What is market intelligence?
Market intelligence refers to data that a business gathers about a market, including information about its competitors, customers and suppliers. Companies say that by analyzing market intelligence they are better able to make more effective business decisions.
Successful market intelligence helps companies determine internal goals, where to devote more resources, which markets should be attacked next, and what products could be cross-marketed to existing customers.
According to specialists, market intelligence covers four major activities:
– Competitor intelligence – learning about competitors’ weaknesses and strengths in a legal and ethical manner (doing this illegally is called industrial espionage).
Corporations today spend a lot of money gathering and analyzing market intelligence data.
– Product intelligence – gathering and analyzing data regarding the performance of a product being designed and manufactured.
– Market analysis – determining factors, conditions and features of a market. Studying the attractiveness and dynamics of a specific market.
– Market research – the process of determining how viable a product or service is in a market, through techniques such as product testing, surveys and focus groups. Gathering information about consumers’ needs and preferences.
Each of these four areas is a discipline in and of itself. Their data and analyses become extremely useful and powerful when all four are integrated.
According to ft.com/lexicon, market intelligence is:
“Information that a company gathers about a market, such as information about its customers and competitors.”
An example of how market intelligence can be useful
For example, through product intelligence you may learn that a rival is pricing a product well below its normal pricing range, and that it also plans to replace it with a completely new product soon.
Your competitor intelligence people report that the rival’s board of directors has challenged the Chief Executive Officer with growing market share and has a strategic objective of breaking into a new market segment.
By integrating data from the four areas, you conclude that the rival’s plan is to gain a larger customer base before launching the new product, hence the price reduction. Put simply, it plans to gain market share before launching its new product. Market share refers to total sales in relation to the whole market.
You and your team will have a better idea, through market analysis and market research, whether the rival’s strategy is likely to succeed or will simply become a drain on resources.
Gathering all the data is one thing, turning it into meaningful information that you can easily understand and act upon is quite another, and requires a certain level of expertise.
According to Pragmatic Marketing, a company specialized in helping businesses create more effective marketing strategies:
“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.”
Video – What exactly is market intelligence?
Ivo Maasen, head of market intelligence at Sappi Europe, one of the world’s largest paper producers, explains the difference between market intelligence, strategic intelligence and business intelligence.