What is a market gap analysis?

A market gap analysis is what businesses use to identify a market which has more demand than supply. It can be performed externally or internally so your business can discover sales opportunities that you can eventually target if they align to your business goals and objectives. This analysis will help you look for under-serviced markets to help you formulate new ideas or products and services that you can sell. The results of a market gap analysis will also provide valuable information that you can use for business decision-making rather than relying on opinions that will lead you to illogical choices.

What makes a market gap analysis different from market research is that it is a proactive strategy. The kind of companies that usually use this analysis are B2C (business to consumer). They take the chance to research different categories such as service-based, product-based, geographic, and resource-based.

A good example of service-based analysis is when you think that there are many too pets in the city but there are fewer businesses that do pet care services.

Think of the time when there were no sellers offering phone cases that can be a wallet at the same time. That’s a product-based market.

If there is no business selling your products in the northern part of the country, you can use that idea during your geographic market gap analysis.

A resource-based analysis is when you use your business resource to come up with a more innovative way to offer products and services to the market. For example, Uber Eats.

When can you perform a market gap analysis?

A market gap analysis can be executed anytime. However, first it’s better to assess your needs so you can still be effective and efficient when performing the analysis. Just because you have all the time to do it, you will spend your time and money on it.

You have to come up with a strategy first through strategic planning. Strategic planning is a good process that will help your business establish a strategy that will serve as your guide to achieving the goals and objectives you have for your company. Your market gap analysis can form part of your strategic planning and with its help, you can find the gap issues so you can come up with better alternatives that are ideal for the situation. With planning and gap analysis, you can even adjust the processes within your company so it can match the strategy you are planning to use.

A market gap analysis is best done when your team is trying to come up with new ways to supply something to the market. If you think you need more sources of income and you need to have higher revenue, you can choose from the categories mentioned above. Whether you are a small or large business, you should take advantage of this tool. One way or another, you need to gather information and facts to grow your business in the future.