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Jan 1, 2009 12:00 PM, By Rick Weber

We are in a market-driven economy. And in a market-driven economy, market intelligence is what matters most.

“Whoever has the best market intelligence wins,” said Stephen Latin-Kasper, market data and research director of the National Truck Equipment Association (NTEA), in his Market Research Seminar. “It's that simple. If you're out there running around with no information and your competition has lots of information that they built into a plan, who wins? The people with information organized in a way that makes sense to use.”

He said that to use the data, you have to define what you want to know about the market. Is the product new or used? Domestic or global?

“Define the size, not just in dollars but in units,” he said. “Dollars are not always comparable or easily comparable. You can get currency-exchange information, but you have to constantly think about what currency units you will put the market share in terms of. Units are much easier to work with. But in share, you usually want to work in terms of dollars, especially when you're putting it in terms of sales for a particular application market. You can't just do one or another. You have to do both.”

To determine the trend, he said, forecast not just how you expect your sales will go, but what's happening in terms of acquisitions, technology, and individual segments by size.

Latin-Kasper gave these tips:

• Segmentation.

  “What's the problem with defining your market share? You have to know everyone else's. Some of you are in a position where you have a small number of competitors in a niche market, where it could be relatively easy to determine your share, but most of you are not dealing with a situation like that.”

• Market-share calculations.

  “Identify your data sources. Don't let ownership or management not believe you. If you're responsible for bringing that market plan, you don't have time for guys who are supposed to be helping move that plan through the company argue about the numbers in that plan. Make sure everybody who is using that information understands the data source so there is no argument. And you need to understand the limitations of your sources. There is no such thing as a perfect database, but there are owners out there who think there is.

  “Move beyond market share. Believe it or not, there are companies that don't care about market share. You do have to move beyond that in terms of market planning. Don't get stressed out over it.”

• Identify indicators.

  “You want to know what's going on with the heavy-duty segment in North America? You should be paying attention to average primary vendors. If you're trying to explain to other people in your company how your performance compares to a larger industry you are a part of, you need some indicator to make a comparison of your sales to.”

• Index your sales to those indicators.

  “Make a graph. On a monthly basis, you will update what's going on in terms of your sales. Whatever industry you choose to compare your sales to is going to be there on the same graph. You take that graph and post it somewhere so relevant personnel can see a visual representation of what they're a part of. So everybody in the company is on board. It gives a monthly indicator of how we're doing. Which in the individual case is, ‘How am I doing? I play a role in making sales happen, from ordering materials to shipping out the back door.’ That answers the question, ‘Are we growing faster than the markets we serve?’ That question is way easier to answer than, ‘What is my market share?’ Relative to the rest of the industry, are we growing faster? If the answer is no, then you do have to start asking yourself, ‘What needs to change?’ If you don't even know where you are relative to the rest of the industry, you can't even answer the question.

  “You want to know as best you can where you rank in each segment in terms of application and product line. If you're not even in the top four, one of the questions you should ask is, ‘Should this company continue to offer this service?’ Ask yourself, if what you're doing in terms of trying to increase sales at a price that allows you to be profitable at a price ownership likes, are you knocking your head against the wall? The goal for all of us ultimately is that concept of profit. You don't have to be number four in the industry. You have to be number four in your segment of a particular application market. To do all of that, you have to rank all of your competitors.”

• Establish a file of all competitors.

  “Start with a blank yellow pad and start with the first product line you care about. For each product line, add a separate page. List a competitor and develop a file of all of your competitors. You have to keep up to date with what's going on with all of them to maintain the validity of those files. For a public corporation, this is very easy. For a private corporation, it's not. If there is no information available, do you scratch your head and say, ‘I can't do anything about it?’ You can always do something about it.