Paul subscribes to an Internet service that alerts him whenever other firms in his industry are quoted in the media. Paul is using this type of market research primarily to
A. provide a link between him and his production center.
B. help him understand the needs of his customers.
C. monitor his competitors.
D. increase profits through the sale of syndicated data.
E. decide how to price his new products.
The correct answer and explanation is :
The correct answer is:
C. Monitor his competitors.
Explanation:
Paul’s subscription to an Internet service that alerts him whenever other firms in his industry are mentioned in the media is a form of competitive intelligence. This type of market research is primarily used to keep track of what competitors are doing, including their strategies, product launches, marketing efforts, and public perception.
Why is monitoring competitors important?
- Understanding Market Trends: By keeping track of competitors, Paul can identify shifts in the industry, such as new innovations, emerging consumer preferences, or regulatory changes.
- Identifying Strengths and Weaknesses: If a competitor receives positive media coverage, Paul can analyze what they are doing right and implement similar strategies. Conversely, if a competitor is facing negative publicity, Paul can avoid making the same mistakes.
- Adapting Marketing and Business Strategies: By knowing how competitors position themselves in the market, Paul can refine his own marketing strategies, pricing, and product offerings to stay competitive.
- Anticipating Future Moves: Media mentions often indicate new developments in a competitor’s business. By tracking these insights, Paul can predict upcoming changes and proactively adjust his business strategy.
Why Not the Other Options?
- A. Provide a link between him and his production center: This is unrelated to competitor monitoring; production centers deal with manufacturing and supply chain processes.
- B. Help him understand the needs of his customers: While competitive intelligence might offer some indirect insights into customer preferences, it is not the primary reason for subscribing to media alerts.
- D. Increase profits through the sale of syndicated data: Paul is consuming data for competitive insights, not selling data to others.
- E. Decide how to price his new products: While competitor insights may influence pricing decisions, the primary purpose of Paul’s subscription is monitoring competitors, not setting prices.