What is Market intelligence?
First things first! Many organisations see market intelligence as a cost rather than an investment and hence the bitter fact that so much remains to be done on market intelligence when it comes to strategizing one's marketing & sales plan.
I strongly advocate continuous investment in MI, as this article will show, the value you get and benefits that accrue far outweigh your costs incurred. It also proves beyond doubt that MI is indeed an investment rather than cost.
I define MI as a systematic way of consistently gathering data, through various sources, on all factors that impact in some way or the other how you do business and then analysing this data into meaningful information which helps relevant personnel make effective strategies that increases profitable sales.
MI comprises of tracking your competitors-both direct and indirect, new entrants, new expectations/needs of customers, new trends/technology development, government legislation and changes, new emerging markets, suppliers business practices and nowadays technological development, especially analytic software.
And now coming to the important core of this article...
How does MI help?
Benefits of MI
How to obtain MI? etc.
1. Benchmark yourself:
When you gather MI data and convert it into meaningful data through analysis (I have repeated many times so as to emphasise - data... analysis... information) it gives a clearer picture of where your organisation stands with respect to others in your playing area. This usually spurs organisations on to sprint and try catching up with the leader. On the other hand it enables the leader to know the exact lead over others and try to increase it to safer distance.
Getting to know their strengths and weaknesses enables your organisation to learn from their strengths whilst exploiting their weaknesses.
Learn new ideas, methods or systems that others have successfully implemented and used to beat you up with. This also brings home the ideas, systems or methods that are unique to your organisation, yet enabling action plan to keep this USP's longer with you.
Become aware of new areas, applications and industry sectors where your products can be introduced.
Develop new suppliers or adopt new practices for better leveraging your purchasing activity.
Helps business planning and forecasting become more focussed and realistic.
2. Internal HR benefits:
My experience with most of my clients has been that data when effectively analysed in to meaningful information brings about a transformation in people. Especially marketing, sales and related back-office personnel, by reducing complacent attitude and increasing disciplined approach, better team-play, increased awareness of live and let live attitude, since try however you can you cannot wish the others out of your way. And last but not the least, makes everyone continuously strive to improve.
3. What data makes meaningful information?
Typically most organisations find answers of following questions very useful to have MI of substance.
a) Who are the other organisations directly competing for the same piece of pie? Surprisingly, due to lack of systematic and consistent MI efforts most organisations rely on field personnel discussions, hear-say, assumptions and what many experienced seniors proudly proclaim to be their "gut-feeling". Ask for a written document and few have them - obviously the successful ones!
b) Who are the other organisations indirectly competing for the same piece of pie?
This is something that I have yet to fathom - Why many organisations, leave aside tracking, do not even recognise the existence and therefore the importance of indirect competitors. An example here would bring home the point clearly...
In the late 80's most of the leading FMCG's were experiencing stagnation in their top-line growth and were tempted to declare reaching market saturation until an Indian CEO of a MNC had this flash of an idea - the mom-and-pop stores known as kirana shops in India which were considered part of their supply chain were actually their toughest competitors. This is true especially in interior, moffusil and rural areas. The daily wage earning folks were unable to buy the big companies standard pack-sizes and hence bought in "loose quantities" as per their requirement and that too some cheap local brand which the kirana sourced from and vouched for! That this led to the launch of satchets is a different story altogether! The lesson here is - look for organisations that do not sell similar products but sell something that can replace or meets the need that you claim your product meets. A client of mine selling specialised lubricants to metal forming industries has cooking oil competing!
c) Do your competitors have a package concept which meets multiple needs of your target customers against a specific product/application you sell?
You need to focus on a value based stand-alone specialist approach here and avoid the cost and package argument.
d) What are the features and benefits your competition offers which are absent or not matching up in your products.
e) What way their services are more effective or beneficial to customers compared to yours? Services here mean from the way your organisation answers telephone calls or receives visitors in office to office decor and environment to the way your employees dress, present and communicate to the relationship your sales personnel build (yes, relationship can only be built over a period of time) with influencers to product packing to informative product literature to delivery methods and time to post-sales support to helping out in their times of distress (personal or official). Got it? The whole gamut of service possibilities includes gifting and meeting subtle needs many a times.
f) The pricing policies, payment terms and delivery system.
Whilst benefit/value-based selling against price point objections is the standard advice all give, it is really tough to practice and win orders, especially in a price-conscious market like India. Add to these the flexibility of paying you and how you deliver - direct from your factory - which means more time and transportation costs or through local dealer or warehouse - just-in-time delivery and local transportation.
g) Who are your competitors' customers?
It is very important to track customers, especially the big accounts, of your competitors. This opens your eyes to new industry segments/applications, new geographical areas and of course the good old yet evergreen point - what is it that customers' perceive to be more beneficial when buying from your competitor rather than from you? What do their customers say about them?
h) What are their marketing and promotional strategies?
What is the important benefit, feature or point which makes customers buy from them? How are their brochures, manuals and other literature, not just in terms of content and graphics but also style, layout, paper quality and presentation? Do you have your competitors' literature - No! You are missing something. How do they advertise and where? Which are the exhibitions, seminars they participate or conduct? How many field sales personnel do they employ along with number of distributors/dealers/representatives? What kind of budgets do they have for these activities? How their website is and what kind of information/content have they put up? Have they listed their customers, important events, achievements or latest customers/order acquisition, the latest machine or capital good installed or new factory/branch opened or new distributor/dealer appointed? What do they say about themselves in public directories, yellow pages and industry-specific magazines - print as well as online? How do they project in advertisements - recruitment and others?
i) Who are their suppliers?
An important point many fail to recognise is the potential source of information that suppliers can be. Most organisations have tight norms in place for what they classify as critical or proprietary inputs but forget that even packing materials or may be the stationery or tea-vendor acquire important insights. Also, supplier information gives you an idea about the material costs, quality level and financial practices and strength of your competitors.
j) What is your competitors' financial muscle?
Have you got your competitor's final accounts for the last 3 years from the Registrar of Companies office or if it is publically listed then from their website or stock exchanges? Better still is to buy a few shares in your personal or family member's name. Compare important financial ratios with yours as also management discussion and analysis and other forward-looking statements made. Proprietary and partnership firms score over here.
What to do with all this data?
Compilation, sorting and storing for quick retrieval of data is very important.
Next is to tabulate similar information in to comparable form by way of tables, charts or reports.
Brain-storm and discuss with all relevant personnel to ensure a meaningful analysis covering all perspectives.
Make a list of these findings, observations and strategies.
Prepare an action plan that defines who does what, when, where, how and why.
Repeat this at least twice a year like a sacred ritual and see your business confidence, top and bottom-lines and customer base grow in line with your business plan and forecasts.
Before concluding, remember what you do as above are also being done, probably better, by your competition. Hence, put checks and balances in place and hope for the best, since like anti-virus software the best can only protect but may not be enough to save you when it really matters! Do unto others what you would like others to do unto you should be the guiding maxim to decide what is ethical and acceptable and what not to do.
Finally, a simple questionnaire is attached as a useful tool that should help anyone to do MI without missing out anything and of course systematically so as to simplify data... analysis... information.
Basic Questions for effective Market Intelligence
1. Who are our direct competitors?
2. What is their product range?
3. Which products from their range compete with ours?
4. Comparison between their and our product:
a. Features
b. Applications
c. Industry segment
d. Area
e. Literature
f. USP's
g. Price
h. Market position
i. Market share
j. Suppliers
5. Comparison between their website and ours:
a. Colour combination
b. Layout
c. Menu and Content
d. Product presentation style
e. Downloads offered
f. Search engine rank (Google, Yahoo, Bing)
g. Latest news, acquisition and customer list available
6. Financial comparison:
a. Sales turnover
b. Gross profit (figures & ratio to Sales)
c. Net profit ( ----------" -------------------)
d. Sales & Marketing expenses as a ratio to Sales
e. Employee costs as ratio of Sales
f. Expenses on IT as a ratio to Sales
g. R & D expenses as a ratio to Sales & details, if available
h. Product-wise, area-wise and segment-wise details, if available
i. Excise, VAT, Customs and Income tax paid (figures & ratio to Sales)
j. Management analysis & risk perception, future plans and achievements in Directors report
7. Marketing & Selling strategies:
a. Product brochure presentation & key features
b. User manual features
c. Trouble shooting guide
d. Maintenance & preventive spares details
e. Quotation presentation
f. Payment terms & delivery methods and costs
g. Warranty details
h. After sales support system
i. Customer relationship building initiatives and methods
j. Advertisement channels and frequency
k. Exhibitions & seminars participation
l. Magazines/journals/directories/yellow pages/industry directory advertised
m. Supply chain model - direct selling, distributors, dealers, C&F
n. Logistics model - method. cost and time for delivery
8. Have any of your customers stopped buying from you and gone to competition? If yes, why. Similarly, have you acquired any customer of your competitor? If yes, what were the pain points and trouble-some issues?
9. What do their top customers say about them?
10. What do they say about themselves- literature, website, advertisement and articles?
11. Who are your indirect competitors?
a. Common application or customers use
b. Features comparison
c. Price comparison
d. Value-benefit analysis
e. Type of customers buying
f. Market share or volume
12. What are the checks and balances in place you have to protect your organisation?
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