Market mapping is a market research strategy that helps a business measure the level of competition in a market with the help of a graph. It positions your competitors and their products/services on a graph by taking into account various important factors like reach, revenue, price, and quality, etc to find the gaps in the market.
What are the gaps in the market? How can market mapping help spot the gaps? And how can the gap help the business? This article will thoroughly answer all of your questions.
First, let us explain market mapping and a market map in simple words. Plotting your competition on a graph to thoroughly analyze their business strategies and find a missing spot that you can target is called market mapping. And the graph is called the market map.
Understanding Market Map
Here’s a general example of a graph we have created that will help you understand the concept better.
The image shows the comparison of the most common dimension (Quality-Price) amongst competing businesses/brands in the area. By reading the graph, you can understand that:
- The brand in red offers low-quality products/services at a low price
- Blue brand offers low-quality products/services at an average price
- The yellow brand offers average quality in average to low price range
- The green brand offers a little higher quality than the yellow one but it also charges more
- The pink brand offers average quality at high prices
Market Gaps
Do you notice the empty spaces in the graph? Those empty spaces are called market gaps.
How do Market Gaps Work?
Market gaps are basically the missing spaces that indicate the lack of something in the market. The gaps help you figure out what your competitors are missing. And by using that knowledge, you can craft a business plan or strategy to target that missing piece. Now, you know the basics of market mapping and how a market map helps a business spot a gap.
How do Gaps Help the Business?
Let’s explain it in detail by analyzing every gap present in the image.
1st Market Gap
As you can see, the first gap in the upper left corner indicates that the market is missing a business that offers high-quality goods at a low price. Now, you have spotted a gap in the market. But the question is, can you use that gap to grow your business?
Offering high-quality goods needs high-quality materials, machinery, and a lot of hard work, which in turn demands a higher price for the goods to be able to cover the costs of the production. Otherwise, instead of profit, your business will be turning into a loss.
So, the answer is NO. Since the first gap can’t help our business, let’s look at the second one.
2nd Market Gap
The second gap indicates the lack of low-quality goods sold at high prices. The question again is, can you use that gap to your advantage? Consider yourself the buyer instead of the seller. And now answer the question. Would you buy low-quality products while paying high prices while there is someone in the market who is offering the same quality goods at a low price? The second gap is also of no use to us. Let’s analyze the third gap.
3rd Market Gap
The third gap in the market shows that there is no one in the market offering high-quality products at a high price. Will people buy high-quality products at high prices? The ones who have the means definitely will. Because people tend to spend a little more to get high-quality goods instead of dealing with the hassle of repeatedly purchasing low-quality products at low prices.
How do Market Gaps Help a Business?
By analyzing all the gaps in the market, you can find what exactly the market lacks. And when you figure out what the market is lacking, you fill that specific gap that will make your services/products stand out from others. That means more sales and revenue along with a solid credible reputation of your business in the market.
How do you Make a Market Map?
To make a market map, you first need to mark your competitors. Then, you need to analyze their business strategies (including the products/services they are offering, the quality of the products/services, the price range, etc). And then, you need to decide the values you want to compare. Once you’ve all the information, you need to write down the details on a graph.
The comparison can be done based on various dimensions. Some of the most commonly used variables are:
Benefits of Market Mapping
The benefits of market mapping to your business/company are stated below:
- Analyzes competitors and their strategies
- Find the gaps in the market
- Estimate future market
- Detect new trends and movements
- Find potential partners or investors
- Avoid overly saturated markets
The Disadvantages of Market Mapping
- The gaps you find might not be of any value
- Market mapping doesn’t guarantee a successful business
- The complexity of market maps could be overwhelming in a saturated field
- It requires a lot of effort and time
Key Takeaways
Market mapping is used to analyze the competition in the market by using a graph called a market map. A market map offers a visual representation of the competitors and their products based on the dimensions you choose (Price, quality, reach, revenue, etc.). It helps find the strength and weaknesses of your competitors, which in turn helps figure out what the competition is lacking. Once you find that out, you target that specific finding to provide the consumers with a new option to choose from.
Market mapping can be useful to keep an eye on your competitors and their strategies but it doesn’t guarantee success and requires a lot of hard work.