Entrepreneurship

Module 3:
Recognize and
Understand the
Market
 Objectives:

• 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 terms
of:
– a. Target market
– b. Customer requirement
– c. Market size
 What is Unique Selling Proposition
(USP) and Value Proposition (VP)? This part
allows the entrepreneur to prepare himself on
how to advertise and sell his product even if it
is similar to others. In this lesson, you will find
out the answers and understand more about
the 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:
1. Target Customer
2. Needs/opportunity
3. Name of the product
4. Name of the enterprise/company
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 an entrepreneur, you should think of marketing
concepts that persuade your target customers. You
may ask the following questions in doing this: What
do the customers want? What brand does well? What
does your competitor sell well? Some tips for the
entrepreneur on how to create an effective unique
selling proposition to the target customers are:
1. Identify and rank the uniqueness of the product or
services character
2. Be very Specific
3. Keep it Short and Simple (KISS)
As an entrepreneur, present the best feature of
your product or service that is 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 is: “Charing sari-sari store, open 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 Selling Proposition and Value Proposition
are two of the most famous tools used to explain
why prospect customers buy each product and
service. Base on each definition, we learn that
USP and VP are frameworks of each business
industry. The two propositions are valuable for
the entrepreneurs. Make sure that you're
focusing on a solution that is a need, and make
sure that you are targeting a customer segment
that's large enough and cares enough about your
solution so that you can build a viable business.
We'll talk more about determining the size of
your target market in our next lesson.
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. As you might
expect, the market is right at the center of our
word cloud for this lesson. Understanding your
market is critical in building your business model.
There are three factors that will determine your
customers.
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 a market segment that
an entrepreneurial venture intends to serve. In
targeting a specific market, it will exclude people
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. Choose a product that is more
affordable, efficient, and effective to reach
potential clients and generate business.
Commonly used methods for segmenting
the markets are follows.:
1. Geographic segmentation – the total
market is divided according to
geographical location.
 Variables to consider
a. Climate
b. Dominant ethnic group
c. Culture
d. Density (either rural or urban)
2. Demographic Segmentation – divided
based on consumers
 Variables 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 of how customers think and believe
 Variables 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.
 Variables to consider
a. Perceptions
b. Knowledge
c. Reaction
d. Benefits
e. Loyalty
f. Responses
B. 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:
An intangible thing or product that cannot
be touched but the 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 expects 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.
Costumers 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
The entrepreneur’s most critical task is to
calculate the market size, and the potential
value that market has for their start-up
business. Market research will determine
the entrepreneurs’ possible customers in
one locality.
What is Market Size?
Market size is like a size of the 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, the entrepreneur will conduct a
strategic marketing research from reliable sources
using the following method.
The first step is to estimate the potential market
– approximate number of customers that will
buy the product or avail your services. The
second step is to estimate the customers who
probably dislike to buy your product or avail the
services. The 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 becomes the most
important factor if you ever need to raise funding
for your business.
Activity 3:
As an entrepreneur, you are planning to have a
business. Using the following guide questions,
answer them so you can now start drafting your
business plan. Write it on a short bond paper.
INDIVIDUAL.

1. What product do you want to sell?

2. How will you apply the concept of value
proposition and unique selling proposition?
3. What is the best tagline of your chosen
product?
4. Who is your target market?