Market intelligence for competitive advantage

Marketing and Selling in tough times:

“Keep your organization’s doors and windows open and keep your ears to the ground” - Anonymous

“Information is power” is a slogan that emphasizes the importance of quality information for business success. The winners in the marketplace have in their possession valuable information about the external marketplace. In this article, I will highlight the key areas about which market intelligence is required and methods to obtain same.

Competitor Strategy - What is the present marketing strategy followed by key competitors. Is it a volume or margin strategy? Is the competitor satisfied with the outcome of the strategy? Is the strategy a short term or long term one?

How do you obtain information about competitor strategy? One easy method is to monitor their advertising and promotional strategy.

What is the message communicated? How much has been spent on the campaign? What mediums have been used?

Duration of the campaign? Another method would be to observe the competitor in action, out in the market. Keep a close eye on their distribution methods, frequency of visits to customers and relationships with customers.

Competitor strategy related information can also be obtained by carrying out a market research study. This exercise will be expensive but should be budgeted for .

Insights into the key personnel of competitor organizations -

Who is the think-tank? What are their backgrounds? Are they satisfied with their job / employer? For example, if the top management of a competitor organization has a technical bias, many decisions will be taken from that perspective. The more dangerous competitor would be where the top management has a marketing and finance bias, since they will aspire for a balanced strategy. (Share vs margins).

Information about the key personnel of competitor organizations can be obtained from annual reports and other internal publications. A mutual friend working in a competitor organization can also provide this information.

Competitor strengths and weaknesses - This needs to be analysed from several perspectives, such as product, service, structure, human resources, distribution channels, liquidity position and asset base.

A good way to start is to make a clear assessment of your organization’s strengths and weaknesses. In most instances, your strengths become competitors weaknesses and vice-versa. Always remember that the experience you gain by facing the competitor in the market, is the best method of determining strengths and weaknesses.

Competitor response profiles - This means assessing how the main competitors respond to your strategies. Competitors can respond in a predictable, unpredictable or aggressive manner. Competitors who are predictable are vulnerable, but the most dangerous competitors would be the unpredictable and aggressive.

It is not that difficult to determine the response profile of competitors. If you monitor their strategies carefully, a really good insight can be obtained, over a period of time.

Macro environmental factors - Referred to as PESTEL (Political, Economic, Socio-cultural, Technological, Environmental and Legal) factors. These factors have a major impact on the sustainability of an organization’s competitive advantage.

Secondary data and research provides the best avenue to obtain up-to-date information regarding PESTEL factors. However, PESTEL factors need to be correlated to your organization’s strategies, to assess their impact. For example import duties will have a positive or negative impact on pricing of imported products.

Environmental factors can be an important aspect for future competitive advantage. Being proactive towards environmental regulations is the best approach.

In Sri Lanka, there is a wealth of information relating to PESTEL factors - The Central Bank Report and other publications, The Institute of Policy Studies and their publications and The Department of Census and Statistics (Publications). The problem is that there is an absence of a central source of all information!

Customer / Consumer Profiles - Marketers need to have in-depth information about their current consumer profiles, buying behaviour, loyalty levels and satisfaction levels. Regular market research needs to be supplemented with ad-hoc research. Further, marketplace observations can also provide valuable insights.

In this article, I have endeavoured to highlight information needs and sources for competitive advantage. Information is indeed power. By creating a learning organization, a knowledge based culture can be inculcated.