Market research and competitive intelligence are connected by the fact that they are both strategic business tools. Both tools are employed by owners of businesses and other business analysts as a means of analyzing the professional environment. While market research is more centered on the analysis of the external business environment in relation to discovering areas of opportunity and improvement, competitive analysis is more concerned with the status and activity of competitors in a market in relation to its implications for a business.
The relationship between market research and competitive intelligence can be seen by an analysis of the two concepts. Market research involves a study of the business environment in which a business is operating, including factors like consumer trends, preferences, behavior, demographics and a study of other similar products on the market. The aim of market analysis is to obtain this information with a view to channeling it toward a more effective marketing strategy. For instance, if during the process of market research a sneaker manufacturer discovers that its main customers are young men between the ages of 12 and 28, it will concentrate its marketing efforts toward this demographic. The information will also allow it to think of marketing strategies that will allow it win with the older or younger demographic.
In the same sense, the analysis of the link between market research and competitive intelligence can be achieved by looking at the full scope of competitive intelligence. This involves the analysis of the actions and activities of the competitors with the aim of using the intelligence to make strategic business decisions. One important factor to note is that there is a thin line between competitive intelligence and industrial espionage, which is an illegal act in most countries and territories. Competitive intelligence can be gathered by analyzing the business strategy of the competition. This may include the analysis of their products, marketing strategy and business model.
The main difference between market research and competitive intelligence is the fact that competitive intelligence is a mostly practiced at the macroeconomic level while market research is practiced at the microeconomic level. Both complement each other as business strategy tools. They may also stand alone as a means for the development of business strategy, depending on the objective and circumstance. For instance, a business objective that is more concerned with the analysis of the consumer demographic is better suited to market research.
