ENTREPRENEURSHIP

Recognize and Understand the

Market
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.
You are done in recognizing potential markets as the second Topic
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 lesson 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
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.
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
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
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
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.
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.