What Is Market Intelligence? (Importance and Components)
By Indeed Editorial Team
Published March 29, 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Market or business intelligence can help companies improve their consumer research and leverage their knowledge of consumer needs to enhance profitability. Several organizations use this information when developing business plans to guarantee that their service or product addresses the customers' needs. Understanding market intelligence can help you learn what aspects and strategies companies can leverage for profitability. In this article, we discuss market intelligence (MI), explain its importance, discuss the differences between MI and market research, outline its components, highlight the types, and offer helpful MI tips.
What is market intelligence?
Market intelligence involves a business's data regarding a specific industry or aspect to develop an effective business strategy. MI generally involves learning about the customers' habits, evaluating popular trends, and managing investments. Market analysts can gather MI by observing statistical information, networking with other professionals, and researching online. Accurate MI can enable a business to understand how an industry grows over a period. This knowledge is essential to business executives as it helps them develop accurate long-term plans.
Mi leverages some critical terms for easy understanding. For example, key performance indicators (KPIs) refer to quantifiable values that demonstrate a company's performance and target realization. The market is another MI term that describes all consumers and businesses in a specific area, including states, countries, and cities. Likewise, the industry is an MI term that refers to the collection of organizations and companies that concentrate on a specific topic, service, or product.
Why is MI important?
MI is an essential aspect of building a successful business. Here are some reasons why it's necessary:
Improving a company's industry status: MI can offer essential information regarding a company's standing in the industry, including methods for developing a brand. For example, a music production business can hire multiple artists who produce suitable material if it discovers a trending music genre.
Providing a company with constructive targets: Gathering customer and market-based information can help businesses discover possible short- and long-term fact-based targets. For example, an analyst can set a target to reach or surpass a company's revenue in the coming year by assessing a competitor's sales data.
Predicting a product's success: Product research involves learning whether a service or product has specific characteristics that appeal to customers in a broader market. This segment of MI can assist a company in determining which products to prioritize and develop.
Enabling the company to keep more customers: MI can assist companies in observing different demographics that can disclose the marketing strategies that are effective upon analysis. For example, a company can adequately appeal to a specific demographic if research demonstrates that people significantly purchase a particular product or service.
Increasing overall sales revenue: Companies can improve customer and prospective customer engagement leading to increased revenue by incorporating industry standards and preferences. This approach can help the company decide on more cost-effective investments.
Market intelligence vs. market research
Market intelligence and market research each possess different purposes and scopes in a marketing strategy. MI commonly emphasizes interpreting global consumer trends, while market research concentrates on understanding customer preferences for a particular company. A company can leverage both concepts for a marketing strategy depending on its objectives. For example, a company researching the effectiveness of its product can use MI to analyze the purchasing behaviour of previous purchasers from several demographics. The company may follow through by leveraging market research strategy to accurately understand why certain demographics are more likely to buy an item over another.
Components of MI
Here are some examples of MI's core components:
MI groups commonly establish an overarching target for their MI research activities, and it typically addresses the current and potential customers' needs and competitor strategies. This process can assist a team in selecting a research method, offering them the ability to enhance their data resources. For example, a group can set a target for determining which technology appeals to people from a particular population if they analyze a technical industry.
A group may research several other topics for its MI, including cross-marketing, a promotion method where a group uses a service or product to advertise another. For example, a streaming service can promote trailers for other movies and TV shows that the streaming service company produces. An MI group also researches purchasing patterns which refer to customer behaviour concerning different services or products. Locating trends can assist teams in understanding which products or services sell faster to predict the locations where customers may buy the products in the future.
Research area and method
Marketing teams also commonly concentrate on a type of data for collection, including a specific product's annual sales in a broad industry. It may also include a rival company's investment statements. A team can also choose a data collection method by narrowing their emphasis. For example, a company may focus research on a film to collect intelligence for video-editing software. The company can also concentrate its research on the entire revenue for software in a specific market. Afterwards, they can predict the most effective approach for understanding new information.
Marketing teams also gather data from several sources and through various contexts. Some groups collect data from reports of companies available online or in public governmental databases. Other teams may retrieve data from distributors or sales representatives to get an alternative view. They can also assess online surveys or prepare polls using multiple social media platforms. Some marketing teams may incorporate market research by choosing people to participate in a focus group to collect more precise data about their company.
Marketing teams scrutinize data to establish which information to prioritize and discover trends. Some individuals apply specialized marketing software to convert lists and tables of data into specific and accessible categories. Other teams may use a marketing analysis strategy that compares several poll results or a cross-tabulation to identify connecting data pieces. Teams that use market research in their investigations can benefit from sentiment analysis, which generally examines the consumers' moods and emotions during vital interactions.
Reports and presentations
Marketing teams combine their data into actionable reports for executives or other company stakeholders. They may use a visual representation of graphs, images, and charts to convey the information. Marketing software can also assist a team in arranging information logically, ensuring that the team can develop a presentation for stakeholders to assess. They can share the report with other company staff members to help them correctly understand industry standards and improve their work practice's quality.
Types of MI
Here are the four categories of MI:
Competitor intelligence refers to gathering information regarding a competing company's business approach. This includes how they approach vital decisions and promote their brand. It may also involve monitoring its performance through federal databases and media coverage. A marketing team can evaluate reviews of a competing company through other websites to understand its practices from a customer's perspective. This can help them develop new strategies to advertise their brand.
This involves a marketing team that collects data about competing products that other companies in the same industry sell. The team can utilize public industry sources to observe how customers use different features and products. This helps a company determine if its items meet specific requirements. For example, a food processing company may monitor several competing stores' almond sales over six months. A company may produce more of a particular flavour if the marketing team reports that consumers prefer that flavour over another.
Market understanding refers to learning about several aspects of an industry, including multiple trends, target demographics, and size. This means that a marketing team can accurately understand how to devise relevant items and advertise effectively by understanding what customers prefer. For example, a production company's social media manager may assess website analytics for a streaming platform. The company may develop a new video series around a concept if the manager indicates that certain fictional content is popular.
Customer understanding involves researching the habits and backgrounds of a company's consumer base. Marketing teams commonly use market research for this intelligence, as directly reaching customers and spending time with them can provide custom advertisement methods. For example, a team may perform a series of personal interviews regarding consumer views on an industry. Afterwards, they may employ analysis results from the interviews to influence future marketing campaigns and initiatives.
Tips for gathering MI
Here are three essential tips for collecting marketing intelligence:
Use and measure KPIs: Observe your MI efforts' effectiveness by setting KPIs using custom software. For example, you could monitor if the intelligence helped the company improve its revenue or assess the quality of information collected.
Interview outside associates: Discuss industry preferences with associates or external companies that sell your products to receive insights from their perspectives.
Hire a consultant or agency: Connect with a company that provides MI assistance and resources. This option may especially be helpful for a larger company with a broad consumer base as a dedicated professional or organization may have more efficient strategies for collecting data.
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