What is a Market Intelligence System(MkIS)?
A Market Intelligence System (MkIS) is one that systematically gathers and processes critical business information, transforming it into actionable management intelligence for marketing decisions.
Note the following points:
• Market intelligence is not just about market information, but the whole gamut of external environment information needed to support key strategic decisions – about products, prices, investment priorities, entering joint ventures etc.
• The system is not purely a computer-based system. It is a total system that incorporates human processes for interpreting and processing information into intelligence.
• The processes must be systematic, since only regular monitoring of key external parameters and integration of disparate snippets of information will give a viable longterm intelligence base.
Benefits of an MkIS
• Market and customer orientation – implementing an MkIS will encourage people throughout the organization to focus externally.
• Identification of new opportunities– One company in a component industry identified a new trend before the ‘expert’ industry analysts.
• Early warning of competitor moves – through good intelligence, one chemical company thwarted the sitting of a competitor’s manufacturing plant in one of their most profitable sales territories.
• Minimizing investment risk – ongoing intelligence and analysis is more likely to temper unbridled enthusiasm to follow the bandwagon into those “mustn’t miss the window of opportunity” markets
• Better customer interaction – An insurance company downloads into their salespeople’s portables up to date profiles, order history and relevant ‘news bites’, for the clients they are about to visit.
• Better market selection & positioning – good understanding of customer needs and competitor positioning will help a company better carve out its own unique niche
• Quicker, more efficient and cost-effective information – establishment of a system will make information more quickly and easily accessible. One company avoided the need for an expensive piece of market research by tapping into its existing MkIS.
Key Elements of an MkIS
Information: A continuous flow of information is the lifeblood of a good market intelligence system – information about new technologies, markets, customers, the economic and regulatory environment etc. Both formal (routine reporting, factual) and informal information (gossip, opinions) must be tapped.
Information Management Processes: With many professionals having external information delivered to their desktops, from online services such as Reuters or MAID, and increasingly from the Internet is easy to believe that users have all the information they need on tap. However, this is raw information and will need transforming into intelligence. Before that, however, this information must be classified, stored and made accessible – applying good practice principles of Information Resources Management (IRM).
Intelligence Development Processes: A good intelligence system is more than information. It is a recurring cycle of linking the needs of decision makers to the processes of turning the information into actionable intelligence.
This requires human interpretation, communicating and sharing of information and perspectives between internal and external experts.
Computer Systems: A comprehensive MkIS will combine many of the features of decision support systems, EIS, online databases and library systems. It is therefore likely to include many of the following:
• For gathering information: CD-ROMs, online data-base access, data feeds, email, Internet access, filters, intelligent agents etc.
• For storage and retrieval: Database/document management facilities, text retrieval, search engines, intelligent agents
• For processing and analysis: modeling and visualization software, groupware, group decision support systems (GDSS)
An Organizational Focus: Although many professionals do much of their own information gathering and analysis, there still needs to be a clear focal point of MkIS responsibility. This may be a named individual or a small group who have the distinctive skills needed (such as those promulgated by SCIP – the Society for Competitor Intelligence Professionals). Its role is to ensure a cohesive approach and effective interdepartmental co-ordination.
Developing an MkIS
MkIS in most organizations evolves through several phases:
1. Ad-Hoc. Individuals collect their own information. This phase culminates when management recognizes the need to focus resources.
2. Establishment of a specialist unit.
3. Introduction of computer based solutions.
4. Evolution into a full global electronic network.
5. Recognition of information as a corporate asset with appropriate information resource management (IRM) policies and procedures.
6. When appropriate, treating the resultant intelligence as a tradable commodity, to be shared with partners or sold externally.
Applications of MkIS
• Strategic Analysis & Scenario Planning
o Environment Forecasting
o Acquisition targets
o Location of new plants
o Supplier evaluation
• Marketing Planning
o Industry analysis
o Competitor analysis
o New product introductions
o Product portfolio
o Pricing
• Sales & Marketing
o Sales cycle management (targeting etc)
o Database marketing
o Sales forecasting
o Promotion campaign assessment