In using market intelligence in business, one size does not fit all. This is particularly relevant when considering sourcing and utilization of market intelligence by multinational corporations in fast-changing and competitive economies such as those in Asia and Africa. These organizations are looking to see a strong return on their investments, but achieving such desired results can at times prove difficult. Multinational entities must consider significantly adjusting their products and operations, but what is truly missing is good market intelligence about these emerging markets.
Rensselaer associate professor and academic director of international relations at the Lally School of Management Murali Chari recently published his research on this topic, “Mastering the Market Intelligence Challenge,” with co-authors Kimberlee Luce (senior vice president at Boston Analytics) and Inder Thukral (CEO at Boston Analytics) in the Winter 2017 issue of the MIT Sloan Management Review.
The researchers point out that good market intelligence in emerging markets is essential for good decision making, understanding what the customer wants, and how likely alternative products will work and be economically viable, ultimately resulting in increased sales growth and profitability.
“Many multinational corporations correctly recognize the need to adapt their products and business models to succeed in the fast-growing emerging markets,” said Chari. “They often fail because they do not have the necessary market intelligence to make these adaptations.”
Many multinational corporations correctly recognize the need to adapt their products and business models to succeed in the fast-growing emerging markets. They often fail because they do not have the necessary market intelligence to make these adaptations.”—Chari
The study notes that confounding factors in emerging markets can make solid market intelligence tricky, such as large differences across geographic and income segments, heterogeneity of the market group, and rapid change of the markets themselves.
“Additionally, multinational organizations tend to set up the framework for market intelligence in emerging markets that is unable to adequately help them meet their sales and profitability goals,” explained Chari. “The market intelligence budget is set as a percentage of revenues in those emerging markets or ad hoc, they often centralize responsibility for market intelligence to the corporate office or delegate it to the emerging market operations, and the market intelligence is often updated on an ad hoc basis as opposed to regularly.”
The researchers offer several suggestions for obtaining good market intelligence in emerging markets:
- Use market intelligence as a strategic asset, updating and investing in it continuously for use in effective decision making.
- Organize market intelligence as a shared initiative between the corporate office and the emerging market operations unit.
- Use a variety of sources and methods to obtain market intelligence given the often unreliable or inconsistent data available in these changing markets.