Environment and Market

(EM)
Module 2 - J. Castor
a. Food Business
b. Real Estate Company
c. Both a and b
d. none of the above
a. Food Business
b. Real Estate Company
c.
d. none of the above
 Why does Starbucks don’t
have any commercials?

Simply because they don’t have to.

Aspiring entrepreneur need to
explore the economic, cultural, and
social conditions prevailing in an
area. Needs and wants of the
people in a certain area that are
not met may be considered
business opportunities.
Identifying the needs of the
community, its resources,
available raw materials, skills,
and appropriate technology
can help a new entrepreneur
seize business opportunities.
To be successful in any kind of
business venture, potential
entrepreneurs should look closely at
the environment and market. They
should always be watchful of existing
opportunities and constraints, and to
take calculated risks.
The opportunities in the
business environment are
factors that provide
possibilities for a business
to expand and make more
profit.
Constraints, on the other hand, are
factors that limit business growth, hence
reduce the chance of generating profit.
One of the best ways to evaluate
opportunities and constraints is to
conduct a Strengths, Weaknesses,
Opportunities and Threats (SWOT)
Analysis.
SWOT Analysis is a
managerial tool used to
assess the environment. It is
used to gather important
information which is then
used in strategic planning.
Strengths and weaknesses are
internal in an organization.
They relate to resources owned
by an organization that you
have control over and also the
extent of its marketing.
Opportunities and threats exist in the
external environment. Opportunities
relate to the market, new technologies,
and the external factors such as
government policies, climate, and trends.
Threats replace what the competitors are
doing. It also includes legal and other
constraints.
 Product
Development
Process of making a new product
to be sold by a business or
enterprise to its customers.
Product development may involve
modification of an existing
product or its presentation, or
formulation of an entirely new
product that satisfies a newly-
defined customer’s needs, wants
and/or a market place.
The term development in this
module refers collectively to the
entire process of identifying a
market opportunity, creating a
product to appeal to the
identified market, and testing,
modifying, and refining the
product until it becomes ready
for production.
There are basic, yet vital questions
that you can ask yourself about
product development. When you
find acceptable answers to them,
you may now say that you are
ready to develop a product
and/or render services.
1. For whom are the product/services
aimed at?
2. What benefit will the customers
expect from product/service?
3. How will the product/service
differ from the existing brand?
From its competitor?
In addition, needs and wants of the
people within an area should also
be taken into big consideration.
Everyone has his/her own needs and
wants. However, each person has
different concepts of needs and
wants. Needs in business are the
important things that an individual
cannot live without in a society. These
include:
1. basic commodities for
consumption
2. clothing and other
personal belongings,
3. shelter, sanitation and health
4. education
Basic needs are essential to an
individual to live with dignity
and pride in a community.
These needs can obviously
help you generate business
ideas and subsequently to
product development.
Wants are desires, luxury
and extravagance that
signify wealth and
expensive way of living.
Wants or desires are
considered above all the
basic necessities of life.
Needs and wants of people
are the basic indicators of
the kind of business that
you may engage in
because it can serve as the
measure of your success.
Some other points that might
be considered in business
undertakings are the kind of
people, their needs, wants,
lifestyle, culture and tradition,
and their social orientation.
To summarize, product
development entirely
depends on the needs
and wants of the
customers.
Another important issue to
deal with is the key concepts
of developing a product. The
succeeding topic shall
enlighten you about the
procedure in coming up with
a product.
 Concepts of
Developing a
Product
Concept development is a critical
phase in the development of a
product.
In this stage, the needs of the
target market are identified, and
competitive products are reviewed
before the product specifications
are defined.
The product concept is selected
along with an economic
analysis to come up with an
outline of how a product is
being developed.
The process of product development follows
the following stages:

1. Identify customer needs:

Using survey forms, interviews, researches, focus group
discussions, and observations, an entrepreneur can easily
identify customers’ needs and wants. In this stage, the
information that can be possibly gathered are product
specifications (performance, taste, size, color, shape, life span
of the product, etc.). This stage is very important because it
would determine the product to be produced or provided.
2. Establish target specifications:
Based on customers' needs and reviews of
competitive products, you can now
establish target specifications of the
prospective new product and/or services. A
target specification is essentially a wish-
list.
3. Analyze competitive products:
It is imperative to analyze existing
competitive products to provide important
information in establishing product or
service specifications. Other products may
exhibit successful design attributes that
should be emulated or improved upon in the
new product or service.
4. Generate product concepts:
After having gone through with the
previous processes, you may now develop a
number of product concepts to illustrate
the types of products or services that are
technically feasible and will best meet the
requirements of the target
specifications.
5. Select a product concept:
Through the process of evaluation
between attributes, a final concept is
selected. After the final selection,
additional market research can be applied
to obtain feedback from certain key
customers.
6. Refine product specifications:
In this stage, product or services
specifications are refined on the basis of
input from the foregoing activities. Final
specifications are the result of extensive
study, expected service life, projected
selling price among others are being
considered in this stage.
7. Perform economic analysis:
Throughout the process of product
development, it is very important to
always review and estimate the economic
implications regarding development
expenses, manufacturing costs, and selling
price of the product or services to be
offered or provided.
8. Plan the remaining development
project:
In this final stage of concept development,
you can prepare a detailed development
plan which includes list of activities,
necessary resources and expenses, and
development schedule with milestones for
tracking progress.
Finding
Value
People buy for a reason. There should be
something in your product or service that
would give consumers a good reason to go
back and buy more.
There must be something that will make
you the best option for target customers;
otherwise, they have no reason to buy
what you are selling.
This implies further, that you offer
something to your customers that
will make them value your
product or service.
The value you incorporate in your
product is called value proposition.
Value proposition is a believable
collection of the most persuasive
reasons why people should notice you
and take the action you’re asking for.
It is what gets people moving, what
makes people spend for your product
or service.
Innovation
Innovation is the introduction of
something new in your product
or service. This may be a new
idea, a new method, or a new
device. If you want to increase
your sales and profit, you must
innovate.
 Unique
Selling
Preposition
(USP)
Unique Selling Proposition is the factor or
consideration presented by a seller as the
reason that one product or service is
different from and better than that of the
competition. Before you can begin to sell
your product or service to your target
customers, you have to sell yourself in it.
This is especially important when your
product or service is similar to your
competitors.
USP requires careful analysis of
other businesses' ads and
marketing messages. If you analyze
what they say or what they sell, not
just their product or service
characteristics, you can learn a
great deal about how companies
distinguish themselves from
competitors.
Here's how to discover your USP and how to use
to increase your sales and profit:

Use empathy
Put yourself in the shoes of your
customers. Always focus on the needs
of the target customers and forget
falling in love with your own product or
service.
Always remember, you are making/providing
this product not for yourself but for the target
customers to eventually increase sales and
earn profit. Essential question such as what
could make them come back and ignore
competition, should be asked to oneself. Most
possible answers may be focused on quality,
availability, convenience, cleanliness, and
reliability of the product or service.
 Identify customer’s desire
It is very important for you to understand
and find out what drives and motivates
your customers to buy your product or
service. Make some effort to find out,
analyze and utilize the information that
motivates the customers in their decision
to purchase the product or service.
Discover customer’s genuine
reasons for buying the product
Information is very important in
decision making. A competitive
entrepreneur always improve their
products or services to provide
satisfaction and of course
retention of customers.
As your business grows, you
should always consider the
process of asking your
customers important information
and questions that you can use
to improve your product or
service.
Generating
Ideas for
Business
The process of developing and
generating a business idea is not
a simple process. Some people
come up with a bunch of
business ideas that are not really
feasible.
There are two problems that
arise; first is the excessive
generation of ideas that can
forever remain as a dreaming
stage and the second is when
they don’t have ideas and don’t
want to become entrepreneurs.
The most optimal way is to have a
systematic approach in generating and
selecting a business idea that can be
transformed into a real business. Here
are some basic yet very important
considerations that can be used to
generate possible ideas for business:
1. Examine exsisting goods and
services.
Are you satisfied with the product?
What do other people who use the
product say about it? How can it be
improved? There are many ways of
improving a product from the way it is
made to the way it is packed and sold.
You can also improve the materials used in
crafting the product. In addition, you can
introduce new ways of using the product,
making it more useful and adaptable to the
customers’ many needs. When you are
improving the product or enhancing it, you
are doing an innovation. You can also do an
invention by introducing an entirely new
product to replace the old one.
Business ideas may also be
generated by examining what
goods and services are sold
outside the community. Very
often, these products are sold in
a form that can still be enhanced
or improved.
2. Examine the present and future
needs.
Look and listen to what the
customers, institutions, and
communities are missing in terms of
goods and services. Sometimes,
these needs are already obvious and
identified right away.
Other needs are not that obvious because
they can only be identified later on, in the
event of certain development in the
community. For example, a province will have
its electrification facility in the next six
months. Only by that time will the
entrepreneur could think of electrically-
powered or generated business such as photo
copying, computer service, digital printing, etc.
3. Examine how the needs are being
satisfied.
Needs for the products and
services are referred to as market
demand. To satisfy these needs is
to supply the products and
services that meet the demands of
the market.
The term market refers to
whoever will use or buy the
products or services, and these
may be people or institutions
such as other businesses,
establishments, organizations,
or government agencies.
There is a very good business opportunity
when there is absolutely no supply to a
pressing market demand. Businesses or
industries in the locality also have needs
for goods and services. Their needs for raw
materials, maintenance, and other services
such as selling and distribution are good
sources of ideas for business.
4. Examine the available resources.
Observe what materials or skills are
available in abundance in your area. A
business can be started out of
available raw materials by selling
them in raw form and by processing
and manufacturing them into finished
products.
Example, in a copraproducing town,
there will be many coconut husks and
shells available as “waste” products.
These can be collected and made into
coco rags or doormats and charcoal
bricks and sold profitably outside the
community.
A group of people in your neighborhood may
have some special skills that can be harnessed
for business. For example, women in the
Mountain Province possess loom weaving
skills that have been passed on from one
generation to another. Some communities set
up weaving businesses to produce blankets,
decorative, and various souvenir items for sale
to tourists and lowlanders.
Business ideas can come from your own
skills. The work and experience you may
have in agricultural arts, industrial arts,
home economics, or ICT classes will
provide you with business opportunities
to acquire the needed skills which will earn
you extra income should you decide to
engage in income-generating activities.
With your skills, you may also
tinker around with various
things in your spare time. Many
products are invented this way.
5. Read magazines, news articles, and
other publications on new products and
techniques or advances in technology.
You can pick up new business ideas
from magazines such as Newsweek,
Reader’s Digest, Business Magazines,
“Go Negosyo”, Know About Business
(KAB) materials, and Small-Industry
Journal.
The Internet also serves as a
library where you may browse and
surf on possible businesses. It will
also guide you on how to put the
right product in the right place, at
the right price, and at the right
time.
Key Concepts
of Selecting a
Business Idea
Once you have identified business
opportunities, you will eventually
see that there are many
possibilities available for you. It is
very unlikely that you will have
enough resources to pursue all of
them at once.
You have to select the most
promising one among hundreds of
ideas. It will be good to do this in
stages. In the first stage, you
screen your ideas to narrow them
down to about few choices.
In the next stage, trim down
the choices to two options.
In the final stage, choose
between the two and decide
which business idea is worth
pursuing.
In screening your ideas,
examine each one in
terms of the following
guide questions:
1. How much capital is needed to put up the
business?
2. Where should the business be located?
3. How big is the demand for the product? Do
many people need this product and will continue
to need it for a long time?
4. How is the demand met? Who are processing
the products to meet the needs (competition or
demand)? How much of the need is now being
met (supply)?
5. Do you have the background and
experiences needed to run this particular
business?
6. Will the business be legal and not against
any existing or foreseeable government
regulation?
7. Is the business in line with your interest
and expertise?
Your answers to these
questions will be helpful in
screening which ones among
your many ideas are worth
examining further and worth
pursuing.
Branding
Branding is a marketing
practice of creating a name,
a symbol or design that
identifies and differentiates
product or services from
the rest.
It is also a promise to your customers.
It tells them what they can expect
from your product or service and it
differentiates your offerings from other
competitors. Your brand is derived
from who you are, who you want to be
and what people perceive you to be.
Branding is one of the most
important aspects in any
business. An effective brand
strategy gives you a major
edge in increasingly
competitive markets.
A good product can:
- deliver message clearly,
- confirm credibility,
- connect to target prospect,
- motivate buyers, and
- concretize user loyalty.
Here are simple tips to
publicize your brand:
 Develop a tagline.
Write a statement that is
meaningful, impressive, and
easy to remember to capture
the essence of your brand.
 Design a logo.
Create a logo symbolic of
your business and consistent
with your tagline and displace
it strategically.
Write a brand message.

Select a key message to

communicate about your
brand.
Sustain a brand quality.

Deliver a promise of
quality through your
brand.
 Practice consistency.

Be reliable and consistent

to what your brand means
in your business.
 SWOT
Analysis
In generating a business idea, you
should first identify the type of
business suited to your business idea.
You should analyze and scan the
potential environment, study the
marketing practices and strategies of
your competitors,
analyze strengths, weaknesses,
opportunities, and threats in your
environment to ensure that the
products or services you are
planning to offer will be patronized
and within easy reach of target
consumers.
 How to
conduct SWOT
Analysis
Be realistic about the strengths and
weaknesses of your business when
conducting SWOT Analysis.
SWOT Analysis should distinguish
between where your business is today,
and where it can be in the future.
SWOT Analysis should always be
specific. Avoid any gray areas.
Always apply SWOT Analysis in
relation to your competition, i.e.
better than or worse than your
competition.
Keep your SWOT Analysis short and
simple. Avoid complexity and over
analysis.
SWOT Analysis is subjective.
Thanks for Listening!
See you next time!