Entrepreneurship (Quarter 1 – Module 3)

Recognize and Understand the Market

What I Need to Know

You are done in recognizing potential markets as the second module in

entrepreneurship. You already understand the best product or service that will meet the market
need. Now, you will continue to learn more about markets, recognize and understand the
market. Everyone can create a business vicinity map reflective of potential market in one’s
locality/town.

What I Know

Before we begin with this module, answer the question below, Let’s see if you already
have some idea about Recognizing Potential Markets.
Write True if the statement is correct and write False if not correct.

__________1. Value refers to what the product does for customers that they’re prepared to pay.
__________2. Marketing concept that was first proposed as a theory to understand the pattern
in successful advertising called Unique Selling Proposition.
__________3. In creating value proposition, entrepreneurs will consider the four (4) basic
elements.
__________4. Unique selling proposition is specific, often citing numbers or percentages.
__________5. The effective selling using advertising and marketing is part of value proposition.
__________6. Identify and rank the uniqueness of the product or services character is one tip
for the entrepreneur on how to create an effective unique selling proposition.
__________7. The Entrepreneurs will not consider the health benefits of the consumers.
__________8. Consumers have common wants and needs.
__________9. The market targeting is a stage in market identification process that aims to
determine the set of buyers with common needs and characteristics.
_________10. Identifying the unique selling proposition will not require marketing research.
_________11. Targeting a specific market does not mean that you are excluding people who do
not fit your criteria.
_________ 12. Demographic segmentation is the total market divided according to geographic
location.
_________ 13. Knowledge and awareness is one variable to consider in behavioral
segmentation.
_________ 14. Service requirement is intangible thing or product not able to be touch but feel
the fulfillment.
_________ 15. Market size is like a world globe measurement.

Lesson Recognize and Understand the Market

 What’s In

In previous lesson we learn about the creation of an entrepreneurial ideas that lead to
the identification of entrepreneurial opportunities, which in turn results in the opening of an
entrepreneurial venture. In opening the new venture or a business, you need to determine the
Unique Selling Proposition (USP) and Value Proposition (VP) of your product as well as your
target market.

What’s New

Activity1. Identify whether Unique Selling Proposition or Value Proposition on one’s

product/service.
Example: Langhap Sarap Example: Unique Selling Proposition
1. Safeguard ___________________________
2. Love ko to ___________________________
3. Supermarket ___________________________
4. Surf ___________________________
5. Bukas kahit anong oras ___________________________

Activity 2. Determine what method of market segmentation (Geographic, Demographic,

Psychological and Behavioral Segmentation) will be used to the following items.
We have Climate Change. ___________________
Over 60 years of age. ___________________
Branded (US Levi’s). ___________________
This product is good for my health. ___________________
Most People in the community are Roman
Catholic. ___________________

What is It

Value Proposition (VP) is a business or marketing statement that summarizes

why a consumer should buy a company's product or use its service. This statement is often
used to convince a customer to purchase a particular product or service to add a form of value
to their lives. In creating Value Proposition, entrepreneurs will consider the basic elements:

Target Customer
Needs/opportunity
Name of the product
Name of the enterprise/company
There are many competitors in the market to establish superiority to them. Entrepreneurs
should think some alternative and how it works better. An important aspect in Value Proposition
must be truthful that will establish credibility to the consumers.
Example: Potential value proposition is most common in small businesses of your locality.
Aling Charing Sari-sari Store open only from 6:00 am to 6:00 pm, but Aling Charing noticed that
there are customers who go nearby town to look for a convenience store at around 10:00 pm to
6:00 am. She believes that this is a great opportunity for her store to operate 24/7. In this
example, proposed value proposition: “Charing Sari-sari Store, opens 24/7”.
The business describes sari-sari store – a basic retail store. The assurance from this value
proposition is because of the phrase “opens 24/7”, Aling Charing Sari-sari Store opens 24/7,
which make it different from other competitors.
Unique selling proposition (USP) refers to how you sell your product or services to your
customer. You will address the wants and desires of your customers.
As entrepreneur, you think of marketing concept that persuade your target customers. The
following questions you may ask in doing this, What the customers want? What brand does
well? What your competitor does well?
Some tips for the entrepreneur on how to create an effective unique selling proposition to the
target customers:
Identify and rank the uniqueness of the product or services character
Very Specific
Keep it short and simple (KISS)
As entrepreneur, present the best feature of your product or services that are different from
other competitors. Identifying the unique selling proposition requires marketing research that you
will learn from the other modules. In promoting your products or services, make sure that it is
very specific and put details that emphasize the differentiator against the competitors. Keep it
short and simple and think of a tagline that is easy to remember. Right now, the proposed
unique selling proposition:
“Charing Sari-sari Store, opens 24/7”.
Readers get confused between value proposition and unique selling proposition. The two
propositions are used to differentiate the products from competitors. For example, Jollibee is
known to have a Filipino taste burger. This brand has a unique selling point because of its
tagline “Langhap Sarap”
Unique Value Proposition and Value Proposition are two most famous tools used to explain why
prospect customers buy each products and services. Base on each definition, we learn that USP
and VP are frameworks of each business industry. The two propositions are valuable for the
entrepreneurs.
After you understand the value proposition and the unique selling proposition, now it’s time to
understand the target market, customers requirement and market size.
A. Target Market
Market Targeting is a sage in market identification process that aims to determine the
buyers with common needs and characteristics. Prospect customers are market segment that
entrepreneurial venture intends to serve.
In targeting a specific market, it will exclude people even if it will not fit your criteria. Rather,
target marketing allows you to focus your marketing money and brand message on a specific
market that is more likely to buy from you than other markets. Product is more affordable,
efficient, and effective way to reach potential clients and generate business.

Commonly used methods for segmenting the market are follows.

1. Geographic segmentation – the total market is divided according to geographical location.
• Variable to consider
Climate
Dominant ethnic group
Culture
Density (either rural or urban)
2. Demographic Segmentation – divided based consumers.
• Variable to consider
Gender
Age
Income
Occupation
 Education
Religion
Ethnic group
Family size
3. Psychological Segmentation- divided in terms for customers think and believe.
Variable to consider
Needs and wants
Attitudes
Social class
Personality traits
Knowledge and awareness
Brand concept
Lifestyle
4. Behavioral Segmentation- divided according to customers behavior pattern as they interact
with a company.
Variable to consider
Perceptions
Knowledge
Reaction
Benefits
Loyalty
Responses
B. Customer Requirements
Customer requirements are the specific characteristics that the customers need from a
product or a service.
There can be two types of customer requirements:
Service Requirement
Output Requirement Service Requirement:
Intangible thing or product that is not able to be touched but customer can feel the fulfillment.
There are elements in service requirement like on-time delivery, service with a smile, easy-
payment etc. It includes all aspects of how a customer expect to be treated while purchasing a
product and how easy the buying process goes.
Output Requirements:
Tangible thing or things that can be seen. Characteristic specifications that a consumer expects
to be fulfilled in the product. Costumer that will avail services as a product, then various service
requirements can take the form of output requirements. For example, if the consumer hires a
multi cab, then on-time arrival becomes an output requirement. Customer buys gadgets (phone
speaker), the specification like the loudness and clarity are the output requirements.
C. Market Size
Entrepreneur’s most critical task is to calculate the market size, and the potential value that
market has for their startup business. Market research will determine entrepreneur possible
customers in one locality.

What is Market Size?

Market size is like a size of arena where the entrepreneurs will play their business. It is the
approximate number of sellers and buyers in a particular market. Companies are interested in
knowing the market size before launching a new product or service in the area. In determining
the market size, entrepreneur will conduct a strategic marketing research from reliable sources
using the following method. First step is to estimate the potential market – approximate number
of customers that will buy the product or avail your services. Second step is to estimate the
customers who probably dislike to buy your product or avail the services. Third step is for the
entrepreneur to estimate the market share, that means plotting and calculating of the
competitor’s market share to determine the portion of the new venture. Market size become the
most important if you ever need to raise funding for your business.
 What I Can Do

As an entrepreneur, you are planning to have a business. Use these following questions as
your guide.
1. What product you want to sell?
2. Apply the concept of value proposition and unique selling proposition.
Make a tagline for your chosen product.
3. Who is your target market?

Assessment

Multiple Choice: Select the best answer.

____1. What is the relationship between unique selling proposition and value proposition?
a. a framework of each business industry
b. meet your competitors needs wants.
c. persuades another to exchange money for a product service’s
d. connected with only one particular thing.
____2. The following variable to consider in behavioral segmentation, except.
a. perception
b. brand concept
c. reaction
d. benefits
____3. What is the function of Value Proposition?
a. use to power up sales
b. convince customer to purchase a particular product or services.
c. customers buying habits
d. provide value to your customers
____4. Give example in promotion using Value Proposition and Unique Selling proposition.
a. with the slogan “Langhap Sarap”
b. ordinary sari-sari store
c. multinational business
d. fruit shake stand
____5. ___________will determine entrepreneur possible customers in one locality.
a. Market design c. Market research
b. Market strategy d. Market size
____6. The term behavioral segmentation refers to:
a. divided based on consumers
b. divided in terms for customers think and believe.
c. divided according to geographical location.
d. divided according to customers behavior pattern as they interact with a company.
____7. What is market size?
a. Tangible things that can be seen.
b. Size of arena where the entrepreneur will play their business
c. The most important part to the success of the company
d. Another variation of segmentation marketing.

____8. Considered favorable indicators for doing business in that particular location.
a. structure of the segment
b. capability of the business
c. size and growth of the segment
 d. segmentation marketing
____9. Select type of customer requirement
a. service requirement c. service responsibility
b. service oriented d. service fulfillment
____10. This refers to how you sell your products or services to your customer.
a. Value proposition c. Selling proposition
b. Unique selling proposition d. Marketing concept

____ 11. Tips for the entrepreneur on how to create an effective unique selling proposition to the
target customers, except.
a. Identify and rank the uniqueness of the product or services characteristic.
b. Very specific
c. Keep it short and simple
d. Completeness of proportion
____ 12. Geographic segmentation refers to:
a. Divided according to geographical location
b. Divided based consumers.
c. Divided in terms for customers think and believe
d. All of the above
____ 13. Service requirement _____________ thing or product not able to touch but customer
can feel the fulfillment.
a. Tangible c. Service
b. Intangible d. Output
____ 14. Tangible things that can be seen refers to what?
a. Service requirement c. customer requirements
b. Output requirement d. Entrepreneurs output
____ 15. What is the first step in conducting a strategic marketing?
a. Estimate the potential market
b. Estimate the customers who probably dislike buying your product
c. Estimate the market share
d. Estimate business funding.

Additional Activities

Give at least 5 products being advertised or promoted on television. Evaluate each one
according to its USP, VP, method of segmentation used, customer requirements, and who are
target customers.

Product Method of Customer Target

Name USP VP Segmentation Requirements customers
Ex. Jollibee Langhap Filipino Service &
Sarap taste burger Psychological Output All people

1.
2.
3.
4.
5.