Entrepreneurship

Learning Material/Week 5

Descriptive Title: BEST PRODUCT FOR MARKET NEED

Sub-topics:
1. Tips in Choosing the Business Name
2. Product Life Cycle
3. Selling Proposition
4. Value Proposition

Objectives:
a. provide list of brand names that met the criteria in choosing business names and
b. identify stages of product life cycle.

Discussion

Topic 1
Tips in Choosing the Business Name

1. Easy to Recall or Remember – The business name must be understandable so it is easily stored in
the memory.

2. Pleasant Meaning Creates Pleasant Feelings – It produces positive or favorable feeling upon saying
or mentioning to the public.

3. Easy to Pronounce – The business name must be cited as freely as it can be.

4. Easy to Spell – The business name must be simple. Words that are used in everyday communication
will be an advantage.

5. Related to the Product – The business name must describe the product. It represents the features of
the product.

Topic 2
Product Life Cycle

The Product Life Cycle concept describes a product’s sales, profits, customers, competitors, and
marketing emphasis from its beginning until it is removed from the market.

Stages of Product Life Cycle

I. Product Development

The company must think of a new product. A new product is a modification, creation, and innovation of
an existing product which makes the product more meaningful to the customer.

The new product planning process involves a series of steps:

1. Idea Generation – searching and looking for new product or business opportunities. The employees,
channel members, competitors, and customers can be a great source.

Methods:

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a. Brainstorming – all the members of the group can contribute in sharing ideas, comments, and
suggestions.

b. Analyzing Existing Products – a successful product that captures great market can be
analyzed as a basis in creating a new product.

c. Reading Trade Publications – an inspirational story of a successful entrepreneur can lead

into a development of a new product.

d. Visiting Suppliers’ Facilities – supplier’s raw materials can be used as a method to innovate
and modify existing product.

e. Surveys – getting feedback coming from the customers and potential market.

2. Idea Screening – ideas which are unsuitable, unattractive, or poor are junked. Ideas together with
attributes are rated on the basis of a rating from 1-10. Ideas are rated on the following categories:
general, marketing, and production characteristics.

3. Concept Testing – ideas which have passed the screening stage will now require feedback from the
consumer. It measures consumer enthusiasm by asking potential consumer to react to a picture,
statement or oral description of a product.

4. Business Analysis – is a review of market factors, revenues, cost and trends.

a. Demand Projections – sales potential; sales growth; rate of repurchase; distribution intensity.

b. Cost Projections – per unit cost; raw material cost; cost of existing facilities and resources;
breakeven point.

c. Competition – market share of company and competitors; strengths and weaknesses of

competitors; potential competitors.

d. Required Investment – engineering, patent search, product development, testing; promotion;

production; distribution.

e. Profitability – time to recover initial cost; per unit profits; distribution intermediaries; control
over price; Return of Investment.

5. Product Development – ideas are converted into tangible form. This stage involves:

a. Product construction: type and quality of materials, method of production, production time
and cost requirements per unit; plan capacity, sizes and colors

b. Packaging: materials used in promotion or storage; cost; sizes and colors

c. Branding: choice of new or existing name; exclusivity; trademark protection

d. Product positioning: selecting a market segment

e. Consumer attitude and usage testing.

6. Test Marketing – involves a selling of a fully developed product in a selected city and observing the
actual or on the spot performance under the chosen marketing plan. Depending on the results, a firm can

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decide to go ahead, modify the product or services, modify the marketing plan or drop or delete the
product.

7. Commercialization – this involves the actual marketing of the product in the target market. The
different activities to introduce the product to the market must be presented.

II. Introduction

A new product is introduced into the marketplace and the objective is to generate customer interest. The
rate of sales growth depends on the desirability of the product, competition is limited or selected, losses are
experienced because of high production and marketing costs. Initial and immediate customers are called
innovators who are willing to take risk because the product is new in the market. Promotions must be
informative and free samples may be desirable.

III. Growth

The product gains wider consumer acceptance and the objective are to expand distribution and the range
of available product alternative. More firms enter the profitable and tested market. Profits are high because the
mass market buys from a limited group of firms. Basic models are modified and chosen; distribution is
expanded coupled with mass advertising to meet new goals.

IV. Maturity

The product’s sales level and companies try to maintain lower price, better product features for as long
as possible. Market is saturated, penetrated and competition is at its highest level. Company profits decline
because discounting becomes popular and high cost in advertising. Products are available at most outlets at
varying prices. Promotion is very competitive.

V. Decline

The product’s sales falls as substitutes and new competitors enter the market. During this stage, firms
may reduce or lessen the items produced and outlets used, promotion utilized, or they can revive and renew the
product by repositioning, repackaging or they can terminate the product.

Topic 3
Selling Proposition

A Unique Selling Proposition (USP) is a marketing strategy that focuses on a product’s special feature,
one that is not carried by any other product or on special offerings, bonuses and promos, to entice consumer
interest and attention.
Unique Selling Proposition (USP) or Unique Selling Point is the term that refers to any aspect of an
object that differentiates it from similar objects. It is a factor that a business has that makes it different and or
better than others out there. It makes a business stand out from the rest in a market.

It gives an idea that this term will generally produce distinct characteristic from the existing product
features and attributes so that the company must maintain relationship accurately toward all stakeholders of
their product.

USP Strategy that ca Increase Sales

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1. Sympathize with your customer’s needs.

Entrepreneurs focus solely with their product or service and not giving priority to the customer’s
needs, considering that they must be satisfied.

2. Determine price as a factor to obtain sales.

Entrepreneurs must be aware of the competitors’ price so as to adjust to the cost of production
just to maintain quality.

3. Consider what motivates your customer.

Study the customer demographics, such as age, gender, ethnic group, income and geographic
location which most businesses collect to analyze their sales trends. The data collected can be used as
motivational factors.

4. Expose the primary reasons why customers are buying the product.
As your business grows, you will be able to ask your best source of information: your customers.
You will be surprised how honest people are when you ask how you can improve your service.

5. Unique personality in your industry leverage.

It may seem strange to assess an industry on the basis of personality. Certain industries carry an
undeserved reputation that distorts how outsiders view them, often for the worse.

6. Develop personal involvement.

Sellers must consider every transaction a chance to reach out to attain customer delight not just
satisfaction.

How to Write a Unique Selling Proposition (USP)

Here are a few ways to get started:

1. Identify a Target Market

This step of qualifying a business idea is determining who will be buying your product or
service. The company needs to create a picture of the ideal customer. Consider factors such as age,
gender, education, level, income and location. Then it can narrow down the picture of the ideal customer
the better.

2. Know What Makes the Product/Service Different

During the research, the company will probably discover that there are other businesses already
offering the same or similar products and services to the target market. It identifies what makes the
business different, and why the target clients should choose over the competitors. The company USP can
be very effective tool that helps define the brand and make the business memorable.

3. Research the Competition

The company needs to know who the ideal customer is and also needs to know who the head of
that particular department is. This is why it is really important to get an idea of who your competitors are
before you move ahead with your business idea.

Two excellent tools for researching your competitors are a competitive analysis and a SWOT
analysis.

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4. Conduct a Financial Feasibility Analysis

This is the guide in conducting a financial analysis that will help the company get started
gathering financial data. The company will want to make sure and consider all potential capital sources,
while thinking how the company can bootstrap and limit the investment needed.

Topic 4
Value Proposition

Value proposition is a promise of value to be delivered and recognized. It is also a belief from the
customer how value (benefit) will be delivered and experienced. A value proposition can apply to an entire
organization, or parts thereof, or customer accounts, or products or services. Creating a value proposition is a
part of business strategy.

A value proposition is a business or marketing statement that a company uses to summarize why a
consumer should buy a product or use a service. This statement convinces a potential consumer that one
particular product or service will add more value or better solve a problem than other similar offerings.
Companies use this statement to target customers who will benefit most from using the company’s products,
and this helps maintain an economic moat.

A value proposition is a promise by a company to a customer or consumer segment. It is an easy-to-

understand reason why a customer should purchase a product or service from that specific business. A value
proposition should be a clear statement that explains how a product solves a pain point, communicates the
specifics of its added benefit, and states the reason why it is better than similar products on the market. The
ideal value proposition is concise, and it appeals the customers.

A value proposition is a statement which clearly identifies benefits consumers get when buying a
particular product or service. It should convince consumers that this product or service is better than other on
the market. This proposition can lead to a competitive advantage when consumers pick that particular product
or service over other competitors because they receive greater value.

Value Proposition Advantages

There are the benefits and advantages to be considered through the process of discovering,
articulating and realizing your value proposition:

1. Gives direction – It provides direction by defining the ideal target audience right up-front and
identifies and understands the core needs that can be satisfied by the planned solution. Value proposition
helps prevent waste of time, money, and effort by offering products or services that are not relevant or
attractive to the target customers.

2. Creates focus – It gives the team focus by identifying the fundamental initiatives, activities and
aspects of the business, this will have the greatest impact or meeting the defined target audience’s needs.
Value proposition assists in focusing on why and how the business will be delivering value. It outlines
what the company must deliver to meet the defined audience’s needs and create an overall remarkable
experience.

3. Breeds confidence – It can progress without questioning and second-guessing the every move, thus
breeding confidence. The company can be assured of the decisions that made by seeing where and how
the company is adding value to the audience. Confidence comes from knowing that you are making a
difference to the people that the company serves so in a way that is meaningful to them.

4. Improves customer understanding and engagement – It gives the basis to engage with customers
in a compelling and resonant manner by understanding how they view the company, and its products or
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services. The value proposition determines the factors that do not only make a difference to the
audience, but in aspects or ways that is meaningful to them.

5. Focuses on the clarity of business value – It is any brand recognitions. The company is going to
paint a very clear picture of the company’s brand. Often though, many companies’ marketing messages
end up being vague and unfocused, thereby losing their impact and persuasiveness. The value
proposition frames not only how the creating value for the audience but explains critically why the
solution is better than what they are currently doing or using against whatever is potentially out there.

Activity

1. List some brand names that met the criteria in choosing a business name.

Example:
1. Easy to Recall or Remember – Surf
2. Pleasant Meaning Creates Pleasant Feelings – Lucky Me
3. Easy to Pronounce – Tide
4. Easy to Spell – Tang
5. Related to the Product – Coffee Mate

Easy to Recall or Remember Pleasant Meaning Creates Pleasant Feelings

1. 1.
2. 2.
3. 3.
Easy to Pronounce Easy to Spell
1. 1.
2. 2.
3. 3.
Related to the Product
1.
2.
3.

Evaluation

1. Write True if the statement is correct and False if otherwise.

__________1. A value proposition is a statement which identifies benefits consumers get when buying a
product.

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__________2. In idea screening, ideas which have passed the screening stage will now require feedback from
the consumer.

__________3. A business name must produce positive and unfavorable feeling upon saying or mentioning to
the public.

__________4. Sympathizing with the needs of customers can increase sales.

__________5. A business name that is easy to remember is advantageous to the entrepreneur.

2. Provide what is being asked. Write your answers before each number.

_______________1. It involves selling of a fully developed product in a selected city and observing the actual
or on the spot performance.

_______________2. It is getting feedback coming from the customers and potential market.

_______________3. It is a review of market factors, revenues, costs and trends.

_______________4. In this stage, ideas are converted into tangible form.

_______________5. During this stage, firms can terminate the product.

_______________6. It involves the actual marketing of the product in the target market.

_______________7. It is searching and looking for new product or business opportunities.

_______________8. In this stage, profits are high because the mass market buys from a limited group of firms.

_______________9. It is a marketing statement that convinces a potential consumer that one particular product
or service will add more value or better solve a problem than other similar offerings.

_______________10. In this stage, initial and immediate customers are called innovators who are willing to
take risks.

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