessed it right, a big chance.
Market intelligence basically shifts the lens on your external environment. Questions such as how your competitors advertise the products, their pricing, strategy, what their competitive advantage is, competitor’s company characteristics and organizational plans are answered when going about market research. This is extremely important because in one way or another, it will dictate the decisions that an organization will make. The information collected will aid the business by focusing on what works and what does not work. Good market intelligence saves the company huge amounts by steering the company to make good, relevant decisions.
Market intelligence is a broad topic encompassing a variety of factors. Profiling competitors is one of the components of market intelligence as a strategic tool for companies to sharpen their competitive advantage. Profiling competitors is quite specific in that companies need to look at how the competitors operate. How does one go about this?
a) What is the reason for this analysis?
The first step is to identify the reason for the assessment. Is it to gain knowledge so as to assist in market entry or market expansion? Once you have identified the course, have a list of the possible sources of your information. Clearly identifying your reason assists in narrowing down on the source of information. One can get information from industry experts and publications, potential customers, potential suppliers and competitors.
b) Create a personalized template for the profile
On gathering information from competitors, the list has to be as exhaustive as possible, from basic information such as name of the competitors and location to identifying their competitive advantage. A very clear template should be designed with the following information
i) Contact information: Their physical location, phone number, website and any other information that is required and can be found.
ii) Ownership details: Is the company a limited liability company? What are the major share holders or is it a partnership? Is it a private or a public company?
iii) Core values: Do they have a set standard of rules on which they operate on? What is their mission and vision? Do they have policies on certain aspects such as hiring policies related to gender? What is their mission and vision? Try to exhaust the values that the company operates on.
iv) Business nature: Are they our direct competitors? What exact products and/or services do they offer?
v) Competitive advantage: What is unique to this brand? Do they have any patents or trademarks?
vi) Market share: What are their consumers like? Are they loyal to the brand? Are they price sensitive?
vii) Human capital: What is their employee base like? How many are they? Do they outsource non-core business? What are the requirements for getting employed? What is their company culture like?
viii) Products and/ services: Here you can assess product development i.e. what is ‘cooking in their kitchen’? Get an in-depth analysis on what the company is up to. How does the supply chain look like?
ix) Financial status: Can you access information about their financial position? What is their turn over? Has the sales been increasing over the years? And by what percentage?
x) Market share: What is the percentage of their share? Who is in their target list? How does their sales team work?
xi) Customer service: How do they handle their customers? Get as much information as possible on how they treat customers? Do trial calls to monitor how they handle consumers over the phone. Find out what they do that your company doesn’t, for purposes of improving customer support.
xii) Hierarchy and structure: Have a detailed look on how the competitor’s organizational structure looks like. What is the chain of command like? Who makes the decisions in the company? Do they have a board, and if so, who does it consist of?
xiii) Competitor behavior: In addition, most importantly, a detailed description on how the competitors behave whenever there is a change in the market should be captured. Are they passive or active in reacting to the change? Is the company a market leader or follower?
c) Relevance of the information
The gathered information acts as a guide. Collecting the information that highlights the marketing strategy assists in knowing what your competitor is up to. In addition, you get to know what works, and what doesn’t work in order to avoid mistakes that were previously made. In business, since it is all about trial and error, analyzing your competitor’s behavior as regards to market changes will put you ahead of the pack in terms of choosing when and how to react to the market changes.
Information on the market share will guide you as to your position in comparison to others in the same business. Having a plan to capture a big part of the market consequently becomes easier. Information on structure and hierarchy, core values and business nature will ensure that you are on the loop in knowing the strategy, long-term and short-term. This is key for the success of the business.
Most of this information is easily found more so if a company is a public company. Being creative in gathering information can make the work easy. For instance, you can subscribe to their mailing list, give calls to the office masquerading to be a customer or make visits to their offices to inquire more about products or services. Gathering this information need not to be overrated. Even small businesses can afford to collect competitor’s information through the above mentioned ways.