Market intelligence is the practice of gathering information about the market for a product or service to help an organization better plan its marketing tactics. It involves researching the available customer base to make predictions about how the product may perform in the future. Market intelligence also includes researching and developing means of increasing sales. It is a type of competitive intelligence.
The market is the collective name for all of the potential buyers for a product or service. Generally, market intelligence professionals look at the size of the market, when the market is likely to grow, and existing market models for each type of organization. Market intelligence can be performed before a product or service is offered for sale or after it is in production to promote continued distribution of the product.
The main goal of market intelligence is to improve the success of the product efficiently and at as low a cost as possible. Using market intelligence, a company can make an educated guess about how, when, and to whom they should try to sell their wares. It can also help a company decide where to place its advertisements. The cost of advertising can be high, so choosing an ineffective marketing medium can be an expensive mistake.
Types of market intelligence include internal and external intelligence. Internal intelligence is gathered by collecting, organizing, and analyzing information received by the company during its normal operations. Information analyzed when creating internal intelligence includes accounting sheets, sales sheets, and inventory analysis information.
Market analysts use data to predict what may happen in similar future situations. Collected data can be examined alone or compared with other types of data to determine causes of market trends or production mistakes and estimate what might happen in the future. An intelligence expert analyzing internal intelligence might use the sales and inventory data to predict future sales trends for the company. This data can be used to make early plans for necessary processes like promoting a product and scheduling production.
External intelligence is intelligence provided by outside analysts who evaluate the market in which a company performs. This type of intelligence can also include market intelligence from newspapers or articles from analysts who make predictions based upon their interpretations of market data results. A musician reading a music business column by an analyst in the music industry would be conducting research on external intelligence for his market. When determining media outlets for marketing, external intelligence is usually more relevant than internal intelligence for advertising decisions.