Which of the following elements of planning gap measures the gap between the total potential for
the market and the actual current usage by all the consumers in the market?
A.
Project gap
B.
Product gap
C.
Competitive gap
D.
Usage gap
Explanation:
The usage gap measures the gap between the total potential for the market and the actual current
usage by all the consumers in the market.
Mainly two figures are needed for this calculation:
Market potential: The maximum number of consumers available will usually be determined by
market research, but it may sometimes be
calculated from demographic data or government statistics.
Existing usage: The existing usage by consumers makes up the total current market, from which
market shares, for example, are
calculated. It is usually derived from marketing research, most accurately from panel research and
also from ad hoc work.
Thus, the ‘usage gap’ can be calculated by:
usage gap = market potential – existing usage
Answer option B is incorrect. The product gap is also described as the segment or positioning gap. It
represents that part of the market from
which the individual organization is excluded because of product or service characteristics. This may
have come about because the market has
been segmented and the organization does not have offerings in some segments, or it may be
because the positioning of its offering
effectively excludes it from certain groups of potential consumers, because there are competitive
offerings much better placed in relation to
these groups.
The product gap is probably the main element of the planning gap in which the organization can
have a productive input. Therefore the
emphasis is on the importance of correct positioning.
Answer option A is incorrect. The project gap is not a valid element of planning gap.
Answer option C is incorrect. The competitive gap is the share of business achieved among similar
products, sold in the same market segment
and with similar distribution patterns or at least, in any comparison, after such effects have been
discounted. The competitive gap represents
the effects of factors such as price and promotion, both the absolute level and the effectiveness of
its messages. It is what marketing is
popularly supposed to be about.