What are market gaps, and how to find them?
Is your business’s accounting and financial performance stagnating in the face of ubiquitous competition and new market entrants? Is it always more difficult for you to stand out and increase profitability? In general, the main reason why businesses fail is that there is not enough need for your product or service. To create an effective business strategy, you must first identify market gaps.
In this article, we show you the market gaps, how to spot a gap and implement this info in your business growth strategy.
What are market gaps, and how hot to spot them?
Market gaps are simply the customers’ needs that haven’t yet been met with appropriate products or services. A gap can be an entry of a new product or service or something that needs improvements or needs to be presented to a new group of customers.
There are many options to enter new markets and launch a new business. But the most important thing in your business plan is identifying market gaps. How to do that? You need to conduct market research to find new business opportunities and market gaps. There are several crucial steps for finding a gap.
Use market research to find market gaps and determine market trends.
If you want to be successful with a business idea, then developing a market analysis is essential. A well-founded marketing market analysis is the basis for developing a strategy and concrete marketing measures.
Other reasons to perform a market analysis:
- With a market analysis, you can support your business idea with figures, data, and facts and thus be convinced with your business plan.
- You can quickly recognize market potential and avoid making the wrong decisions.
- A marketing market analysis shows which competing products are already on the market.
- You can identify market gaps and find the products and services that haven’t been present on the market, but customers show an interest in them.
- Through market analysis, you can identify the barrier to market entry and estimate market attractiveness.
We do not launch an activity or create a company before knowing if what we have to offer meets consumer demand. The success of a business largely depends on the successful meeting of supply and market demand. For an entrepreneur, this involves understanding the target market they are addressing.
Market research is analyzing the market to verify that what you want to sell will likely meet demand and, if so, to what extent. Market research is used to obtain an estimate of the commercial potential of a business idea.
You can conduct market research in the business creation phase to verify demand for the product/service you wish to put on the market (and therefore limit the risks). Or during the launch phase of a new product to validate its commercial potential.
How to find market gaps?
How to succeed in launching activity in a saturated market with limited growth prospects?
Here are some avenues to explore and some of the best strategies for finding new business opportunities in saturated markets.
Imitate overseas business
This is an excellent trick to find your untapped service or product. Search for successful businesses and startups in Asia, Europe, US. Explore their business models and the way they market their products. You will surely find some undiscovered and interesting ideas to incorporate into your business.
Research niche markets
In general, you don’t need to find a completely new and revolutionizing industry or product to propel the business. You only need to research the existing niche markets to find underserved customers.
And from then on, you will need to figure out how to serve them better and differently. Also, look for different sectors and niches with new products, identify what they did differently, and replicate their model.
Conduct a social media survey.
We talk a lot about products, services, and companies on social networks, for good or bad. These comments are indicative of what customers want. That said, some technical knowledge is required to perform effective market analysis on social networks.
But nothing prevents you from reading arbitrarily what is said about your segment and, possibly, about your competitors. Not to mention, however, that social media only represents a part of consumers. Combine this approach with additional studies.
Market segmentation
Maybe you are not familiar with this concept, but it’s primordial for identifying market gaps and finding new business opportunities. Also, it helps in enhancing the potential and reach of existing products and services. Business models that rely on market segmentation models in their market analysis have better odds of success.
Knowing the extent of its market, identifying the different types of consumers, and having a precise idea of their motivations and their consumption behavior is enough for the company to respond effectively to the varied, even contradictory, demands of various consumer groups.
What questions should you answer?
Carrying out a market analysis is one thing, but you still need to know which questions need to be answered. Here are a few suggestions to get started:
- Who are my clients/customers?
- Where to approach them?
- What are they looking for?
- Is the market I want to enter growing or shrinking?
- Who are my competitors, and how are they doing?
- What do they do for my potential customers, and how do they react?
- Why do customers choose these competitors?
- Are customers looking for quality or a better price?
Maslow hierarchy of needs can help you find market gaps.
Maslow is a famous psychologist that came up with the concept of five basic types of needs every human needs to satisfy. The concept was implemented in business and the market and gave amazing results. What is it all about? This hierarchy of needs nevertheless offers a synthetic vision of human needs and, consequently, of consumer needs. We will list these five needs types, from the most necessary to the most dispensable.
- Physiological needs
- Security and safety needs
- Belonging and love
- Esteem needs
- Self-fulfillment needs
By being aware of the different types of needs, particularly by distinguishing between generic and derived needs, the entrepreneur can precisely identify the segments.
It should be noted that the more a need is dispensable, the less the offer meets this target consumer need. On the other hand, it will have the advantage of meeting the need precisely. Conversely, an offer aimed at a more generic need targets a larger number of consumers but risks being drowned among a multitude of offers already seeking to meet this need.
Identify customer needs
To boost your business and product development, you can conduct a satisfaction survey with your customers or even sound out the opportunity to launch a new range of products.
It is now very easy and free. Many tools allow you to design tailor-made online questionnaires to collect valuable data on your customers’ expectations.
It is then up to you to analyze them in order to validate your intuitions and launch or not the new offer envisaged to develop your business.
Deploy a “blue ocean” strategy.
To revive your business, implementing a “blue ocean” strategy can sometimes be very useful to position yourself in new growth markets. Based on an analysis of the greatest strategic successes of recent years, it aims to:
- Allow you to move away from markets deemed to be crowded and hyper-competitive, with limited growth prospects,
- Seek more prosperous markets while avoiding direct confrontation with other competitors through a differentiation strategy.
Conversely, if your offer evolves in a red ocean-type environment, it will be difficult to gain market share with reduced growth prospects and fierce competition. It’s never too late to change course!
Observe your competitors
List your direct (or indirect) competitors and do a competitive advantage analysis. Visit their site and their social media profile and see how they do it. Your outside gaze should normally quickly spot their strengths and weaknesses and how customers react to them. With a little luck, you will also find annual reports that will tell you about the products or services that appeal to customers.
New customers retention
You manage to retain your customers, but your business needs a new impetus. Here are some tips for getting back on the path to growth and winning new customers:
- expand your product range,
- adapt your distribution channels,
- develop a franchise network,
- adapt to today’s market, your customer’s expectations are constantly changing,
- develop strategic partnerships.
The benefits of identifying a gap and of a good targeting
Good identification of market gaps helps you find new opportunities in business. You will find untapped services and products that enable you to avoid strong competition. However, without thorough market research, you cannot win on the market, no matter how much your product is promising.
Exploring customers, needs, and expectations, creating the buyer persona enables you to tailor your offer and market your business to various customers’ profiles.
You will be able to offer a product or service adapted to your customers’ needs at an acceptable price, choose the most relevant distribution network to reach your target, and communicate more effectively. This will then make it possible to make detailed, realistic financial projections concerning its financing capacity and assess the expected return on investment.
Market gaps – FAQ
What are market gaps?
Market gaps are simply the customers’ needs that haven’t yet been met with appropriate products or services. A gap can be an entry of a new product or service or something that needs improvements or needs to be presented to a new group of customers.
How to spot market gaps?
You need to conduct market research to find new business opportunities and market gaps. There are several crucial steps for finding a gap.Imitate overseas business, research niche markets, conduct social media surveys, and conduct market segmentation.
What are some gaps in business?
A gap in the market is a group of customers whose needs are not currently being met.A gap in the market has one of the following attributes: it’s something completely new, something that already exists, but it could be improved;or it’s an existing product that could appeal to a new untapped market.
How to find new innovation gaps?
If you want to be successful with a new business idea, then developing a market analysis is essential. A well-founded marketing market analysis is the basis for developing a strategy and concrete marketing measures.
Where are the gaps in the market right now?
Gaps in the market are big in the health and wellbeing sector. Also, there are significant gaps in the market for products and services based on data analysis.
Is market segmentation important for spotting the market gaps?
It’s identifying market gaps, conducting market segmentation goes hand in hand when finding new business opportunities. Market segmentation is a business strategy consisting of selection groups of consumers that are identified so that certain product lines or services can be presented to them in a way that appeals to their interests.
