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Market Intelligence – An Introduction

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 proving 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.

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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 the 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, 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! 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?

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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 décor 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,

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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’s 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 scared 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.

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Finally, a simple questionnaire is attached next page as an useful tool that should
help anyone to do MI without missing out anything and of course systematically so
as to simplify data…analysis…information.

Ajay S Kini, Principal Consultant at A.KINI & Co, a Management & Software
Consultancy firm, helps organisations develop effective strategies, systems,
procedures, legal compliances and relevant information technology applications
that optimise resources usage.
Contact him on ajaykini@akini.com with your issues for simple and fast resolution
Visit www.akini.com

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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

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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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