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Feb 19 / heathgross

Market Research and Competitive Intelligence

The Two Heads of Janus

Competitive Intelligence vs. Market Research

Illustration by Cat Scott

There is no mistaking that Market Research and Competitive Intelligence are very different disciplines, yet they share the same end goal: providing reliable information to support the business decision making process. That is pretty much where the commonality ends.

At the risk of being accused of playing World of Warcraft or Dungeons and Dragons, I’d like to make a metaphorical reference to the Roman god, Janus, to illustrate a point. In Roman mythology there is a two-headed god named Janus that is said to be the God of gates, doors, doorways, beginnings, endings and time. The two heads of Janus face in opposite directions; one head looks backward in time, while the other looks forward.

In many ways, Market Research and Competitive Intelligence are like the two heads of Janus.

Market Research gathers information by surveying lots of people, usually customers, in order to gather their opinion and insights on certain topics. Once the survey is complete, analysts apply various tools and techniques to extrapolate the data and postulate on its meaning. Market Research is useful for determining common opinions and identifying market trends. Market Research is built on historical data; looking to the past in order to gain insight to the future.

Competitive Intelligence, on the other hand, is not about talking to lots of people, it is about talking to the right people. When conducting Competitive Intelligence, if three reliable sources give you the same answer to a question, then the intelligence is considered triangulated and the analyst moves on to the next question. While Market Research generally focuses on customers, Competitive Intelligence focuses on key stakeholders and influencers. Because it involves talking directly to individuals that will shape the industry, Competitive Intelligence is predictive. Competitive Intelligence represents the head of Janus that looks into the future.

Combined, Market Research and Competitive Intelligence, like Janus, provide both a historical and predictive view.

An Example

A while back my Competitive Intelligence firm had a client that commissioned us to conduct a Competitive Intelligence study examining the tuberculosis (TB) vaccine market. The TB vaccine currently being used around the world was developed over 50 years ago and is not very effective. The market for TB is estimated to be somewhere between $500M to $1B annually. Before hiring us, the client had completed a Market Research study that surveyed over a hundred medical personnel in order to determine unmet needs and gain insight into what experts believed would be the future TB treatment paradigm. The research was extremely helpful in painting a picture of where the market was then and what was needed for the future.

Our job was to conduct Competitive Intelligence in order to determine what our client’s competitors were developing. We conducted Competitive Intelligence on over a dozen companies developing TB vaccines and were able to construct a comprehensive competitive landscape that included detailed product profiles, clinical trial intelligence, and anticipated launch dates. The intelligence came directly from stakeholders with firsthand knowledge, ensuring the predictive reliability of our findings.

The results of the Market Research report and the Competitive Intelligence study provided the client with a complete view of the market. Often times businesses feel they need to choose either Market Research or Competitive Intelligence to support their decision making, however in many cases there is real value in using BOTH.

The Same End Goal

Generally, companies use Competitive Intelligence and Market Research to support many of the same business decisions. Let’s look at a few examples:

Messaging

Market Research tends to focus on what customers think about a product. This focus is important because it will support the company’s marketing strategy and messaging. Similarly, Competitive Intelligence can focus on a competitor’s positioning and messaging, enabling companies to develop counter-messaging and sell-against strategies.

Product Development

Market Research can be used to gain insight into what customers want and what their unmet needs are. Using this information, companies can improve existing products or develop new products that fill a market void. Competitive Intelligence can be leveraged to help companies understand their competitors’ R&D strategies, product development pipelines and technology roadmaps. Combined, the two disciplines provide a comprehensive view of what customers need and what is being done to address those needs.

Pricing

Market Research is often used to help set prices for products and services, providing insight into what customers consider acceptable. Competitive Intelligence can provide detailed information on competitor pricing strategies, discount strategies, rebates, etc. Knowing how your competitor is pricing their products and services is a distinct advantage as you formulate your own pricing strategy.

As you can see from these three examples, Market Research and Competitive Intelligence can be used in combination in order to build a more complete view of the market. Like Janus, the two disciplines provide a view of the past and future, enabling businesses to build strategies based on both hindsight and foresight.

Limitations of Market Research & Competitive Intelligence

Market Research is excellent for gathering large volumes of quantitative and qualitative data which can then be analyzed in order to form a picture of the past and current market. Applying trend analysis, Market Research can give clues as to where the market is headed. The limitation of Market Research is that while it is very effective at communicating the current state of the market, it is less effective for providing insight into the future market.

Competitive Intelligence is more suited to providing a truly predictive view of the market. By talking directly to competitors, suppliers, regulators and even customers, Competitive Intelligence is able to provide insight into what the groups are actually planning to do, rather than relying on predictions based on historical data. One limitation of Competitive Intelligence is that the sample size is generally too small to be considered “statistically significant”, which means that while the information is very useful in determining the specific actions of a company, it not effective for determining group opinion.

Market Intelligence: The Hybrid Alternative

An additional research option is Market Intelligence. I won’t go into detail here (look for a follow-up post later) but suffice it to say market intelligence blends the larger sample sizes traditionally seen in Market Research, with many of the benefits of Competitive Intelligence. Market intelligence is very useful for supporting activities such Voice of Customer and Industry Landscape studies; combining the detailed, granular intelligence produced through Competitive Intelligence interviewing techniques with the larger sample sizes used in Market Research.

One of the things I like about the Janus metaphor is that Janus is the god of gates and doorways. Janus stands in the doorway looking at the past and future, similarly it could be said that Market Research and Competitive Intelligence stand at the gateway of market success.

Leveraging Competitive Intelligence and Market Research enables us, like Janus, to position ourselves at the market threshold, looking backward in time (historical data) and forward in time (predictive intelligence) simultaneously. One cannot overstate the value that such a perspective could have in developing a strategy for your product or your company.

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2 responses to “Market Research and Competitive Intelligence”

  1. I wanted to thank you for this great read!! I definitely enjoyed every little bit of it. I have you bookmarked your site to check out the new stuff you post. Regards, Alex

  2. Heath Gross says:

    Alex,

    Thank you for your kind words, I am glad to know that the post was helpful. Also, thanks for following my blog, it helps give me that extra little motivation to keep the content new and fresh. By the way, to stay even more up to date you can also sign up to follow us on Twitter!

    Best,
    Heath

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