Gap Analysis
Market Deficiencies. "Gap" analysis involves analyzing current market offering to assess the extent to which they meet customer demands. Demand side gaps involve a market situation where consumers are not satisfied buying what is available?usually either because the level of service provided is not adequate or because the offering is too expensive. Supply side gaps, in contrast, involve firms that provide services that are needed, but ones that can be met elsewhere at lower prices.
Demand Side Gaps. Customer satisfaction abounds, and many consumers would like to replace their current suppliers. This can happen either generally?there is a widespread dissatisfaction with banks among consumers, and many would switch if they found one that they thought to provide better service?or the gap can be with one segment that is not being well served. As an example of the latter, consider parents who, if they had not had children, would have been perfectly satisfied with an ordinary Internet service provider but are now worried that their children can be exposed to inappropriate material online. Therefore, the PAX Network, which features family-oriented television programming, stepped in to offer a service that claims to block out most objectionable sites. Further, one auto parts store owned by a woman ran an advertising campaign aimed at women, acknowledging that women were often being asked by their husbands and boyfriends to be "parts runners." The ad then went on to talk about the cleanliness of the store and non-condescending attitudes of the sales people.
Note that although a gap may exist in the sense that existing firms are not offering what consumers may ideally want, there is a limit to what buyers would be willing to pay for. For example ...