Terminology and useful information

Need-gap analysis

Need-gap analysis is a decision-making aid for assessing the attractiveness of new product ideas. Besides determining the general level of acceptance received by new products, it also provides insights into their “suitability for the mass market” so that their chances of success can be evaluated in more detail.

Need-gap analysis - example of use

According to this means of analysis, a new product idea must fulfil two vital prerequisites in order to be “suitable for the mass market”:

A product idea must be viewed as relevant/important (“need”) by as many consumers as possible.

For example, a Currywurst (curried sausage) for preparation in the microwave appeals especially to consumers for whom convenience is important and who want to prepare a quick and simple hot meal, possibly on their lunch break or after returning home from a long day at work. However, a microwavable Currywurst is not a particularly relevant product for consumers who do not attach such importance to this specific method of preparation or whose eating habits mean that they rarely have a need for such a product.

Besides assessing the relevance/importance of a product idea as a whole, this method can also be used to take individual product features into account. For example, the “need” for the microwavable Currywurst to include a wooden fork is not equal among all consumers. Some consumers prefer to use a fork that is at hand so that they do not feel as if they are eating a takeaway. On the contrary, a considerably higher number of consumers find the pack of curry powder included with the sausage to be important and relevant.

The product idea must be innovative in nature and fill a gap in the market that is not covered by (lots of) other products.

Winter tyres are a relevant/important product idea for almost all car owners, and there is definitely a “need” for such products during colder months. However, a vast number of such products are already available on the market and they are highly interchangeable as a result. If another “me-too” product (same price, same features) is offered, the prospects of success will be rather low, despite the product being highly relevant.

Production of need gap scores

Both the “need” dimension and the “gap” dimension of a new product idea can be operationalised using several questions and the respondents can be assessed using multipoint scales. Such analyses yield need/gap scores that are compiled and visualised in a four-quadrant matrix. The results are fundamentally categorised as follows:

  • Potential for the mass market
  • Innovation in the niche
  • Interchangeability/me-too products
  • Negligible