Market intelligence (competitive intelligence, business intelligence)

Market intelligence, also referred to as competitive intelligence or business intelligence, is the information one company is able to accumulate about another based on data gathered from public sources and effective interviewing. Market-intelligence systems are used to help managers assess their COMPETITION but do not constitute corporate espionage since the ethics and legality of methods used to collect information are different. The SOCIETY FOR COMPETITIVE INTELLIGENCE PROFESSIONALS has a code of ethics that includes compliance with all laws, respect for confidentiality requests, avoiding CONFLICT OF INTEREST, and abiding by company policies. Most major American companies have market-intelligence units monitoring and assessing information from a variety of sources about their competitors. The data gained through market intelligence and ENVIRONMENTAL SCANNING (collecting information about the external marketing environment) are used in making decisions; the goal is to become a more efficient and effective competitor. U.S. automobile manufacturers sometimes note that the first purchasers of their new cars are competitors who will then take the car apart looking for ideas, methods, and features that can be used in their PRODUCTs. Market intelligence can be derived from a variety of sources, including
• articles written about a company
• advertisements
• published interviews with company executives
• government agencies, including PATENT, environmental, and local ZONING offices
• reporters and analysts who cover a company
• company employees
• consultants
• suppliers
• TRADE SHOWS
• direct observation of competitors’ businesses
• customers
• use of “secret shoppers”
• job INTERVIEWING
Business managers use many of the above market-intelligence practices. In one survey of small businesses, discreetly observing a competitor’s firm and asking suppliers and delivery people about competitors were the most widely used market-intelligence methods. The amount of information vendors can obtain about other businesses can be amazing. For example, the same trucking company often supplies appliance retailers, and printers frequently provide marketing materials for competing firms. Sales representatives always know what competitors are doing and often what their plans include. Generally if a firm uses a method of gaining intelligence, they assume their competitors also utilize the same method; and if they use a certain method, they think it is ethical. Asking customers to solicit bids from competitors, using job interviews to learn about competitors, and hiring people away from competitors are considered the leastethical market intelligence practices. To reduce market-intelligence leakage, most business managers instruct their employees on not divulging company plans or procedures. Some firms disguise their marketing strategies in order to reduce competitors’ knowledge of their actions. One sales representative knew his competitors were finding his prices through his customers’ office staff. He sometimes would quote a price to a customer and then fax a written confirmation with a higher price. He would then follow up the fax with a call correcting the information and a second bid quotation sent by mail. Competing sales representatives sitting in customers’ offices would quote a price under his faxed quotation and not understand why they were not the low bidder. New businesses generally utilize public sources of information, including tax records, government documents, and ADVERTISING. As they become established and develop industry contacts, firms replace public-information sources with industry contacts such as sales representatives and delivery people. Frequently businesses have market-intelligence information available within their organization but fail to ask employees for it. Market-intelligence professionals know that ultimately people are the best source of information.