Find an underserved market
Last updated
Last updated
An underserved market is a segment of consumers or a geographical area that lacks adequate access to products, services, or resources relative to its needs or potential demand.
Key characteristics of underserved markets include:
Insufficient supply: The market has fewer goods or services available than there should be to meet existing demand ().
Limited competition: Often, there may be only one or a few providers serving the market, leading to non-competitive prices and restricted options ().
Unmet needs: There is a pervasive need among a given population that existing retailers and providers are not addressing ().
Geographical constraints: The market may be defined by its location, such as areas not within a 40-mile radius of a major airport ().
Demographic focus: Underserved markets can be based on specific population segments, such as left-handed people, the LGBTQ+ community, or those with dietary restrictions ().
Regulatory definition: In some contexts, like air transportation, underserved markets may be officially defined by government agencies ().
Identifying underserved markets often requires unconventional thinking and careful analysis. Businesses can uncover these opportunities through:
Examining customer needs through frameworks like the "jobs to be done" theory ().
Analyzing demographic data and consumer behavior patterns ().
Exploring niche markets that larger companies may overlook ().
Considering both existing and situational opportunities ().
By targeting underserved markets, businesses can potentially find profitable niches, differentiate themselves from competitors, and address unmet consumer needs.
Why do underserved markets emerge?
Underserved markets emerge for several reasons, and while the basic concept of demand exceeding supply is correct, it's more nuanced than that. Here's a breakdown of why underserved markets emerge:
Lack of Awareness: Businesses may not recognize the needs of certain populations or niche markets ().
Resource Constraints: Some markets are perceived as too expensive or not worth the effort to pursue by established players ().
Demographic Shifts: Changes in population, traditional retail corridors, or road patterns can create newly underserved areas ().
Market Misconceptions: Underserved markets are often mistakenly assumed to have insufficient demand or purchasing power ().
Inefficient Supply Chains: Improvements in supply chain efficiency can reveal previously overlooked opportunities ().
Geographical Barriers: Some areas may lack access to certain goods or services due to their location ().
Monopolistic Situations: When only one provider exists in an area, it can lead to non-competitive prices and limited options ().
Evolving Consumer Needs: New or changing consumer preferences may not be met by existing offerings ().
While it's true that underserved markets often involve demand exceeding supply, it's important to note that the imbalance can be more complex than simple quantity. It may involve quality, accessibility, or specific features that are not being adequately provided in the current market ()().