Entrepreneurship

Quarter 1 – Module 3
Recognize and Understand
the Market

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 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.

This module is divided into two topics:

1 – Describe the unique selling proposition and value proposition that
differentiate one’s product/service from existing products/services.
2 – Determine who the customers are in term of
a. Target market
b. Customer requirement
c. Market size
What I Know

What I Know 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.

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__________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.

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Lesson
Recognize and Understand the Market
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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.
1. We have Climate Change. ___________________
2. Over 60 years of age. ___________________
3. Branded (US Levi’s). ___________________
4. This product is good for my health. ___________________
5. Most People in the community are Roman
Catholic. ___________________

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 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?

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 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.

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Commonly used methods for segmenting the market are follows.
1. Geographic segmentation – the total market is divided according to
geographical location.
• Variable to consider
a. Climate
b. Dominant ethnic group
c. Culture
d. Density (either rural or urban)
2. Demographic Segmentation – divided based consumers.
• Variable to consider
a. Gender
b. Age
c. Income
d. Occupation
e. Education
f. Religion
g. Ethnic group
h. Family size
3. Psychological Segmentation- divided in terms for customers think and
believe.
• Variable to consider
a. Needs and wants
b. Attitudes
c. Social class
d. Personality traits
e. Knowledge and awareness
f. Brand concept
g. Lifestyle

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 4. Behavioral Segmentation- divided according to customers behavior pattern
as they interact with a company.
• Variable to consider
a. Perceptions
b. Knowledge
c. Reaction
d. Benefits
e. Loyalty
f. 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:
1. Service Requirement
2. 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.

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 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’s More

Based on the previous discussion:

1. Discuss the unique selling proposition and value proposition.
2. What are commonly used methods for segmenting the market?

What I Have Learned

Entrepreneurs will take a look at each customer’s demand in the market.

Understanding your market will help reach your goal to compete with bigger
competitors. Building positive relationships with customers required more
understanding in customers purchasing motivations and habits.
______________________ and ____________________ basically joint hand
in hand to promote its product and services. __________________is a sage in
market identification process that aims to determine the buyer common need and
behavior.

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 There are four (4) methods for segmentation, ________________,
_______________, _______________and ___________________. There are two
types of customer requirement the __________ and __________, the tangible and
intangible things.
Understanding your market will help reach your goal to compete with bigger
competitors.

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

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____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

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____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.

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 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. Langhap Filipino Service &
Jollibee Sarap taste Psychological Output All people
burger

1.

2.

3.

4.

5.

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