As companies continually strive for success, their leaders are challenged with making marketing investment decisions such as which new geography markets to expand into and what new business verticals to compete in. The key to revenue growth is to identify demand that hasn’t been met in the competitive market place, and then create a new product (or sell an existing one) to that market.
A market gap analysis is a proactive decision tool, often used in the business to consumer space (B2C) that leaders can use to help identify and validate the potential for new market opportunities, current market penetration success capabilities and investment criteria for new product or service options. A market gap analysis can also help minimize risks associated with decisions that are made according to subjective opinion, or based on developer’s pride with regard to a particular product or service. In addition, the market gap analysis differs from traditional market research methods that use a percentage rule of market research method that can lead to overconfident perceptions of market demand and ultimately flattened sales. Unlike a market gap analysis, market research is a reactive approach to help companies understand how to position products and services, and sell and distribute products and services into existing markets where demand is already determined.
A market gap analysis can be helpful when your company needs to forecast and confirm demand for an existing product or service; seeks to impact a new vertical or industry; is deciding on whether to launch a new product or service; and/or is trying to determine investment needed to expand a department.
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