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Entrep Module Know Your Market

This document discusses recognizing and understanding the market for an entrepreneurship venture. It defines the three major types of markets - consumer, industrial, and reseller markets. It also discusses determining customer requirements, including must-haves, satisfiers, and delighters. The document then covers estimating the potential market size by defining the target customer, determining the number of target customers, penetration rate, and calculating the potential market volume and value. Market research methods like focus group discussions and surveys are also summarized.

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Sheila Mae Malesido
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359 views3 pages

Entrep Module Know Your Market

This document discusses recognizing and understanding the market for an entrepreneurship venture. It defines the three major types of markets - consumer, industrial, and reseller markets. It also discusses determining customer requirements, including must-haves, satisfiers, and delighters. The document then covers estimating the potential market size by defining the target customer, determining the number of target customers, penetration rate, and calculating the potential market volume and value. Market research methods like focus group discussions and surveys are also summarized.

Uploaded by

Sheila Mae Malesido
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Entrepreneurship  Grade 12 – Module

RECOGNIZE AND UNDERSTAND THE MARKET

DETERMINE WHO THE CUSTOMERS ARE IN TERMS OF:

A. Types of Markets
A market is simply any group of actual or potential buyers of a product. There are three major types of markets.
1. The consumer market. Individuals and households who buy goods for their own use or benefit are part of the
consumer market. Drug and grocery items are the most common types of consumer products.
2. The industrial market. Individuals, groups or organizations that purchase your product or service for direct
use in producing other products or for use in their day-to-day operations.
3. The reseller market. Middlemen or intermediaries, such as wholesalers and retailers, who buy finished goods
and resell them for a profit.

B. Customer Requirements
There can be two types of customer requirements:
1. Service Requirement
2. Output Requirement

Service Requirements: Intangible aspects of purchasing a product that a customer expects to be fulfilled. It
consists of elements like on-time delivery, service with a smile, easy-payment etc. It encompasses all aspects of
how a customer expects to be treated while purchasing a product and how smooth his buying process goes.

Output Requirements: These are mostly the tangible characteristics, features or specifications that a consumer
expects to be fulfilled in the product. If a consumer is availing a service as a product, then various service
requirements can take the form of output requirements. For example, if the consumer is hailing a metro cab, then
on-time arrival becomes an output requirement. For other products such as gadgets, the product specifications
like the loudness and clarity of a pair of speakers becomes its output requirements.

Moreover, there are 3 levels of customer requirements:


1. Must Haves
2. Satisfiers
3. Delighters

Must Haves: These are the bare minimum requirements expected by the customers; if fulfilled customers will be
not show any exceptional appreciation but if not fulfilled, the customer will show dissatisfaction. The customers
do not explicitly express their desire for these but expect it to be understood. For example, a washroom in a
restaurant; the customer will feel that it is imperative to have a washroom in a decent restaurant where families
or people from business organisations come to dine.

Satisfiers: There are the requirements that customers express their desire for, explicitly. If you offer better or
more of these satisfiers, then the customers will appreciate it more and will be more satisfied. For example, the
assortment of desserts in a buffet; the customers might feel that they’re entitled to at least two as they’ve paid
heavily for the buffet and will be happier if they get four.

Delighters: These are the extras or the add ons. Absence of these will not leave the customer dissatisfied; in fact,
the absence of these characteristics might not even be noticed. But adding these would increase the customer’s
satisfaction greatly and will leave them delighted. For example, you order a-la-carte in a restaurant and get
complimentary wine.

C. MARKET SIZE

Define your target customer

PREPARED BY: MS. JAM A. MAGALANG


1st SEM  SY 2019-2020
1
Entrepreneurship  Grade 12 – Module
Estimate the number of target customers
Determine your penetration rate
Calculate the potential market size: Volume and value

Market volume
To find the overall market potential (that is, the potential market volume), multiply your number of target
customers by the penetration rate

Market volume = Number of target customers × Penetration rate

Case study: Using our fictitious example, where the number of target customers is 1,300 and the penetration rate
is assumed to be 70%, the potential market volume would be calculated as follows:
1,300 hospitals × 70% = 910 hospitals

Market value
To calculate the monetary value of the market, multiply the market volume by your average value (that is, price
expectations).

Market value = Market volume × Average value

Case study: We assume each sale to a hospital will yield an average value of $2.5 million. To find the market
value, we calculate the following:
910 hospitals × $ 2.5 million = $ 2.275 billion

MARKET RESEARCH
Market research is the process of determining the viability of a new service or product through research
conducted directly with potential customers. Market research allows a company to discover the target market and
get opinions and other feedback from consumers about their interest in the product or service.

1. FGD (Focus Group Discussion) is one of the most common qualitative research tools. It is effective in
extracting consumer and non-consumer experiences regarding products, places, or programs.

FGD can be used to address substantive issues such as:


- Understanding consumer’s perceptions, preferences, and behavior concerning a product category
- Obtaining impressions on new product concepts
- Generating new ideas about older products
- Developing creative concepts and copy material for advertisements
- Securing price impressions

FGD normally last for an hour and a half up to three hours. The participants are selected because of their
knowledge about the topic. The objective must be clear and precise. There are four key decisions to be made: (1)
Respondent Selection (2) Sample Size (3) Data Gathering (4) Data Analysis

2. Survey Research is the most preferred instrument for in-depth quantitative research. The respondents are
asked variety of questions which are often about their personal information, their motivations and their behavior.
Surveys can be conducted via telephone, personal (face-to-face interview), and mail interview.

PREPARED BY: MS. JAM A. MAGALANG


1st SEM  SY 2019-2020
2
Entrepreneurship  Grade 12 – Module
In planning a survey, there are three important concerns the one has to look into:
a. Sampling Technique
Probability Technique (Lottery Method) and Non Probability Technique (Convenience Sampling, Purposive
Sampling, Quota Sampling, and Snowball Sampling)
b. Getting the sample size
c. Designing a questionnaire

CUSTOMER PROFILING
The definition of Customer profiling is ” a description or analysis of a typical or ideal customer for one’s
business” Harper Collins Publishers. Customer profiling is a marketing tool that businesses use to understand
their customers and helps to make better business decisions. Profiling results in customer profiles which provide
a description of your customers based on a set of attributes. You can group similar profiles by shared
characteristics such as demographic, geographic, psychographic and behavioural characteristics.

METHODS OF CUSTOMER PROFILING


A. DEMOGRAPHICS (Age, Income clasess, Social Classes/Reference Groups, Ethnic Backgrounds,
Religious beliefs, Occupations)
B. PSYCHOGRAPHICS defines the customer’ motivations, perceptions, preferences and lifestyle.
Motivation goes tot eh roots of customers’ needs and wants. Perception is the way a person
chooses to received or interpret information from the external world.
C. TECHNOGRAPHICS classifies people according to their level of expertise in using product or
service (Example: Sports beginners, sports regulars, sports professionals)

MARKET SERGMENTATION. The breaking down or building up of potential buyers into groups called
market segments
MARKET AGGREGATION. Defined as the marketing of standardized goods and services to a large
population of people that they have similar needs according to Inc.
another name is "mass marketing"
MARKET MAPPING. It illustrates the range of positions that a product can take in a market based on two
dimensions that are important to the customers. It is also grouping of customers and products according to
certain market variables.

PREPARED BY: MS. JAM A. MAGALANG


1st SEM  SY 2019-2020
3

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