Lets look at the normal scenario: Many markets are crowded (multiple sellers chasing same customers) - this competition lowers profitability - Market gaps (a new product or sector of the market offer enticing prospect of health profitability - But does the gap contain enough business to generate profit? - A gap in the market is identified but is there a market in this gap.
Finding a space in the market that is unchallenged by competition is the Holy Grail of positioning strategy. Unfortunately these space know as market gaps are often illusive and the benefits of finding one are often equally illusory.
Unoccupied market territory can present major opportunities for companies, but the challenge lies in identifying which gaps are profitable and which are traps.
Lets look at an example of Snapple and how they found a sustainable niche.
Slogan - 100% Natural
USP - Snack drink
Customer segment - Students, commuters and lunch time office workers
Channels - Distribution through small inner city stores and go and grab stores.
Design - Small bottles designed to be consumed in one sitting.
Communication - Made from the best stuff on earth.
Launched in 1972, sold to Quaker Oats for 1.7 billion in 1994.
This is a good example of finding a sustainable and profitable niche where many companies failed in the ultra competitive market. Even Pepsi tried to capture a nonexistent market for morning cola with its short lived high caffeine drink.