Marketing Intelligence Report - Essay Example

? Marketing Intelligence Report (17.01.12) Introduction In order to provide decision makers with the appropriate marketing intelligence, it is essential to carefully select and apply a variety of tools and techniques, and then to suitably analyse and interpret the information. To ensure organisations are competitively and customer focused, it is imperative that they fully understand the information that is required for analysis. They should devise suitable plans and choose appropriate methods in order to gain high quality marketing information to analyse and evaluate. To this end, the process of Marketing Intelligence is essential. This paper will identify appropriate marketing intelligence requirements for business decision-making that are required to design, plan and implement a marketing intelligence programme. This will be done by focusing on how quantitative and qualitative information can be interpreted and coherently presented with the appropriate intelligence that leads to effective marketing and business decisions. The process, quality and outcomes of a marketing intelligence project will be evaluated to substantiate the report. The paper will examine the marketing intelligence issues relative to financial institutions in the UK. The Marketing Concept and Marketing Intelligence Marketing is the procedure through which an organization plans and executes the creation, promotion, pricing and distribution of goods and services to sell and create satisfaction for consumers and to meet organizational objectives. It is thus required for the organization to focus on consumers in order to understand their needs and to make them satisfied in the shortest possible time and in the most efficient ways that prove to be beneficial for both consumers and the organization. This implies that any organization has to get involved in gathering information relative to consumer needs and collect marketing intelligence in order to efficiently meet the given needs. Marketing research is a crucial element of marketing intelligence and helps in improving the management’s decision making process through the availability of timely, specific and authentic information. All decisions taken by the management create specific needs for information without which the pertinent strategies cannot be developed. In the context of financial institutions in the UK, market intelligence implies the ability of the institution to collect market information in objective and systematic ways and to effectively analyze and interpret the same. This information should be applied in the right context to come up with strategic proposals and action strategies. The application of the information in the right context is the element that differentiates marketing intelligence from market research. It essentially refers to the aspect of information gathering relative to the wider market intelligence processes. A market intelligent financial institution has the ability to ascertain the kind of efficient marketing research tools that are most applicable to resolve its current problems. It implements the most efficient strategies in ensuring outcomes that are reliable and of high quality. Eventually, such institutions are able to incorporate the outcomes of the research to develop efficient strategies (Kim and Mauborgne, 2004 ). The process of gathering marketing intelligence The process of gathering marketing intelligence for financial institutions is characterized with a gap in terms of tools that enhance their operations. In most cases, the research outcomes are not fully scattered across the entire institution, which prevents them from being effectively included in the business operations. Mostly, marketing research is an isolated effort that does not allow the results to be acted upon effectively. In addressing this issue, it is important to develop a systematic strategy that takes the institution through the complete procedure of marketing activities from designing to implementing and applying. The institution should determine the objectives and motivations of the market research by involving in internal discussions as well as secondary market research activities. In this stage, the most crucial information is collected through staff involvement in order to get a true picture of competitors, client aspirations, the efficiency of different procedures and hurdles. The market intelligence team should conduct interview of top management in order to recognize their perceptions about the given problems and their visualisation of the institution. On the basis of the collected information, a team is made to look into different areas of the financial institution so that parameters are devised and budget approved. At this point a team leader takes charge and he becomes responsible for the complete project (Harrison and Cupman, 2012). The study has to be designed in terms of defining the methodology; whether it is quantitative, qualitative or a combination of both. The technique has to be decided so that the involvement of interviews, focus groups and mystery shoppers is finalized. The sample population has to be decided in terms of the number of people that will be investigated. An important aspect is to decide the extent to which the market intelligence will be outsourced to external marketing agencies. The technical capability of the financial institution has to be assessed because badly designed sample populations or a poor methodology will render the results to become ineffective (First Resource, 2009). The next stage is to implement the market intelligence activities, which also includes coordinating logistics and developing the methodology through options such as survey, focus groups and participation. Much depends upon whether the exercise is focused on qualitative or quantitative techniques and the extent of efforts and budgetary allocations for the project. The main hurdles will pertain to operational and logistical aspects of implementing the process such as ascertaining the presence of the sample population. Thereafter, the market intelligence outcomes have to be digested and synthesized to ascertain the operational and strategic impacts, which in turn will be recognized as the main elements of the action plan. At this stage, the process will continue into becoming a broad and multi-functional action plan that focuses on analyzing and interpreting the results. During this process, it is very important that the front line commercial staff as well as internal operations staff take active part in the action plans. Top management has to take active part in this stage in order to have approvals in prioritizing the implementation of the plans. The process of gathering market intelligence comprises of systematic actions from defining the research goals to implementing action plans on the basis of carrying out a procedural examination of the outcomes. This is important because the results are bifurcated into clearly defined actions and realistic missions. The planning process and the follow up actions are crucial elements of the process of market intelligence. In order to implement these actions, financial institutions have to adopt practical techniques such as check lists, surveys, work sheets, recruitment letters to take part in sample surveys and terms of reference to evaluate the results effectively. These tools have been effectively applied in financial institutions in the UK as well as other nations. The market intelligence process is better understood through the following diagram: Diagram I: Market Intelligence Process in a Financial Institution Phase I: Definition & Preparation Phase II: Design & Planning Phase III: Implementation Phase IV: Analysis & Integration • Establish the market research focus • Gather information from secondary sources and internal primary research • Analyze information & refine market research focus • Prepare proposal and define team • Determine the method (quantitative vs. qualitative) • Choose the technique • Define the sample • Prepare the terms of reference • Evaluate proposals & select firm, if outsourcing • Develop the timeline and budget • Develop & test tools • Select & train facilitators/ interviewers • Coordinate logistics/ recruit participants • Implement focus groups/ surveys • Supervise/ monitor • Clean, codify, process, transcribe & tabulate results • Define conclusions • Define strategic & operational implications • Establish action plan with personnel (roles, responsibilities, timeline etc.) • Present plan to management • Define goals, follow up & monitoring plan Methodology This section provides an example of the intelligence undertaken by the Alpha Bank London Ltd in London. The bank wanted to increase its market share by getting involved in a thorough research to find effective ways of retaining current customers and reaching out to new clients. Another objective was to enhance savings amongst its clients. Alpha Bank London had come out with a number of new financial products and desired to conduct market intelligence to ascertain the areas that provided the maximum growth opportunities. The bank made use of market intelligence processes in attempts to define the actions it should take in order to expand its operations. The first stage was to use data mining techniques for analyzing the bank’s deposit products so as to get a clear picture of the prevailing problems. The process involved determining the relation amongst different product variables such as account balances, length of relationships and the numbers of products used by each client. This was done to ascertain the patterns of using different banking products. It was revealed that savings was strongly focused amongst rich individuals and most borrowers maintained low balance in their accounts. In branches where clients were not retained for long, it became known from staff interviews that clients did not remain for long with the bank because of poor customer service in terms of poor withdrawal facilities. Secondary market research indicated the following results: Diagram II: Market Research Results Alpha Bank London Ltd Motives - Justify growth assumptions and prioritize new areas for expansion - Refine existing products and potentially develop new ones - Address customer satisfaction, given the competitive nature of market - Explore potential of additional funding from deposit products Objectives - Reliable demand estimates - Understanding of competitive positioning of the institution - Measurement of customer satisfaction - Savings mobilization strategies by region - Product refinement and development Hypotheses - Untapped market opportunities exist - The institution has strong loyalty among its customers but is not generally well-known in the market - Savings dominated by commercial and savings banks and cooperatives - Customers are not well informed about the Institution’s offering The market research study was designed through tools such as designing samples, choosing different techniques and method matrix. In the next stage of the process the parameters for the research were defined, which included quantitative and qualitative techniques and the determination of how the research was to be conducted. Alpha Bank London Ltd used a combination of quantitative and qualitative techniques on the basis of required information and the extent of required accuracy. The research began with qualitative studies in view of the fact that there was minimal knowledge about client behaviours pertaining to lack of demand and drop-out rates. It was also used because there was no specific information on why clients chose to discontinue with their loans. In order to determine the patterns of savings, qualitative tools were used. This method also permitted the bank to know of the reasons as to why clients did not show much interest in some products. The options used in this regard were in-depth interviews, participation exercises and open focus groups. After the qualitative research was done, quantitative survey was held to confirm the preliminary results, particularly in regard to product findings that became evident in the focus groups. This was required to be done to ascertain the extent of interests in the markets and the possibilities of the usefulness of the new ideas. It was found that the institutions needed more specific information than what was possible with qualitative research. This would allow good investments for developing products and refining them further. The quantitative study led to more authentic and exhaustive information relative to positioning. The bias in this regard revealed that dominant participants could influence the discussions to take a particular direction and the moderator could sift away some of the ideas, though unintentionally on the basis of his personal perceptions. It is noteworthy that quantitative studies erase this bias and make possible objective analysis in identifying patterns and propensities instead of depending on the facilitator’s observations. Additionally, quantitative outcomes allow deeper analysis relative to positioning by analyzing the response levels of different market segments. The responses are much dependent on factors such as age, gender, institutional association and socio economic circumstances. For instance, some of the well recognized socio economic groups held they would not presently think of keeping deposits in financial institutions. However, majority amongst them said they did not make these decisions because of any negative image. These findings were important in creating convenience to develop new images. The interpretation of quantitative and qualitative information that leads to effective marketing and business decisions is presented in the following diagram: Diagram III: Qualitative and Quantitative Research Methods Method Matrix Qualitative Research Quantitative Research Objective In-depth understanding of consumers’ attitudes and behaviour Measure the extent of the attitudes Confidence Level Explorative, anecdotal Conclusive, with a specified degree of certainty Techniques Unstructured or semi-structured Structured Participants Small and homogeneous groups Samples with a statistical representation of the population Results Words and descriptions Codified results, compiled as statistics Training/ Preparation Understanding objectives of the study - Consistency and precision of questions used - Statistical analysis Strengths - In-depth exploration of questions - Better understanding of underlying behaviors - Usually can implement with staff - Consistency and precision of questions used - Conclusive; results can be inferred to the rest of the population - Better for costly investment, since it measures degree and frequency of behaviors Weaknesses - Subjective. Bias can be introduced in the execution and analysis of results - Not conclusive; the results cannot be inferred to the population - Potential for bias on the form and the questionnaire - Can be costly and time consuming - Usually implemented by an outside marketing research firm Analysis of Intelligence Outcomes Having carried out the methodology that allows availability of pertinent information and intelligence inputs, the financial institution will have to get down to implementing them in order to achieve organizational goals. This is the stage on which most organizations focus a great deal because instruments have to be designed, participants have to be recruited and interviewers and facilitators have to be trained. It is very important to supervise and monitor effectively in this stage in order to make sure that the desired quality is achieved and measures are being interpreted successfully. The most crucial decision pertains to deciding whether the intelligence activities will be limited to the organization or will be outsourced to an external agency. In terms of qualitative research, the most widely used process is using focus groups, especially in the exploratory phase because there is restricted understanding relative to the given topics or to sensitive matters that may not be felt comfortable to be discussed openly. In dealing with such matters such as remittance and money transfer, moderators utilize leaders of focus groups to identify issues and to manage the deliberations. Other practices in this regard are participation in research exercises that include reputable approaches in which the standards of discussion are provided for in advance. In order to implement quantitative research it is required to make qualitative investigation to ascertain the main reasons for client behaviours and to cultivate concepts and refine terminologies. Qualitative research makes available opinion and hypothesis that can impact decision making. Quantitative research utilizes statistical survey for measuring the extent and frequencies of the identified behaviours and questions related to market shares of institutions and extent of satisfaction from varied services, frequency of withdrawals and deposits, promotion awareness and the crucial issues for creating competitive positioning for the institution. Every topic is associated with a set of survey questions while managers make surprise checks and make random sample checks of participants in order to ensure quality control. The collected questionnaires are then processed and codified for examination. The research results have to be eventually analyzed to integrate them into the institution’s operations and strategies. In financial institutions, the outcomes are analyzed by a multi-functional team, which defines the plan of action in terms of time lines, responsibilities and roles that is placed before the top management. In keeping with the extent of investigations, departmental heads are involved in the discussions so that the management can establish goals and actions. For the management, the deepness of the strategic analysis and the overall standards of the presentation are very crucial for prioritizing the future action plans across the institution. Marketing intelligence has become a vital element to strengthen the financial institution’s brand and promotional strategies. Competitive positioning is important for branding and image building because deficiency in brand recognition creates a negative impact on demand for services and products. On the basis of marketing intelligence, financial institutions can make significant adjustments in their product portfolios. For instance, the Alpha Bank London Ltd decided to reduce its interest rates in order to provide greater flexibility relative to number of withdrawals and deposits (Frates and Shar, 2005). Conclusion The process of market intelligence actually extends further than market research because it focuses on creating the right questions that have to be asked to effect overall improvement in the organization. This process makes a slow start but moves vigorously from the research outcomes in terms of quick action and execution of plans. There are a number of major factors that determine efficient and result oriented implementation. The process has to be systematic in being carried out step by step without getting into a hurry. The institution has to provide committed resources in terms of budget, staff and team formation whereby momentum and quality is maintained under a strong leadership. The senior management must be in agreement with the process and take initiatives in providing for the required technical expertise. Such circumstances provide for efficient use of quantitative and qualitative tools whereby in house capability is built for interpreting and applying market information. This strategy allows for breaking down the complicated procedure so that it can be easily understood at different levels in the developmental process. This outcome focussed procedure facilitates the positive engagement of management and staff in the gathering of marketing intelligence because important issues are directly associated to them. The overall objective is to enhance consumer satisfactions, improve product design, increase the numbers of clients and deepen outreach and to compete effectively. In adopting such a process, financial institutions can effectively meet the prevailing challenges and achieve the required outcomes. References First Resource. 2009, Making Sense of Market Intelligence, http://www.1st-resource.com/White_Paper_12-04-09.pdf, Accessed on 17 January, 2012. Frates, Janice and Shar Seena. 2005. Using Business Intelligence to Discover New Market Opportunities, Journal of Competitive Intelligence and Management, Volume 3, Number 3. Harrison, Matthew and Cupman, Julia. 2012. White Paper: Using market intelligence and competitive intelligence to add value to your business, B2B International. Kim. W.C. and Mauborgne, R. (2004 ). Creating New Market Space, Harvard Business Review, http://www3.hbr.org/1999/01/creating-new-market-space/ar/1, Accessed on 17 january, 2012 Read More