The article below is based on Kotler, P., & Armstrong, G. (2016). Principles of Marketing sixteenth edition. Image by QS Study.
In general, there are three ways for entrepreneurs to gather information about the market:
- Internal data
- Marketing intelligence
- Market research
Together they form the marketing information system: a structured approach where the company constantly collects information about the environment in order to maintain a customer-oriented marketing strategy.
The greatest challenge of the information system is to determine what information is relevant and how to collect it effectively and efficiently. Simple data analyses are often sufficient for this. For example: (a) who buys (b) what (c) most often in the webshop and (d) from which place of residence? Simple observation techniques can also provide you with a lot of information, for example when shopkeepers observe the behavior of their customers in the store or have a chat with them.
Internal data
Internal data can consist of:
- Sales database (Who buys what, for how much, when and where).
- CRM management systems with all potential customers, ordered by financial value, level of interest and industry (e.g. Salesforce software)
- Web analytics that analyze the click behavior of a customer on a website. Which ‘path’ does the customer take online and how can we change this ‘path’ into more conversion?
Marketing Intelligence
Kotler and Armstrong (2017) define marketing intelligence as follows: “The systematic collection and analysis of public information about competitors and market developments to support marketing decisions.” This involves routine, planned research (as opposed to ad hoc market research), for example weekly checks of competitor prices or online reviews.
Examples of marketing intelligence are:
- Motivate intermediaries to pass on customer information (e.g. wholesalers)
- Visit networking activities, both internally (office drinks) and externally (conferences)
- Set up a customer panel
- Consult data collected by the government (e.g. Central Bureau of Statistics)
- Buy reports on consumer behavior collected by research firms such as Nielsen and Euromonitor
- Motivate the sales team to report new developments to the marketing department
- Observe through management by walking around. For example, customer behavior in a store
- Collect marketing information on the internet:
- reviews on platforms such as amazon.com and zalando.com
- independent review websites such as trustpilot.com and tripadvisor.com
- forums, for example Reddit
- expert blogs
- news
- google a topic (e.g. trend, competitor) you want to know more about
As you can see, there are many possibilities. When selecting a marketing intelligence tool, it is recommended to map out the costs and benefits. Sometimes expensive forms of marketing intelligence such as buying industry reports provide relatively little additional value compared to cheap forms such as scouring the internet.
Market research
Kotler and Armstrong (2017) define market research as follows: “The systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization.” This is research that is not routine, as marketing intelligence is. For example: a company is thinking about international expansion and wants to explore the potential of three countries.