How to Find Gaps in the Market for Your Business
Gaps in the Market | Finding the Niche Market for Your Business
If you analyze a specific market, you will realize that most businesses are alike. So, how do you stand out amidst the competition to gain control of the marker? Innovation is your answer.
In today’s world of ever-evolving consumer needs, it is crucial that you provide innovative products for your customers. Creating innovative products begins with finding gaps in the market, and it is a major contributing factor in cementing your long-term business success.
Gaps in the market exist when consumers have an unmet need. When a market gap exists, it provides an opportunity for a business to offer a new product or service that meets this unmet need. Ultimately, this enables expansion into an untapped market, where competition is scarce or nonexistent.
Market gaps generally fall into one of two main categories. First, a market gap can exist when a new product or technology must be developed to solve the unmet need. In the second case, a market gap exists when the product or service is available on the market, but it does not offer the price or performance advantage that customers desire.
How do you find a market gap?
In this article, we have assembled a seven-step guide on how to assess your customer needs so you can identify gaps in the market.
By discovering your customers’ unmet needs, you can develop an action plan for bringing a brand-new product or service to market.
Listen to Your Customers
When it comes to innovation, the best ideas will likely come from your customers. Identifying their problems and changing expectations can help you think of new ways to serve them. To understand your customers’ evolving needs, you can create a customer need assessment survey.
Some specific examples of questions you could ask in a customer need assessment survey include:
- What are the most important features our product is missing?
- If you could change one thing about our product, what would it be?
- What problem do you wish you could solve with one of our products?
Perform a SWOT Analysis
When looking for growth opportunities for your business, it helps to perform a SWOT analysis. A SWOT analysis considers your company’s strengths, weaknesses, opportunities, and threats.
Strengths. Knowing your business’s greatest strengths can help you identify your unique selling proposition (USP). Your UPS is something that you offer that your competitors can not; identifying your USP can help you fill a market gap.
Weaknesses. Look at negative customer reviews to see where there is room for improvement.
Opportunities. Think of ways to create a new product or improve on an existing product to serve an unmet consumer need. If the same weakness exists for both your company and your competitors, it could be an opportunity to fill a market gap.
Threats. When considering launching a new product or service, it is crucial to think about any obstacles to reaching your goals. Is another company currently developing the same product or technology?
Find a Niche Market
The next step in finding a market gap is to find a niche market whose unmet needs line-up with your business’s strengths. To find a niche market, you can start with an existing market and work at uncovering unmet needs within that market.
When looking for a niche market, it is crucial to think small. While it may be tempting to try to target as many consumers as you can, casting too wide a net will make you less relevant to your niche market. Why is this the case? Well, an overly broad marketing strategy is like selling a one-size-fits-all t-shirt. Sure, it means that anyone could be interested in wearing it. However, most people would prefer to buy a t-shirt that fits them perfectly. Targeting a niche market means creating a product that is the perfect fit for your customers.
When it comes to your target market, how niche is too niche? The ideal niche market must generate enough product demand to sustain business growth.
An ideal niche market will meet the following criteria:
High Demand. Before taking your product to market, it is necessary to evaluate the demand for your product with consumer surveys and other market research.
Many Existing Products. It’s a good sign if there are many other products available to the niche market you are targeting.
Large Customer Base. Conducting market research can help you identify how large your niche market is. You can use a combination of primary research (surveys) and secondary research (government records with demographic data) to pinpoint the size of your market.
Lack of Competition. While it is okay to have competitors selling other products to your niche market, it is vital that you offer a unique selling proposition – something that no other business is offering.
Use Competitors’ Work as a Foundation
Identifying your competitors’ strengths can help you determine what you could offer that they don’t. Conducting competitive research will allow you to ascertain what your unique selling point could be.
It is also crucial to identify your competitor’s weakness since this information can be used to target unserved markets. A great place to start is with online reviews. Focus on the negative reviews to see when your product has an opportunity to outperform your competitor.
To identify your competitor’s strengths and weaknesses, you can conduct a competitive research survey. Here are some specific examples of questions you could include in a competitive research survey:
- What makes you stay with [competitor’s name]?
- What product or service do you wish [competitor’s name] could provide?
- Why would you leave [competitor’s name] for a new company?
Research Developing Trends
As the world changes, there is a shift in what goods and services are in the highest demand. With the constant stream of information available on the internet, societal trends are rapidly changing. To track emerging consumer needs, you must monitor changing consumer preferences, developing technologies, and shifting industrial and economic trends.
Consumer Preferences. Major local or global events and trending topics can shift the kind of products consumers desire. Think of ways that your product can merge with popular culture and global (or local) events that matter.
Technological Shifts. With the advent of new technology comes the opportunity to provide accessory products to make existing products even more useful.
Industry and Economic Shifts. What are the economic conditions like in your region? Is there a product or service consumers want but are unable to afford? How has your industry changes over the last year? Answering these questions can help you identify an emerging gap in the market.
When performing a gap analysis, watch for events and announcements that could trigger a demand for new products or services.
Here are some triggers you should watch for:
Patent Applications. Researching new technology patents can help you determine what associated products will be in demand in the future. Watching patent applications in your industry can also provide reassurance that someone else hasn’t beaten you to the market with your new product.
Pending Legalization. When local, state, or federal laws are changed, it opens a market gap to offer new products or services that will be in higher demand following legalization.
Research Studies. Set up notifications for new studies published within your industry. If a new area of research garners enough attention, it could lead consumers to demand a product that supports the research findings.
Census Information. Census data is crucially important to understanding social trends and problems. Furthermore, it can help you determine which areas to target with your marketing campaign when you launch your new product or service.
Plan Your Market Entry
If you have identified that your product serves an unmet customer need, it is crucial that you are quick to market. Many innovative products or technologies fail because they entered the market too late.
According to John Fitzgerald, chief executive of BRAVE, timing your market entry is the most vital step in launching an innovative product or service. “The earlier you spot a market gap, the easier it is to fill before anymore else gets there,” Fitzgerald says. “If you sit on your laurels, there’ s a risk your customers may become more demanding, or there may be new, cheaper, or more innovative competitors on the market.”
To plan your market entry strategy, you should begin with a marketing survey to assess customer readiness for your new product or service. Conducting market research will also allow you to discover the demographics of your target market and how consumers view you against your competitors, so you are ready to begin an aggressive advertising campaign as soon as your new product hits the market.
In conclusion, a market gap exists when there is an answer to an unmet consumer need. Identifying a gap in the market means discovering what your unique selling proposition (USP) could be, based on the current social and economic conditions. To perform a market gap analysis, start by listening to your customers and by performing a SWOT analysis to identify your potential USP. Next, conduct market research. As a final step, plan your market entry strategy early on.
If you have identified a market gap that your company can solve for, remember that time is of the essence. Waiting too long can mean missing out on your window for successful market entry. To avoid this product entry error, it is crucial that you identify market gaps early and that you identify the ideal window for your product launch date.
Need help identifying the gaps in the market for your business? Contact the experts at Lean Marketing today! Based out of Edmonton, Alberta, Lean Marketing is passionate about helping Canadian-based startups and businesses succeed, through data-driven, 360-degree marketing campaigns. Call or email us today!