What are market intelligence tools?
Market intelligence tools can be defined as information or data on a business’s external environment. It includes key elements such as competitors, customers, products and the overall market scenario.
Market intelligence tools data is mainly used to provide insights that educate strategic decision making in businesses, giving the tools to anticipate and respond to changing market dynamics.
Types of market intelligence tools
There are four main types of market intelligence tools: customer intelligence, product intelligence, market understanding and customer understanding. Each addresses a unique aspect of a business’s environment.
|1||Competitor intelligence||An in-depth study of your competitors – their strategies, strengths, weaknesses and market position. Customer intelligence helps your business to anticipate your competitors’ moves and devise counter strategies to boost your competitive advantage.|
|2||Product intelligence||Focused on the lifecycle of your products and your competitors’, product intelligence includes tracking product development, features, pricing and performance. By understanding these aspects, a company can innovate and adapt its products to meet evolving market needs.|
|3||Market understanding||An analysis of the broader market your business sits in. Market understanding includes assessing market size, growth rate, trends and segments – and the factors driving them. It enables a company to spot opportunities and threats early, and adjust strategies accordingly.|
|4||Customer understanding||Gaining a deeper understanding of your customers – their needs, preferences, behaviour and satisfaction levels – customer understanding enables your company to adapt its offerings for real customer needs and foster better customer loyalty.|
Mini case study: Market intelligence tools in action
Let’s look at a quick example of how a business can use the different types of market intelligence tools to guide its strategy.
A leading company in the skincare industry uses market understanding to identify a market shift towards organic products. Recognising this trend, it decides to develop a new line of organic skincare products.
At the same time, competitor intelligence reveals that a key competitor is planning to launch a similar organic line. Anticipating the threat this could pose to its new launch, the company expedites its product development and launch timeline to ensure it goes to market as the first-mover. The company’s strategy leads to an increased market share and strengthened brand reputation.
This mini case study showcases the importance of market intelligence tools in identifying consumer trends and competitor strategies. In this case, we can see how it enabled proactive decision-making within the company, helping it cater to evolving consumer demands and improve its market position.
Market intelligence tools vs. business intelligence
Market intelligence tools and business intelligence are often confused. Both play crucial roles in strategic decision making, but they certainly differ in their scope and focus.
Market intelligence tools focus on the external environment of a business. It involves gathering and analysing information about the market, including competitors, customers, trends and products.
Business intelligence, on the other hand, focuses on the internal data of a business. It involves analysing data related to a company’s operations, such as sales data, financial data and operational efficiency.
Both are essential for a business to make informed, strategic decisions – and the best run businesses use them in tandem.
Market intelligence tools vs. market research
As is often the case with business intelligence, market intelligence tools and market research are also commonly confused. Here’s why they’re different.
Market intelligence tools are a continuous process that covers a broad scope. It includes not only information about customers but also competitors, products and overall market conditions – involving both primary and secondary data collection methods to provide a comprehensive understanding of the market environment.
Market research tends to be more narrowly focused and project-based, providing deep insights into specific market questions. Usually only involving primary data collection methods, such as surveys, interviews and focus groups, market research is generally used to answer specific questions about the market.
Both play important roles in helping a business succeed in its market. And again, the best businesses use both methods.
Why are market intelligence tools important?
Market intelligence tools play an important role in ensuring the longevity and growth of businesses. They do this by guiding several business processes that are themselves key determiners of a successful business – and an unsuccessful one.
|1||Decision making||Market intelligence tools provide the factual foundation for strategic decision making. From product development to pricing strategy, marketing campaigns to customer service enhancements, every business decision can be better informed by leveraging market intelligence tools.|
|2||Competitive advantage||Understanding competitor strategies and customer preferences empowers a company to stay ahead of the competition. By proactively adapting to market trends and competitor moves, a business can maintain its competitive advantage.|
|3||Risk mitigation||Market intelligence tools can be used to flag market threats early, be them new competitors, changing customer preferences or regulatory changes. This enables businesses to formulate appropriate risk mitigation strategies in response.|
|4||Identifying new opportunities||Market intelligence tools can identify unmet customer needs, emerging market segments and new geographic markets – opening up avenues for business growth.|
How to collect market intelligence tools data
Collecting market intelligence tools data often involves combining various methods to give a holistic understanding of your market environment. The specific methods you use, however, all depend on the type of intelligence you’re looking for.
Here are some of the most commonly used methods.
One of the most direct ways of gathering intelligence – especially customer intelligence – is through surveys. They can be conducted online, over the phone or in person, and give access to large samples of people.
Interviews and focus groups
Two of the most popular forms of primary research, interviews and focus groups involve direct interaction with everyone from customers to industry experts, and even employees of competitors. They can provide in-depth insights into customer preferences, competitor strategies and market trends.
Publicly available data
Valuable market intelligence tools data often comes from public sources, like government reports, industry journals and financial reports of competitors.
Social media monitoring
An area of market intelligence tools that has become increasingly important, particularly over the past decade. Social media monitoring involves tracking conversations on social media platforms to understand customer opinions, feedback and trends. Brands can use monitoring tools to analyse commentary of themselves and their products – and the same for their competitors.
Websites and marketing collateral
This involves observing competitor websites, editorial, press releases and any other form of promotional material that can provide valuable insights about their strategies, upcoming products and target customers.
Purchase and usage data
This method involves analysing data from customers’ purchases and product usage. In the age of the digital subscription, this is another area that’s become more influential of late.
How to use market intelligence tools data
Once you’ve collected market intelligence tools data, the next step is to use these insights to inform your business decisions.
Whether you’re a startup trying to establish your brand or an established company looking to expand, the power of market intelligence tools lies in its application.
Here are some of the main ways businesses use market intelligence data.
Market intelligence tools help businesses to formulate both short-term tactical strategies and long-term strategic plans – and everything in between. It helps you identify where you stand in the market, what your strengths and weaknesses are, and how you can leverage opportunities and mitigate threats.
Steering product development
Insights from market intelligence tools – specifically product intelligence – can significantly influence a business’s product development process. It can help you understand what features customers appreciate, what problems they face and what needs are unmet, enabling you to design products that better cater to your customers’ needs.
Educating marketing and sales
By providing insights into what channels your customers use, what messaging resonates with them and what their buying journey looks like, market intelligence tools can play a key role in guiding your marketing and sales strategies.
Improving customer service
To enhance your customer service you first need to understand your customers’ experiences, pain points and expectations. Market intelligence tools can shed light on them all, and also illuminate parts of your customer service flow that are in need of improvement.
Adjusting pricing strategy
Market and competitor intelligence can inform a more effective pricing strategy by helping you understand the pricing tactics of your competitors and the price sensitivity of your customers. Put the two together and you have the tools to optimally price your products – balancing profitability and competitiveness.