1. THE MARKETING INTELLIGENCE SYSTEM
A marketing intelligence system is a set of procedures and sources that managers use to obtain everyday information about developments in the marketing environment. The internal records system supplies results data, but the marketing intelligence system supplies happenings data. Marketing managers collect marketing intelligence by reading books, newspapers, and trade publications; talking to customers, suppliers, distributors, and other company managers; and monitoring online social media.
Before the Internet, sometimes you just had to go out in the field and watch the competition. Describing how he learned about a rival’s drilling activity, oil and gas entrepreneur T. Boone Pickens recalls, “We would have someone who would watch [the rival’s] drilling floor from a half mile away with field glasses. Our competitor didn’t like it but there wasn’t anything they could do about it. Our spotters would watch the joints and drill pipe. They would count them; each [drill] joint was 30 feet long. By adding up all the joints, you would be able to tally the depth of the well.” Pickens knew that the deeper the well, the more costly for his rival to get the oil or gas up to the surface, information that gave him an immediate competitive advantage.7
Marketing intelligence gathering must be legal and ethical. The private intelligence firm Diligence paid auditor KPMG a fine of $1.7 million after its cofounder posed as a British intelligence officer and convinced a member of the audit team to share confidential documents about a Bermuda-based investment firm for a Russian conglomerate.8
A company can take eight possible actions to improve the quantity and quality of its marketing intelligence. After describing the first seven, we devote special attention to the eighth: collecting marketing intelligence on the Internet.
- Train and motivate the sales force to spot and report new developments. The company must “sell” its sales force on their importance as intelligence gatherers. Grace Performance Chemicals, a division of W. R. Grace, instructed its sales reps to observe the innovative ways customers used its products and suggest possible new products. Some customers used Grace waterproofing materials to soundproof their cars and patch boots and tents. Seven new- product ideas emerged, worth millions in sales.9
- Motivate distributors, retailers, and other intermediaries to pass along important intelligence. Marketing intermediaries are often closer to the customer and competition and can offer helpful insights. Combining data from its retailers Safeway, Kroger, and Walmart with its own qualitative insights, food producer ConAgra learned that many mothers switched to time-saving meals and snacks when school started. It launched its “Seasons of Mom” campaign to help grocers adjust to seasonal shifts in household needs.10
- Hire external experts to collect intelligence. Many companies hire specialists to gather marketing intelligence.11 SavOn Convenience Stores, an enterprise of the Oneida Indian Nation, conducts 52 “mystery shopper” visits a month across its 13 stores. Stores are graded on employee responsiveness to customers, product quality, food freshness, restroom cleanliness, and stock levels. SavOn gives awards to winning stores.12
- Network internally and externally. The firm can purchase competitors’ products, attend open houses and trade shows, read competitors’ published reports, attend stockholders’ meetings, talk to employees, collect competitors’ ads, consult with suppliers, and look up news stories about competitors.
- Set up a customer advisory panel. Members of advisory panels might include the company’s largest, most outspoken, most sophisticated, or most representative customers. GlaxoSmithKline sponsored an online community devoted to weight loss, where marketers felt they learned far more than they could have gleaned from focus groups on topics from packaging its weight-loss pill to where to place in-store marketing.13
- Take advantage of government-related data resources. The U.S. Census Bureau provides an in-depth look at the population swings, demographic groups, regional migrations, and changing family structure of the more than 311,591,917 people in the United States. Census marketer Nielsen Claritas SiteReports cross-references census figures with consumer surveys and its own grassroots research for clients such as The Weather Channel, BMW, and Sovereign Bank. SiteReports offers more than 50 reports and maps that help companies analyze markets, select site locations, and target customers effectively.14
- Purchase information from outside research firms and vendors. Well-known data suppliers like A.C. Nielsen Company and Information Resources Inc. collect information about product sales and consumer exposure to media; they also gather consumer-panel data. Attensity offers a suite of products to monitor customer conversations from a variety of social, online, and internal sources.15 NPD conducts its Kitchen Audit study every three years to determine what food ingredients U.S. households have on hand and what appliances, cookware, and utensils they own and to assess usage and sources of recipes.16
2. COLLECTING MARKETING INTELLIGENCE ON THE INTERNET
Online customer review boards, discussion forums, chat rooms, and blogs can distribute one customer’s experiences or evaluation to other potential buyers and, of course, to marketers seeking information. Here are five places to find competitors’ product strengths and weaknesses online.
- Independent customer goods and service review forums. Independent forums include Web sites such as Epinions.com, RateItAll.com, ConsumerReview.com, and Bizrate.com. Bizrate.com collects millions of consumer reviews of stores and products each year from two sources: its 1.3 million volunteer members and feedback from stores that allow Bizrate.com to collect it directly from customers as they buy.
- Distributor or sales agent feedback sites. Feedback sites offer positive and negative product or service reviews, but the stores or distributors have built the sites themselves. Amazon.com offers an interactive feedback opportunity through which buyers, readers, editors, and others can review all products on the site, especially books. Elance.com is an online professional services provider that allows contractors to describe their experience and level of satisfaction with subcontractors.
- Combo sites offering customer reviews and expert opinions. Combination sites are concentrated in financial services and high-tech products that require professional knowledge. ZDNet.com offers customer and expert evaluations of technology products based on ease of use, features, and stability.
- Customer complaint sites. Customer complaint forums are designed mainly for dissatisfied customers. PlanetFeedback.com allows customers to voice unfavorable experiences with specific companies.
- Public blogs.Tens of millions of blogs and social networks offer personal opinions, reviews, ratings, and recommendations on virtually any topic—and their numbers continue to grow. Nielsen’s BuzzMetrics analyzes blogs and social networks for insights into consumer sentiment and threats to the brand that may emerge online.17
Of course, companies can use many of these sources to monitor their own customers, products, services, and brands. Customer-service forums linked on a company’s home page are a very useful tool. Customers often respond faster and provide better answers to other customers than a company could.
3. COMMUNICATING AND ACTING ON MARKETING INTELLIGENCE
The competitive intelligence function works best when it is closely coordinated with the decision-making process. Given the speed of the Internet, it is important to act quickly on information gleaned online, as StubHub and Coca-Cola found:18
- When ticket broker StubHub detected criticism of its brand after confusion arose about refunds for a rain- delayed Yankees-Red Sox game, it quickly offered appropriate discounts and credits. The director of customer service observed, “This [episode] is a canary in a coal mine for us.”
- When its monitoring software spotted a Twitter post that went to 10,000 followers from an upset consumer who couldn’t redeem a prize from a MyCoke rewards program, Coke quickly posted an apology on his Twitter profile and offered to help resolve the situation. After the consumer got the prize, he changed his Twitter avatar to a photo of himself holding a Coke bottle.
Source: Kotler Philip T., Keller Kevin Lane (2015), Marketing Management, Pearson; 15th Edition.