Page 24 - (DK) The Business Book
P. 24
22
THERE’S A GAP IN
THE MARKET, BUT
IS THERE A MARKET
IN THE GAP?
FINDING A PROFITABLE NICHE
inding a space in the
IN CONTEXT
Many markets are crowded, market that is unchallenged
with multiple sellers chasing F by competition is the Holy
FOCUS
the same customers. Grail of positioning strategy.
Positioning strategy
Unfortunately these spaces—
KEY DATES known as market gaps—are often
1950s and 60s Markets are illusive, and the benefits of finding
dominated by large companies one are often equally illusory.
offering mass-produced items, For these sellers, competition Although competition is a fact of
such as Coca-Cola. Choice is lowers profitability. life, it makes business difficult,
contributing to an ever-downward
limited, but the scope for
pressure on prices, ever-rising costs
products targeted at new
(such as the funding of new product
sectors of the market is high.
development and marketing), and an
1970s and 80s Markets incessant need to outmaneuver and
Market gaps—a new product or
become more segmented as outsmart rivals. In contrast, the
sector of the market—offer the
companys generate new benefits of finding a market gap—a
enticing prospect of healthy
products and market them profitability. small niche segment of a market that
toward narrower groups. is unfettered by competition—are
obvious: greater control over prices,
1990s and 2000s Companies
lower costs, and improved profits.
and brands position themselves The identification of a market
ever-more aggressively and gap, combined with a dose of
distinctively in the But does the gap contain entrepreneurial spirit, is often all
overcrowded marketplace. enough business that is needed to launch a new
to generate a profit?
2010s Finding and sustaining business. In 2006, Twitter founder
Jack Dorsey combined short-form
market niches is assisted by
communication with social media,
the promotional capabilities
providing a service that no one else
of the Internet, which allow
had spotted. Free to most users,
“one-to-one” marketing and There’s a gap in the revenue comes from companies who
customization of products. market, but is there a pay for promotional tweets and
market in the gap? profiles: Twitter earned advertising
revenues of $582 million in 2013.
