Small Firms Must Exploit Gaps in the Market

In a recession, the temptation is to sit tight, keep costs down and focus on your core market, but small firms should not be deterred from exploiting potential gaps in their sector, according to marketing experts.

Common wisdom might suggest that a recession is not the best time to launch a new product or service, but small firms with a strong idea and a clear grasp of what their customers want could do well by branching out, says Andrew Gerrard, managing director of InTouch marketing and expert contributor to Marketing Donut, the new marketing website for small businesses.

“Just because there is a downturn doesn’t mean that no one is buying,” says Gerrard. “It’s a question of assessing your market, identifying consumer demand and trying to match it. You might decide that now is the time to launch a value range, for example, or a more affordable version of a premium product you currently offer.”

The key to success, he stresses, is thorough planning and research. “In a tighter market, it’s likely that customers will evaluate a new product more critically, so they’ll only buy if the product or service really meets a need. So, don’t take any short cuts,” he warns. “Better thinking and more honest evaluation should mean longer term success.”

So how can businesses spot an opportunity? Gerrard suggests looking at which of your current products or services are either doing well or declining, and using customer feedback and complaints to identify new areas.

Assessing what competitors are doing and keeping an eye on new types of financial support, such as grants, can also help inspire a new direction.

Once you’ve got an idea, it is essential to evaluate how it might work, he says. “Talk to target customers, monitor reaction and don’t be afraid to make changes if necessary.

“You don’t want to find out that there is already something on offer which does the same job, or that it doesn’t in fact offer any benefits to the consumer or the price you need to charge doesn’t reflect the price customers are willing to pay,” explains Gerrard.

While launching a new product is never cheap, one advantage of the current downturn is that small firms should be able to negotiate good rates on advertising space and airtime. “It’s largely a buyer’s market, so firms should be able to get much better value out of their marketing budget,” says Gerrard.