what does “gap in market” mean?

goldengiirl: what does “gap in market” mean?
not talking about stocks. im talking about as in selling a product.

Answers and Views:

Answer by Lawrence C
A market is described as anywhere where goods or services are bought and sold. In practice we categorise, products or services into markets such as the washing machine market, toaster market, the medium saloon market, etc etc. There is a market for pretty much anything.

When someone says there is a gap in the market it means that there is a segment, or part of that market (take for example the toaster market) where the competitors are not catering for the customers needs. As a result of this if a company moves quickly to get a product offering to the market before anyone else then the financial rewards can be great as customers have to buy from you as there are no other products available to them. (noticing this gap in the market is often referred to as ‘spotting a gap in the market’)

In the example of the toaster market it may be that there is a social trend where people go crazy for really thickly sliced bread (like an inch thick). This would create problems for consumers when toasting as they would have to go back to using their oven grill which is inconvenient. The problem would be that the bread is way too thick to fit into a conventional toaster so if a company brought out a toaster that accommodated thick pieces of bread then they have filled that gap in the market. Their product may be adjustable so that thin and thick slices of bread can be toasted.

Anyway you get the idea it’s a fairly straightforward concept, hope that’s answered your question.