A theoretical case-study based on primary research to demonstrate the CI role in developing a new market

Occasionally people ask about the proper spot for the CI team within the company`s structure tree. Some would say that CI is under the governing of the VP marketing, others would say that CI reports only to the CEO and you might hear a third opinion that says that CI is an independent team throughout the whole company.

Either way, I think we can all agree on two things regarding CI in a company: Its purpose is to gather information and produce insights into many of the functions within the company and, the process of CI as a whole is a profession.

When it comes to everyday practice, the CI team is often working side by side with Marketing and Sales alongside the CEO. They teach us in MBA classes about the role of marketing in a company and its missions. It is very clear to me that for Marketing, gaining credit for hard work requires a good CI team working close by.

The main difference between Marketing and CI, in my opinion, is the state of mind they are operating at. Marketing people always try to “push” products from the company to the buyers and the market while CI people try to “pull” information from the market, including the buyers. This DNA difference results in their different actions, especially when they both deal with the same problem as ‘please tell us how to enlarge our market share’.

One of the most interesting issues, for me, is the case when a company wishes to enter a new market, or to be more precise, to target new segments for its products. The CEO asks both Marketing and CI to research, analyze, produce insights, and recommend the best way to proceed.

They both have to deal with the same problem but each of them chooses a different angle to start solving it. Hopefully, the final result of their efforts would bring the full range of insights and actionable recommendations to the CEX table.

So for this article, I would like to discuss a case study that is possible although it is not real. There is a well-known company selling tires for all vehicles on a national scale. The company has large storage and it sells to many workshops where one can change flat tires.

The CEO lives in a countryside area and for some time now, something catches his eyes every time he goes out and drives his car. He noticed that the number of electric scooters is increasing daily and he realized that electric scooters have tires and they might encounter a puncture from time to time. His immediate instinct tells him that this phenomenon of e-scooters on the road is his next business adventure. He rushes to his office, summit both VP Marketing and the Head of CI team, and asks for a complete report on his desk in 2 weeks regarding his idea of a new e-scooter tires product line.

If the company works healthily, one should expect to see a joint meeting a few minutes after the managers leave the CEO`s office. At this meeting, the CI team, and the Marketing team should start with deriving basic assumptions about the new market, its characteristics, its volume, buyers segments, competitors, etc. Without agreeing on common ground assumptions, there would be a waste of time and sources.

I guess that in real life they would eventually agree on the followings for a start: There is a market for e-scooter tires, They do not know the market because they are focused on the vehicle tire market, The needs of e-scooter owners resemble the needs of car owners in the case of changing tires, The technology of e-scooters, especially the mechanics of the area of the tires, is new to the company. Also, buyers are different from the segments the company is used to approach so they have to identify the buyers and analyze their characteristics, Buyers can be approached in new marketing channels that they have to develop and establish, Competitors might have encountered the same issue and maybe they have already researched and came to conclusions about the relevancy of the market to them.

I figure they`d agree on these two more actionable assumptions: Look for the companies who sell e-scooters and find the potential buyers of the tires, Look for the new segment on different channels than the ones they know.

After setting the preliminary strategic assumptions as to their compass, each of the units decides on a framework in which research is done. I am not from the marketing area but I guess that marketing framework would include contacting the major companies who sell e-scooters, trying to get their buyers DB, thoughts of purchase, thoughts of joint ventures, looking for new marketing channels, and much more.

As for the CI team, there are many actions to take in a vast range of directions. And for the rest of this article, I would like to present a primary search I made for the last few weeks as if I was the CI person who got the mission. This is one of many possibilities to start looking for the relevant segment for the new market.

I decided to start my research in social media, especially in FB groups, although to be thorough I should have searched many other social media platforms. But for this article it is sufficient.

My first action was to join 15 FB groups dealing with e-scooters and was accepted as a member in 13 of them. The potential of buyers who could be exposed to my posts was 58,058. See Table 1.0 to a complete list of the groups.

My second action was to put on an engaging post. I have to say that it is authentic because it is something that happened to me lately. The post aimed at the engagement with the potential buyers and it ended with a poll containing 4 statements as shown in Table 2.0 below. Since some of the groups are Israelis I wrote in English as well in Hebrew, both in the same manner.

By this poll, I tried to gather preliminary information about 4 attributes of the buyers: skills, the perceived value of the workshop`s place, the perceived value of professional maintenance, and an indication for the buyers’ price flexibility.

The aggregate results of the poll across all groups are as shown in the table and graph below.

The results are based on a small sample (<60) of potential buyers after about a week of exposer to the poll. Nevertheless, this is my current data set and I have decided that it might be big enough to represent the segment (for the sake of this article). It is easily noticed that there is a high correlation between buyers’ skills, their preference for highly professional maintenance, and their willingness to pay a reasonable price to get a good service. The issue of place does not play a significant role here.

Based on these observations I might answer some of the questions we began with regarding the preliminary assumptions. There is a market, it is based on e-scooters owners, some of them do not know how to change tires by themselves and they are willing to pay up to 40$ for a change of flat tire and an overall maintenance service providing it is been done by a professional workshop.

If the CEO and VP Marketing decide to enter this market and approach this segment my advice would be to keep low costs for the buyers and emphasize the high profile of the company in the market, its professionality, and reputation.

But this is not all and it is not that simple because some of the group’s members chose to comment on the engaging post and the poll. Many of them chose to comment rather than react directly to the poll. Since there were many important comments they can not be ignored and I had to read them all and analyze the content so it would become a part of my data set and a base to the insights. I have to tell you that I was surprised by the richness of new information gathered in those comments. It has provided some missing pieces of information that could change the final recommendations to the CEO.

My new data set became wider and more comprehensive. It allowed me to update the first impression of the segment based only on the poll results. I have changed my understanding of the buyers’ skills and learned much more about substitutes for the regular tire, and about other web channels in which we can find this segment.

I found out that many of the e-scooter owners prefer self-maintenance. They know where to find sufficient information to learn and understand how to fix a flat tire by themselves they call for DIY solutions.

I also found out that many of the e-scooter owners buy specific kits for maintenance including tools for changing tires. Moreover, I learned that there are some pretty good substitutes for air-tires such as solid-tires that never get punctured and some tactic solutions such as tire sealant.

I understood that the micro-market of people who learned the practice of basic e-scooter maintenance and sell their services for everyone at a very reasonable price is flourishing.

Based on all this new information I felt compelled to change my insights and recommendations as follows: There is a market, it is based on e-scooters owners, some of them do not know how to change tires by themselves and many others have learned to do it by themselves. It seems that If the CEO and VP Marketing decide on entering the market anyway, my advice would be to focus only on wholesale customers in the manner of B2B and to consider developing a line of high-quality solid tires with special attributes in a low cost (as a mission for the R&D unit in the company), for solid-tires seems to be the future tires of light electric vehicles as a whole.

To conclude this article I would say this: To survive and thrive companies must always seek new markets and technology. In a healthy company, this mission is considered to be generic for all the employees especially Salesforce, Marketing, Media, Finance, Executives, and CI. The role of CI is to find information about as many aspects of the market, that helps decision-makers in the company to make the right decisions. The CI-Circle has moved from Competitors-Centric to Buyers-Centrics and that is very reasonable because the oxygen needed for the survival of the company comes firstly from the customers. Understand the customers and the rest will appear. In this article, I tried to demonstrate a theoretical case-study by limited primary research on FM groups and to prove that by concentrating on identifying the buyers first, we might understand a lot more about the whole market.

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