Market Research and Competitive Intelligence Priorities

Market Research and Competitive Intelligence Priorities 0 global survey results Share this survey on Twitter and Linkedin Co-Sponsor

INTRO CONTENTS Market Research and Competitive Intelligence Executive Summary Survey Overview and Distribution of Respondents 4 What is the Growth Team Membership? 5 Overarching Challenges 6 Key Market Research Challenges 7 Market Research Resource Trends Key Competitive Intelligence Challenges 7 4 Competitive Intelligence (CI) Resource Trends 5 Special Interest Topic: Supporting Stakeholder Decision Making 7 6 Respondent Demographics 4

Introduction Market Research and Competitive Intelligence (CI) Survey Executive Summary : Key Market Research Challenge KEY INTERNAL CHALLENGE Ensuring research insights are actionable and included in stakeholders decision-making KEY INTERNAL CHALLENGE ROOT CAUSE Lack of process reinforcement : Market Research Resource Trends BUDGETS R&D typically has an annual budget of less than $500,000* RESOURCES For 0, budgets and staffing levels will remain constant : Key Competitive Intelligence Challenges KEY INTERNAL CHALLENGE Developing, implementing, and monitoring counter-intelligence tactics KEY INTERNAL CHALLENGE ROOT CAUSE Inadequate skills 4: Competitive Intelligence (CI) Resource Trends BUDGETS R&D typically has an annual budget of less than $50,000* RESOURCES For 0, budgets and staffing levels will remain constant 5: Supporting Stakeholder Decision-Making PRIMARY INTERNAL CLIENT Sales/Business Development TOP ACTIVITY TO SUPPORT SALES Customer/consumer research TOP ACTIVITY TO SUPPORT EXECUTIVE MANAGEMENT SWOT analysis * All monetary values in this report are in US dollars ($USD).

Introduction 4 Survey Overview and Distribution of Respondents Survey Purpose Methodology Survey Population Co-Sponsor To understand the most pressing challenges shaping market research and competitive intelligence executives 0 planning Web-based survey platform Market research and competitive intelligence executives at manager level and above 9 survey respondents * respondents roles* Corporate 44% Business Unit/Division 7% Both Corporate and Business Unit/Division 9% Americas 5 Europe 7% Africa % Middle East 9% South Asia Asia-Pacific 4% * Percentages do not include respondents who answered Other or did not complete the question.

Introduction 5 What is the Growth Team Membership? GTM is a research and consulting program that supports executives within the functions that report to the CEO CEO s Growth Team GTM provides best practices, events, and services that enable executives to address challenges within their companies GTM: Creating Client Value R&D/ Innovation GTM s case-based best practices help executives: Marketing Corporate Strategy Investors/ Finance CEO Competitive Intelligence Competitive Intelligence Sales Leadership Corporate Development Market Research Market Research Speed the design and implementation of initiatives by not reinventing the wheel Save money and reduce risk by avoiding mistakes made by other companies Accelerate problem-solving with a cross industry perspective Improve their functions and companies performance and productivity GTMresearch@frost.com www.gtm.frost.com twitter.com/frost_gtm slideshare.net/frostandsullivan

Introduction 6 What s Keeping Market Research and Competitive Intelligence Executives Up at Night in 0? Market Research s Overarching Challenges Best Practice Solutions from GTM Ensuring Research Insights are Actionable Market Research must deliver actionable customer insights to drive the company s decision-making. Learn how BP s market research function used segment-based consumer insights to shape companywide marketing initiatives. Competitive Intelligence s Overarching Challenges Capturing Employees Competitive Information Competitive Intelligence needs to harness the competitive insights of its employees. Learn how Cintas developed a companywide intelligence network that incorporated employee insights into the company s decision making. Devising Effective Competitive Strategies Competitive Intelligence executives must continually assess the company s unique strengths, identify high growth market opportunities, and analyze potential responses to competitive threats. Learn how our Competitive Strategy toolkit helps you perform internal competency evaluation, market due diligence, and threat mitigation. Contact us at GTMResearch@frost.com.

7 INTRO Key Market Research Challenges 4 5 6

Section 8 Top Five Key Market Research Challenges CHALLENGE Ensuring research insights are actionable and included in stakeholders decision making Developing an integrated customer and market insights dashboard to support decision-making IN 0, respondents were concerned with providing valuable insights for strategic decision-makers. BY 0, respondents were focusing on demonstrating the ROI of market research. Creating an insight generation process that yields high-quality outputs 4 Integrating global, regional, and local customer/ market information to generate insights 5 Demonstrating the ROI of market research SURVEY QUESTION: What are the top five functional challenges shaping your market research plans?

Section 9 Respondents challenges are attributed to staff and process limitations Top Five Market Research Challenges Root Cause of Top Five Market Research Challenges CHALLENGE Ensuring research insights are actionable and included in stakeholders decision making Process: Lack of enforcement Developing an integrated customer and market insights dashboard to support decision-making Staff: Inadequate headcount Creating an insight generation process that yields high-quality outputs Process: Lack of process 4 Integrating global, regional, and local customer/market information to generate insights Staff: Inadequate headcount 5 Demonstrating the ROI of market research Process: Lack of enforcement Strategic Alignment: Insufficient support by senior management SURVEY QUESTION: Please indicate the root cause staff, process, technology/systems, or strategic alignment of your top five market research challenges.

Section 0 B-to-B respondents prioritize dashboards and future trends, while B-to-C respondents focus on portfolio balance and insight quality Top Five Market Research Challenges (By Business Model) CHALLENGE B-to-B B-to-C Engaging stakeholders to pinpoint their research needs Ensuring the research portfolio balance strategic and tactical projects Developing an integrated customer and market insights dashboard to support decision-making Ensuring research insights are actionable and included in stakeholders decision making Ensuring research insights are actionable and included in stakeholders decision making Creating an insight generation process that yields high-quality outputs 4 Demonstrating the ROI of market research Integrating global, regional, and local customer/ market information to generate insights 5 Identifying and prioritizing future trends/ Mega Trends Demonstrating the ROI of market research

INTRO Market Research Resource Trends 4 5 6

Section B-to-C market research departments have larger budgets than those in B-to-B companies 0 Market Research Budgets (By Business Model) 5 4 4% Median = $74,999 Average = $74,999 percentage of revenue dedicated to department budget (by business model) The median percentage of company revenue dedicated to the market research budget is: All companies = % B-to-B companies = % B-to-C companies = 0.9% 5% 6% % 9% Survey Question: What is your 0 total market research budget as a percentage of your company s total 0 revenue? % % 4% 6% 5% % 9% 7% 7% Below $50,000 $50,000 to $499,999 $500,000 to $999,999 $ Million to $.99 Million % % $ Million to $4.99 Million % % $5 Million to $9.99 Million % $0 Million to $9.99 Million % $0 Million or more All Companies B-to-B Companies B-to-C Companies SURVEY QUESTION: Which of the above ranges (in $USD) best describes your 0 total market research budget (all expenditures on market research activities and general & administrative including staff)?

Section B-to-C respondents put more emphasis on branding, pricing, and customer satisfaction research than their peers in B-to-B companies Market Research Portfolio Composition (By Business Model) % 8% market research s budget allocated to vendors (by business model) The median percentage of budget allocated to vendors is: All companies = 45% B-to-B companies = 7.5% B-to-C companies = 6 Survey Question: What percent of your 0 budget is allocated to vendors/suppliers? 8% 8% 5% 8% 8% 9% 8% 5% 5% % Market Size/Structure Product/Service Development and Testing Branding, Messaging, and Market Communications Customer/ Consumer Behavior (segmentation, attitudes, usage studies, etc.) % Pricing Research Customer Satisfaction/Market Tracking Business/Competitive Intelligence All Companies B-to-B Companies B-to-C Companies SURVEY QUESTION: How have you allocated your market research project portfolio across the above research categories?

Section 4 The majority of respondents expect staffing levels to remain constant in 0 Market Research Staffing Changes (By Business Model) 7 6 5 0 Average Rating =. 0 Average Rating =. 7 67% 54% 0 Average Rating =. RESPONDENTS expectations for additional staff has recovered after a sharp decline in 0. 4 8% market research staff (by business model) 5% The median number of staff is: All companies = employees, B-to-B companies = employees, B-to-C companies = 4.5 employees. % Survey Question: Approximately how many full-time employees are in your market research department? % % 5 Increase Substantially 4 Increase Moderately Stay the Same 6% 6% 8% Decrease Moderately Decrease Substantially All Companies B-to-B Companies B-to-C Companies SURVEY QUESTION: In comparison to 0, your 0 market research staffing will

Section 5 Most respondents expect budgets to remain static in 0 Market Research Budget Changes (By Business Model) 0 Average Rating =. 0 Average Rating =.4 0 Average Rating =.06 5 49% 47% 46% 4 9% EXPECTATIONS for additional funding have increased. % % % % 5% 4% 6% 5 Increase Substantially 4 Increase Moderately Stay the Same Decrease Moderately % % Decrease Substantially All Companies B-to-B Companies B-to-C Companies SURVEY QUESTION: In comparison to 0, your 0 market research budget will

Section 6 Most respondents rate their departments effectiveness as Average Market Research Effectiveness (By Business Model) 0 Average Rating =. 0 Average Rating =.74 7 69% 6 5 48% 4 4% 7% % 5% 4% % 8% % % 8% 4% 6% 5 Exceptional 4 Above Average Average Below Average Poor All Companies B-to-B Companies B-to-C Companies SURVEY QUESTION: How would you rate the performance or effectiveness of your function compared to others within your industry?

7 INTRO Key Competitive Intelligence Challenges 4 5 6

Section 8 Top Five Key Competitive Intelligence Challenges CHALLENGE Developing, implementing, and monitoring counter-intelligence tactics Packaging and communicating competitive data and insights to drive stakeholder decision-making FOR the previous two years, the top challenge was Aligning Key Intelligence Topics (KITs) to the company s strategic priorities. Capturing the competitive information held by your company s employees 4 Developing an integrated competitive insights dashboard to support decision-making 5 Conducting actionable win/loss analysis SURVEY QUESTION: What are the top five functional challenges shaping your competitive intelligence strategy?

Section 9 Respondents challenges are attributed to staff and process limitations Top Five Competitive Intelligence Challenges Root Cause of Top Five Competitive Intelligence Challenges CHALLENGE Developing, implementing, and monitoring counter-intelligence tactics Staff: Inadequate skills Packaging and communicating competitive data and insights to drive stakeholder decision-making Process: Lack of process Capturing the competitive information held by your company s employees Process: Lack of process 4 Developing an integrated competitive insights dashboard to support decision making Technology/Systems: Inadequate/outdated technology 5 Conducting actionable win/loss analysis Staff: Lack of experience SURVEY QUESTION: Please indicate the root cause staff, process, technology/systems, or strategic alignment of your top five competitive intelligence challenges.

Section 0 B-to-B respondents focus on dashboards and counter-intelligence tactics, while their B-to-C peers prioritize stakeholder needs and competitive alerts Top Five Competitive Intelligence Challenges (By Business Model) CHALLENGE B-to-B B-to-C Developing, implementing, and monitoring counter-intelligence tactics Packaging and communicating competitive data and insights to drive stakeholder decision-making Capturing the competitive information held by your company s employees Diagnosing stakeholders specific intelligence needs Packaging and communicating competitive data and insights to drive stakeholder decision-making Capturing the competitive information held by your company s employees 4 Developing an integrated competitive insights dashboard to support decision-making Creating effective and timely competitive alerts 5 Conducting actionable win/loss analysis Conducting actionable win/loss analysis

INTRO Competitive Intelligence (CI) Resource Trends 4 5 6

Section 4 The majority of CI departments have budgets that do not exceed $50,000 0 Competitive Intelligence Budgets (By Business Model) 7 6 6% Median = $5,000 Average = $9,500 6% 6 percentage of revenue dedicated to budget (by business model) The median percentage of company revenue dedicated to the CI budget is: All companies = %, B-to-B companies = %, B-to-C companies = %. Survey Question: What is your 0 total competitive intelligence budget as a percentage of your company s total 0 revenue? 5 4 percentage of budget allocated to vendors (by business model) The median percentage of budget allocated to vendors is: All companies =, B-to-B companies =, B-to-C companies = %. Survey Question: What percentage of your 0 budget is allocated to vendors/suppliers? 5% % % 9% % % 6% 7% Below $50,000 $50,000 to $499,999 $500,000 to $999,999 $ Million to $.99 Million % $ Million or more All Companies B-to-B Companies B-to-C Companies SURVEY QUESTION: Which of the above ranges (in $USD) best describes your 0 total competitive intelligence budget (all expenditures on competitive intelligence activities and general & administrative including staff)?

Section 4 The majority of respondents expect staffing levels to remain static Competitive Intelligence Staffing Changes (By Business Model) 7 6 0 Average Rating =. 0 Average Rating =.5 65% 65% 64% 0 Average Rating =. EXPECTATIONS for additional staff have declined over the past three years. 5 competitive intelligence staff (by business model) 4 9% 8% % The median number of employees in 0 is: All companies = employees B-to-B companies =.5 employees B-to-C companies =.5 employees Survey Question: Approximately how many full-time employees are in your competitive intelligence department? 4% 4% 6% 5 Increase Substantially 4 Increase Moderately Stay the Same 8% Decrease Moderately % % Decrease Substantially All Companies B-to-B Companies B-to-C Companies SURVEY QUESTION: In comparison to 0, your 0 competitive intelligence staffing will

Section 4 4 The majority of respondents expect little to no budget increase for 0 Competitive Intelligence Budget Changes 0 Average Rating =.8 0 Average Rating =.5 0 Average Rating =.08 7 69% 6 58% 5 4 5% RESPONDENTS forecasts for additional funding have declined over the past three years. 7% % 8% 8% 9% % % % 5 Increase Substantially 4 Increase Moderately Stay the Same Decrease Moderately Decrease Substantially All Companies B-to-B Companies B-to-C Companies SURVEY QUESTION: In comparison to 0, your 0 competitive intelligence budget will

Section 4 5 B-to-C respondents are twice as likely to rate their departments effectiveness as Average than their B-to-B peers Competitive Intelligence Effectiveness (By Business Model) 6 0 Average Rating =. 0 Average Rating =. 56% 5 4 8% 5% 7% % 9% % % 8% 9% 5 Exceptional 6% 4 Above Average Average Below Average % % Poor All Companies B-to-B Companies B-to-C Companies SURVEY QUESTION: How would you rate the performance or effectiveness of your function compared to others within your industry?

Section 4 6 Most CI departments report into Marketing Direct Line Report of Competitive Intelligence (By Business Model) 5 4 % 46% SINCE 0, the percentage of CI departments reporting into Marketing has decreased by, and the percentage reporting into Executive Management has doubled. 6% % 6% % 4% 6% 6% 7% % 7% Marketing Market Research Corporate Sales/Business R&D/Innovation Strategy/Planning Development and Product Development Executive Management (CEO/President/ General Manager) % % Other All Companies B-to-B Companies B-to-C Companies SURVEY QUESTION: To which department does your competitive intelligence function directly report?

7 INTRO 4 5 Special Interest Topic: Supporting Stakeholder Decision Making 6

Section 5 8 Sales/Business Development accounts for most of the B-to-B respondents research portfolio, while Marketing is the primary client for B-to-C respondents Top Three Clients (By Business Model) All Companies B-to-B Companies B-to-C Companies Sales/Business Development (67%) Sales/Business Development (78%) Marketing (74%) Marketing (66%) Corporate Strategy/Planning (5) Corporate Strategy/Planning (5) Corporate Strategy/Planning (65%) Marketing (6%) Sales/Business Development (47%) SURVEY QUESTION: Please identify your top three internal clients (in terms of the percentage of your research portfolio they account for).

Section 5 9 Market assessments are a critical activity conducted for Marketing Activities to Support Marketing (By Business Model) 67% (55%) Market Assessments Pricing Research 5 6% 78% Currently Conducting 6% Not Conducting * (59%) (58%) (6%) (6) (68%) (6) (6%) (6%) (67%) (68%) (67%) Branding, Messaging, and Marketing Communications Customer/Consumer Research Voice of the Customer 56% Customer Satisfaction and Loyalty Research measuring success The primary method used to measure impact on Marketing is: All companies = Customer Satisfaction or Net Promoter Scores (%) B-to-B companies = Customer Satisfaction or Net Promoter Scores (44%) B-to-C companies = Key Intelligence Topics (4%) Survey Question: What metric(s) do you use to measure the impact of your department s work for Marketing? (0) (8) (6) (4) () 4 6 8 0 All Companies B-to-B Companies B-to-C Companies * Percentages indicate the number of people not using this activity. SURVEY QUESTION: Which of the above activities does your department perform to support Marketing s decision-making (please check all that apply)?

Section 5 0 The majority of respondents do not conduct win/loss analysis for Sales Activities to Support Sales (By Business Model) 7 Customer/Consumer Research 69% Tools that Position Sales Against Specific Competitors (e.g., Battle Cards) 69% 6 6% 57% Currently Conducting Not Conducting * (69%) (57%) (59%) (6%) (59%) Sales Forecasts and Pipeline Analytics 54% Win/Loss Analysis measuring success The primary method used to measure impact on Sales is: All companies = Sales or Win/Loss Ratio (46%) B-to-B companies = Sales or Win/Loss Ratio (5) B-to-C companies = Forecast Accuracy (4) (79%) (75%) War-gaming Survey Question: What metric(s) do you use to measure the impact of your department s work for Sales? (85%) (0) (8) (6) (4) () 4 6 8 0 All Companies B-to-B Companies B-to-C Companies * Percentages indicate the number of people not using this activity. SURVEY QUESTION: Which of the above activities does your department perform to support Sales decision-making (please check all that apply)?

Section 5 SWOT analysis is the primary activity conducted for Executive Management Activities to Support Executive Management (By Business Model) 8 SWOT Analysis 8% 5% 8 Currently Conducting Customer/consumer segmentation 5 6 Not Conducting * (8) (76%) (87%) (6%) (6%) (6) Scenario planning Strategic Early Warning (SEW) measuring success The primary method used to measure impact on Executive Management is: All companies = Verbal feedback (9%) B-to-B companies = Key Intelligence Topics (8%) B-to-C companies = Verbal feedback (6) (84%) (8%) War-gaming Survey Question: What metric(s) do you use to measure the impact of your department s work for Executive Management? (87%) (0) (8) (6) (4) () 4 6 8 0 All Companies B-to-B Companies B-to-C Companies * Percentages indicate the number of people not using this activity. SURVEY QUESTION: Which of the above tools/methods do you use to support Executive Management s decision-making (please check all that apply)?

Section 5 SWOT analysis is the primary activity conducted for Corporate Strategy Activities to Support Corporate Strategy (By Business Model) 74% SWOT Analysis 78% Customer/Consumer Segmentation 5% 64% Currently Conducting (56%) 64% Not Conducting * (0) (6%) (58%) (7%) (84%) (78%) Scenario Planning Strategic Early Warning (SEW) measuring success The primary method used to measure impact on Corporate Strategy is: All companies = Sales (4) B-to-B companies = Sales (5) B-to-C companies = Key Intelligence Topics (5) (87%) (86%) War-gaming Survey Question: What metric(s) do you use to measure the impact of your department s work for Corporate Strategy? (86%) (0) (8) (6) (4) () 4 6 8 0 All Companies B-to-B Companies B-to-C Companies * Percentages indicate the number of people not using this activity. SURVEY QUESTION: Which of the above tools/methods do you use to support Corporate Strategy s decision-making (please check all that apply)?

Section 5 Most respondents provide front-end inputs (needs analysis and brand positioning) for Product Development Activities to Support Product Development (By Business Model) 86% Customer Needs Analysis 86% 57% 8% Currently Conducting Brand Positioning 5 67% (5%) (55%) Product Concept and Packaging Testing 5 Not Conducting * (68%) (54%) Post-launch Evaluations 67% (66%) (7%) (58%) Product Testing (0) (8) (6) (4) () 4 6 8 0 All Companies B-to-B Companies B-to-C Companies * Percentages indicate the number of people not using this activity. Note: The number of respondents who measure their support for product development, was not statistically significant enough for analysis. SURVEY QUESTION: Which of the above activities do you conduct to contribute to Product Development s decision-making (please check all that apply)?

4 INTRO 4 5 Respondent Demographics 6

Section 6 5 Respondent Demographics Enterprise Type Business Model Not for Profit Government/Public Sector 4% 6% Venture Capital % Hybrid % Most respondents are from Public companies. B-to-C Company (Indirect) 5% The majority of the respondents come from B-to-B companies. 46% Public Private 4% B-to-C Company (Direct) 8% 67% B-to-B Company N = 9 N = 87 Company Revenue 4 4% 5% 9% 7% 6% 9% Below $50 Million $50 Million to $99.99 Million $00 Million to $499.99 Million $500 Million to $999.99 Million $ Billion to $ Billion More than $ Billion N = 88 SURVEY QUESTION: Please indicate the type of enterprise, business model, and revenue that best represents your company.

Section 6 6 Respondent Demographics: Top Five Participating Industries 4 7% % 9% 8% Information and Communication Technologies Healthcare and Life Sciences Automotive and Transportation Chemicals, Materials, and Food Energy and Power Systems N = 85 SURVEY QUESTION: Please indicate which industry categories best describe your company (check all that apply).