Increasingly, companies are purchasing analytics software to help them pull and make sense of internally generated information. Analytics software allows managers who are not computer experts to gather different information from a company’s databases—information not produced in reports regularly generated by the company. The software incorporates regression models, linear programming, and other statistical methods to help managers answer “what if” types of questions. For example, “If we spend 10 percent more of our advertising on TV ads instead of magazine ads, what effect will it have on sales?” Oracle Corporation’s Crystal Ball is one brand of analytical software.
The camping, hunting, fishing, and hiking retailer Cabela’s has managed to refine its marketing efforts using analytics software developed by the software maker SAS. “Our statisticians in the past spent 75 percent of their time just trying to manage data. Now they have more time for analyzing the data with SAS, and we have become more flexible in the marketplace,” says Corey Bergstrom, director of marketing research and analysis for Cabela’s. “That is just priceless” (Zarello, 2009).
The company uses the software to help analyze sales transactions, market research, and demographic data associated with its large database of customers. It combines the information with web browsing data to gain a better understanding of the individual customers’ marketing channel preferences as well as other marketing decisions. For example, does the customer prefer Cabela’s 100-page catalogs or the 1,700-page catalogs? The software has helped Cabela’s employees understand these relationships and make high-impact data-driven marketing decisions (Zarello, 2009).
A good internal reporting system can tell a manager what happened inside a firm. But what about what’s going on outside the firm? What is the business environment like? Are credit-lending terms loose or tight, and how will they affect what you and your customers are able to buy or not buy? How will rising fuel prices and alternate energy sources affect the firm and its products? Do changes such as these present business obstacles or opportunities? Moreover, what are competitors up to?
Not gathering market intelligence leaves a company vulnerable. Remember Encyclopedia Britannica, the market leader in print encyclopedia business for literally centuries? Encyclopedia Britannica didn’t see the digital age coming and nearly went out of business as a result. (You can now access Encyclopedia Britannica online.) By contrast, when fuel prices hit an all-time high in 2008, unlike other passenger airline companies, Southwest Airlines was prepared. Southwest had anticipated the problem, and had locked in contracts to buy fuel for its planes at much lower prices. Other airlines weren’t as prepared and lost money because their fuel expenses skyrocketed. Meanwhile, Southwest Airlines managed to eke out a profit. Collecting market intelligence can also help a company generate ideas or product concepts that can then be tested by conducting market research.
Gathering market intelligence involves a number of activities, including scanning newspapers, trade magazines, and economic data produced by the government to find out about trends and what the competition is doing. In big companies, personnel in a firm’s marketing department are primarily responsible for market intelligence and making sure it gets conveyed to decision makers. Some companies subscribe to news service companies that provide them with this information. LexisNexis is one such company. It provides companies with news about business and legal developments that could affect their operations. Other companies subscribe to mystery shopping services, companies that shop a client and/or competitors and report on service practices and service performance.
An obvious way to gain market intelligence is by examining competitors’ websites as well as doing basic searches with search engines like Google. To find out what the press is writing about a company, its competitors, or any other topic, sign up to receive free alerts via email via Google Alerts.
Suppose you want to monitor what people are saying about you or your company on blogs, the comment areas of websites, and social networks such as Facebook and Twitter. You can do so by going to a site like WhosTalkin.com, typing a topic or company name into the search bar, and voilà! All the good (and bad) things people have remarked about the company or topic turn up. It’s a great way to seek out the shortcomings of competitors. It’s also a good way to spot talent. For example, designers are using search engines like WhosTalkin.com to search the blogs of children and teens who are “fashion forward” and then involve them in designing new products.
WhosTalkin.com and Radian6 (a similar company) also provide companies with sentiment analysis. Sentiment analysis is a method of examining content in blogs, tweets, and other online media (other than news media) such as Facebook posts to determine what people are thinking. Some companies use sentiment analysis to determine how the market is reacting to a new product. The Centers for Disease Control (CDC) uses sentiment analysis to track the progress of flu; as people post or tweet how sick they are, the CDC can determine where the flu is increasing or decreasing.
The Economist, The Wall Street Journal, Forbes, Fortune, BusinessWeek, the McKinsey Report, Sales and Marketing Management, and the Financial Times are good to read to learn about general business trends. All discuss current trends, regulations, and consumer issues relevant for organizations doing business in the domestic and global marketplace. All of the publications are online, although you might have to pay a subscription fee to look at some of the content. Some of these publications have Asian, European, and Middle Eastern editions.
Other publications provide information about marketplace trends and activities in specific industries. Consumer Goods and Technology provides information consumer packaged-goods firms want to know. Likewise, Progressive Grocer provides information on issues important to grocery stores. Information Week provides information relevant to people and businesses working in the area of technology. World Trade provides information about issues relevant to organizations shipping and receiving goods from other countries. Innovation: America’s Journal of Technology Commercialization provides information about innovative products that are about to hit the marketplace.