Imagine you’re trying to make a decision about how best to hit your growth targets for the year. Your options are to launch a new product; release an extension of an existing product; or take your exist product and launch it into a new market.
They all have different levels of risk and reward.
How do you decide the best route to take for your business?
This is where market intelligence can play a crucial, strategic role in the performance of companies, by helping you make the best decision.
What is market intelligence?
Market Intelligence is information and data about a company’s target market(s). Its chief purpose is to facilitate better decision making in the following areas, split into three stages:
- Market opportunity
- Market entry strategy
- Market development
Read on to explore the practical applications of market intelligence, and how it can help transform your decision making.
Why is market intelligence important?
Quite simply: because it provides you with the data you need to make difficult decisions.
There are three specific ways that marketing intelligence can help you to make the best possible business decisions, allowing you to outcompete your competition and either take the lead or keep it.
Let’s look at each of the three stages of market intelligence.
Step 1) market entry research, or identifying market ppportunity
This covers everything you would want to know before moving into a market – it is not only deciding whether or not the market is viable, but it sets the foundations for creating your future business strategy.
Well collected market intelligence can provide you with the following market entry information:
- Current market size
- Future market growth
- Distribution channels
- Indication of price points
And from that, you can develop an understanding of:
- Resource allocation
- Potential revenue gain
- Pricing strategy
Step 2) competitor intelligence
Again, this term is often used synonymously with market intelligence, but the difference is important to understand: competitor intelligence regards information about specific companies within a market. This includes “the capabilities, vulnerabilities, and intentions of a business competitor,” according to the Strategic and Competitive Intelligence Professionals (SCIP).
Competitor intelligence is a subsection of market intelligence. The classic competitor intelligence research follows this line of questioning:
Who are your competitors? What is their market share?
However, the true value of competitor intelligence lies in going one step further, and asking the questions:
Why are your competitors successful? What could you do better? Can you identify their strengths and weaknesses?
That is how you gain a competitive advantage, and can hope to displace incumbents. Attest’s platform has been specifically developed to answer these questions – read The Importance of Measuring NPS to learn how you can do it.
Step 3) needs assessment, or how to develop your market
Give the customers what they want. This is how you break into the market, and expand your market share. It is heavily linked to the above point concerning customer satisfaction and NPS. Ultimately, we are talking about consumer intelligence.
This is where consumer research comes in. There are few substitutes for actually asking the customer what they want, what they like, or what they don’t like.
There are many different ways you can do this, but we’d recommend you start with our jobs to be done survey template for a simple, effective way of understanding the true needs of your target market.
How to gather market intelligence
The answer to this question depends on which stage you are at in the process – developing the foundations of market entry information is a different beast to understanding exactly what your customers want.
The single, unifying thread of all this information, however, is the customer; the foundations of market intelligence ultimately come back to the important questions we asked earlier:
Why are your competitors successful? What could they do better? How do consumers feel about them? What unmet consumer needs are there?
There is no escaping the importance of listening to your target consumers. We recommend you gather intelligence from two types of consumer:
Potential consumers – Speak to consumers who don’t currently own a product or use a service in your category. This will help you work out how much (if any) demand there is for your product/service where consumer needs are not currently being met by incumbents. Can you open up an entirely new market?
This is also known as ‘Blue Ocean Strategy’ and can be a highly profitable way to grow your business. The Nintendo Wii is a great example of this, which sold a games console to parents and casual gamers who had never before owned one, because they had been put off my the ‘hardcore’ gamer image presented by existing incumbents.
The pros of aiming for a blue ocean strategy are that you’ll be ‘competing’ in a market of one…in other words you won’t have much competition! This is also known as ‘first mover advantage.’ Profits are often higher, and the market may even become synonymous with your brand name.
The cons are that you may have to educate the market extensively (this is expensive), in order to win over customers not used to being products/services in your chosen category. You may also find yourself with lots of competitors very quickly, if you prove there is strong market demand.
Existing consumers/those in the market – This is where you would speak to existing customers of your future competitors. From this you can learn what they do and don’t like about the existing solutions in your market, and do a better job of meeting their needs.
The pros of this approach is that you know demand exists – if the market supports multiple businesses, you know there is an overarching need – and in theory this lowers your risk. It also involves less education.
The cons of this approach are convincing people to switch (also can be expensive) and potentially lower margins if you’re competing on price. This is where you really need to understand how you might add value as a brand, helping you to differentiate your offering enough that you don’t have to enter into a price war.
Once you understand market size and opportunity, competitor strength and weaknesses, and consumer needs you’ll have a lot of actionable market intelligence to work with.
The next step in your decision making journey is to make an assessment of those factors, so you can choose the best option based on the evidence you’ve gathered. To do this, you need to:
- Make sure your information has a purpose – it is vital to know why the information is being gathered; understand which part of the market you want to understand, whether it is competitors or market size. Only then can you…
- Give shape to your study – ask the right kind of questions, to the right kind of audiences; this is why it is essential to be precise and focused in your questions. Market intelligence done badly will lead to broad, unhelpful answers. Be specific, and get the information you are after, and therefore…
- Gather information that can be acted on – that is the essence of decision making. You need to gather enough information to give you a picture of the possibilities and pitfalls. But, firstly, the information has to be relevant and expansive enough to justify decision making.
If you’ve gathered your intelligence correctly, you should know be in a position to see whether a new product launch, an existing product extension or a geographic market expansion is best, based on:
- Size of market opportunity
- Strengths / weakness of competition
- Unmet consumer demand
Your ability to execute against each of these, based on your own internal strengths and weakness, capabilities and resources etc.
Market intelligence is about understanding the market you are in, or hoping to move into.
The majority of this market intelligence should be based on consumer feedback, because they will be the ultimate arbiter of your success…whether or not they buy or your product or service is the only metric that will matter. Why second guess that?
Attest provides a fast, effective and simple way for you to gather this market intelligence direct from consumers – over 30 million of them in 80 different countries.
From this data, every stage of market intelligence can be analysed, from market opportunities to product demand, competitor feedback, market growth.
From start to finish, Attest’s consumer led intelligence can be put to use at the heart of your decision making; when consumer demand and happiness is at the cornerstone of every successful business, what else matters?
Talk to our team about gathering market intelligence today.