How Small Business Owners can Identify and Fill Market Gaps
A business is like a living thing in that it will grow to fill the limit of its environment. Once the business is serving its full market in a single area, it can either remain the same size, or expand. Franchising or opening a second location can open up new markets in other areas, allowing the brand to grow through increasing the size of the customer base that it is able to serve. Other ways that a business can grow include expanding services to fill a present need within their local customer base. These types of expansion can occur side by side, or they can take place one after the other. It will depend on the size of the un-captured market for the service on offer whether or not it is lucrative to expand services, as well as on how much market share can be captured with the introduction of the service to the business’s list of products. For this reason, before deciding on a course of expansion, business owners need to carefully review their data and conduct additional supporting market research.
Market gaps make themselves apparent when you gather customer feedback. One of the best ways to identify a gap in a market is to collect customer feedback regarding your processes and services, then review what is said in order to uncover commonalities. For example, a restaurant may serve a dish with a “special sauce”, and upon review of customer feedback, realize that there is a market for customers who would like to purchase a bottle in store to take home and use in their own cooking. Keeping an ear to customers is an essential part of planning positive growth. Businesses should never lose sight of the fact that it is their customers who will have the final say on how well they have anticipated their needs. Data gathering and acting on feedback is another reason why business owners can’t afford to neglect customer service within their organizations.
Businesses can plan to expand within their established channels. Another form of market gap that businesses can fill is a lack of product support in their local market. For example, a car dealership may sell cars, but the only repair shop that can install parts for the cars they sell may be a town or two away. It may be worth it to create the capability to sell both cars, replacement parts and install them in house in order to take advantage of the built in market presented by car owners in the area. Again, choosing to dramatically expand the amount of services offered by a business is only a strong move in the event that there is a market waiting to be served and there is a significant market share that can be expected to be won.
Photo Credit to Elliott Brown on Flickr