FINDING MARKETING GAP
 

 

 

 

 

 

 

 

 

 

 

 

For example, in the midst of continued concern about recession in 1998, the chairman of the Federal Reserve System, Alan Greenspan, decided to increase the money supply. To do so, the prime and short-term interest rates were decreased. For instance, the rate of interest on many 30-month certificates of deposit went down from 5.25 percent in 1997 to 4.75 percent in 1998. This increase led many depositors to choose other forms of investment over certificates of deposit. In the illustration discussed in the last section, the impact of such a decline in interest rates was not considered in arriving at the momentum (i.e., in making forecasts of deposit balances). As a part of gap analysis, this shift in the environment would be duly taken into account and the momentum would be adequately adjusted. The “new” momentum should then be measured against objectives to see if there is a gap between expectation and potential realization. More often than not, there will be a gap between desired objectives and what the projected momentum, as revised with reference to environmental assumptions, can deliver. How this gap may be filled is discussed next.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The gap must be filled to bring planned results as close to objectives as possible. Essentially, gap filling amounts to reformulating product/market strategy. A three-step procedure may be used for examining current strategy and coming up with a new one to fill the gap. These steps are issue assessment, identification of key variables, and strategy selection. The experience of some companies suggests that gap filling should be assigned to a multifunctional team. Nonmarketing people often provide fresh inputs; their objectivity and healthy skepticism are generally of great help in sharpening focus and in maintaining businesswide perspectives. The process the team follows should be carefully structured and the analytical work punctuated with regular review meetings to synthesize findings, check progress, and refocus work when desirable. The SBU staff should be deeply involved in the evaluation and approval of the strategies. To begin, a team would typically work through a series of general questions about the industry to identify those few issues that will most crucially affect the future of the business. The following questions might be included: How mature is the product/market segment under review? What new avenues of market growth are conceivable? Is the industry becoming more cyclical? Are competitive factors changing (e.g., Is product line elaboration declining and cost control gaining in importance?)? Is our industry as a whole likely to be hurt by continuing inflation? Are new regulatory restrictions pending? Next, the company should evaluate its own competitive position, for which the following questions may be raised: How mature is our product line? How do our products perform compared with those of leading competitors? How does our marketing capability compare? What about our cost position? What are our customers’ most common criticisms? Where are we most vulnerable to competi- tors? How strong are we in our distribution channels? How productive is our technology? How good is our record in new product introduction?