LECTURE IN ENTREP

POTENTIAL MARKET
 A part of the total population that has shown some level of interest in buying a particular product or
service. (MBA Skool Team, 2018)
 A part of the market you can capture in the future. It includes the demographic group that are not currently
your customers but could become customers in the future.

Importance of Potential Market

1. identifying new customers to ensure the future of your business.
2. Think proactively about ways for your business to grow and change.
3. Show the potential of your business to investors or collaborators.
4. Increase your profit.
5. Create a strategic plan when there will be changes in the economy
or market.

I. MARKET IDENTIFICATION
Market identification is a strategic marketing method that is proposed to define the detailed customer of the
product. There are three strategic marketing methods that will assist the entrepreneur in defining the specific
market of the product.

A. Market Segmentation
Dividing the market into these segments helped the entrepreneurs address the more specific market needs,
media, pricing patterns and decision criteria in each of their different market segments.

METHODS OF MARKET SEGMENTATION

1. Demographic Segmentation is a method of dividing the whole market based on age, gender, ethnicity,
income, level of education, religion and profession/role in the company. The purpose is to limit the market into
their similarities and finding the best strategy to satisfy their needs and wants.
2. Geographical Segmentation is a is often the easiest to identify and groupings the costumers based by heir
physical location. It can be defined by country, region, city and postal code. It can be also a part of easonal
segmentation came from the response of businesses to Covid – 19 pandemic.
3. Psychological Segmentation is that the market is divided in terms of what the customers think and believe
like the personality traits, hobbies, life goals, values, belief and lifestyles.
4. Behavioral Segmentation is that the market is divided based on the variables such as perceptions,
knowledge, reactions, benefits, loyalty and responses.

The following are the important factors must be considered in

segmenting the market.
1. Accessibility of the market segment. The market segment must be accessible to the business
2. Size of the market segment. The market segment must be large enough to provide wealth to the
entrepreneurial venture.
3. Distinction of the market segment. The market segment must be easily differentiated.

II. Market targeting is a stage in market identification process that aims to determine the set of buyers with
common needs and characteristics. In the market targeting phase, the entrepreneur has already divided
the total market and is now in the process of
1. Evaluating each market segment and
2. Selecting the target market segment or segments to serve

Available Market
 Prospect who are willing and capable (have sufficient resources) buyers and have access to a particular
market or service.
 It is defined as the number of people who are both willing and capable of buying a particular product or
service in a particular market.
A Market is a place where two parties can gather to facilitate the exchange of goods and services.
A Potential Market part of the market you can capture in the future. It includes the demographic group that are not
currently your customers but could become customers in the future.

Product is a tangible or intangible item that is built or produced to satisfy the needs of a certain group of people. To
ensure the right product, an entrepreneur must know the demand of their consumer in the market.
Services are a special form of product which consists of activities, benefits or satisfactions offered for sale that are
intangible and do not result in the ownership of anything.

PESTEL analysis is a tabular framework of the trends and developments in the different forces in the external environment.
The acronym PESTEL stands for Political, Economic, Sociocultural, Ecological, and Legal Forces.

2. Environmental Forces Matrix is a modified version model of the issue priority matrix adopted by Wheel en and Hunger. It
broadly classifies the various environmental forces into their frequency of occurrence and level of effect to the existing or
proposed business.

C. Industry environment is the external environmental layer where the trends and changes are simply and directly handled
by the business includes: Government,
a. Government refers to the system or institution that handles the affairs of a particular country.
b. Suppliers refers to individual persons or companies that provide the required materials, parts, or services to the business.
c. Customers are the buyers of goods or services produced or rendered by the business.
d. Competitors are the forces existing in the industry environment that produce, sell or render products or services which
are similar to those of the business.
e. Employees are the workers of the business who are highly responsible for the production of goods or delivery of services
to the consumers.
f. Creditors refer to banks, financial institutions, and financial intermediaries engaged in the lending of money to the
borrower usually for a free or charge in the form of interest.

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

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 think of marketing concepts that persuade your
target customers. The following questions you may ask in doing this, What the customers want? What brand does
well? What does your competitor do 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)

Entrepreneurial Process – a step-by-step procedure in establishing any kind of business that an entrepreneur has to
undergo.
Opportunity - is an entrepreneur’s business idea that can potentially become a commercial product or service in the
future.

A. Seeking is to search for that right chance in business, which is to find the need for product or service.

Internal/ Microenvironment – refers to the environment within the business.

Tangible Resources – are assets of the business that have physical appearance and form.
⮚ Current Resources – are used, applied or consumed within a short period or one year.
⮚ Noncurrent or fixed
Resources – are proportions whose usefulness or benefits extend beyond one year.

Intangible Resources – are assets of the business that do not have physical appearance of form.
1. Business Culture – a collection of values, beliefs, principles and expectations learned and shared by employers,
founders, stakeholders and members of the management.
2. Business Structure – refers to the formal organizational arrangement of the business in terms of hierarchy of
positions, flow of communication relationship of functional areas and production and marketing processes

Methods of Generating Ideas

1. Focused Group Discussion (FGD)- conducted by entrepreneurs with the assistance of a moderator to gather the
views of selected consumers.
2. Brainstorming – activity similar to an FGD.
3. Brain writing/ Internet brainstorming – exactly the same as brainstorming except that the channel used is not face-
to-face but in writing or online.
4. Problem inventory analysis – participants will just be identifying from the list given the compelling problem/s of a
potential product or service instead of generating the ideas from them.
B. Screening is to check cautiously in order to select the best opportunity. The selection will depend on the
entrepreneur’s internal intent and the external intent which will address the compelling needs of the target market.

12 R’s of opportunity Screening

1. Relevance to vision, mission and objectives of entrepreneurs.
2. Resonance to values.
3. Revenues
4. Reinforcement of Entrepreneurial Interest
5. Responsiveness to customer needs and wants.
6. Each
7. Range
8. Revolutionary Impact
9. Returns
10. Relative ease of implementation
11. Resources required
12. Risks

C. Seizing is to grab or take the best chance to do the selected opportunity in business.
1. Breakthrough Innovation must be protected by patent, trade secret and copyright. Ex.: Internet
2. Technological Innovation – Technological advancement of an existing product or service. Ex.: Wireless fidelity
(WiFi)
3. Ordinary Innovation – commonly originating from market analysis and technological pull instead of technology
push. Ex.: unlimited internet plans of Telecommunication companies

FOUR STAGES
1. Idea stage – the entrepreneur determines what are the feasible products and/or services that will perfectly suit
the opportunity.
2. Concept stage – developed idea will undergo a consumer acceptance test.
3. Product development stage – stages validates the work done from the first three stages to measure success in the
commercialization of product or services.

Marketing Mix is a set of controllable and connected variables that a company gather to satisfy a customer better than
its competitor. It is also known as the “Ps” in marketing. Originally, there were only 4Ps but the model has been
continually modified until it became 7P’s. The original 4 P’s stands for product, place, price and promotion. Eventually,
three elements have been added, namely: people, packaging and positioning to comprise the 7 P’s.
The 7 P’s of Marketing Mix
1. PRODUCT
Marketing strategy typically starts with the product. Marketers can’t plan a distribution system or set a price if they
don’t know exactly what the product will be offered to the market.
Product refers to any goods or services that are produced to meet the consumers’ wants, tastes and preferences. An
example of goods includes tires, MP3 players, clothing and etc. Goods can be categorized into business goods or
consumer goods. A buyer of consumer goods may not have thorough knowledge of the goods he buys and uses. An
example of services includes hair salons and accounting firms. Services can be divided into consumer services, such as
hair styling or professional services, such as engineering and accounting.
2. PLACE
Place represents the location where the buyer and seller exchange goods or services. It is also called as the distribution
channel. It can include any physical store as well as virtual stores or online shops on the Internet.
Channel 1 contains two stages between producer and consumer - a wholesaler and a retailer. A wholesaler typically
buys and stores large quantities of several producers' goods and then breaks into bulk deliveries to supply retailers with
smaller quantities. For small retailers with limited order quantities, the use of wholesalers makes economic sense.
Channel 2 contains one intermediary. In consumer markets, this is typically a retailer. A retailer is a company that buys
products from a manufacturer or wholesaler and sells them to end users or customers. In a sense, a retailer is an
intermediary or middleman that customers use to get products from the manufacturers.
Channel 3 is called a "direct-marketing" channel, since it has no intermediary levels. In this case the manufacturer sells
directly to customers.
3. PRICE
The price is a serious component of the marketing mix. What do you think is the meaning of a Price?
In the narrowest sense, price is the value of money in exchange for a product or service. Generally speaking, the price is
the amount or value that a customer gives up to enjoy the benefits of having or using a product or service. One example
of a pricing strategy is the penetration pricing. It is when the price charged for products and services is set artificially low
in order to gain market share. Once this is attained, the price can be higher than before.
4. PROMOTION
Promotion refers to the complete set of activities, which communicate the product, brand or service to the user. The
idea is to attract people to buy your product over others. Advertising, Personal Selling, Sales Promotion, Direct
Marketing, and Social Media are examples of promotion.
5. PEOPLE
Your team, a staff that makes it happen for you, your audience, and your advertisers are the people in marketing. This
consists of each person who is involved in the product or service whether directly or indirectly
People are the ultimate marketing strategy. They sell and push the product. People are one of the most important
elements of the marketing mix today. This is because of the remarkable rise of the services industry. Products are being
sold through retail channels today. If the retail channels are not handled with the right people, the product will not be
sold. Services must be first class nowadays. The right people are essential in marketing mix in the current marketing
scenario.
6. PACKAGING
Packaging is a silent hero in the marketing world. Packaging refers to the outside appearance of a product and how it is
presented to the customers. The best packaging should be attractive enough and cost efficient for the customers.
Packaging is highly functional. It is for protection, containment, information, utility of use and promotion.
7. POSITIONING
When a company presents a product or service in a way that is different from the competitors, they are said to be
“positioning” it. Positioning refers to a process used by marketers to create an image in the minds of a target market.
Solid positioning will allow a single product to attract different customers for not the same reasons. For example, two
people are interested in buying a phone; one wants a phone that is cheaper in price and fashionable while the other
buyer is looking for a phone that is durable and has longer battery life and yet they buy the same exact phone.
Brand Name is a name, symbol, or other feature that distinguishes a seller's goods or services in the marketplace. Your
brand is one of your greatest assets because your brand is your customers' over-all experience of your business. Brand
strategy is a long-term design for the development of a popular brand in order to achieve the goals and objectives. A
well-defined brand strategy shakes all parts of a business and is directly linked to customer needs, wants, emotions, and
competitive surroundings.
Branding is a powerful and sustainable high-level marketing strategy used to create or influence a brand. Branding as a
strategy to distinguish products and companies and to build economic value to both customers and to brand owners, are
described by Pickton and Broderick in 2001.

1) Purpose
"Every brand makes a promise. But in a market in which customer confidence is little and budgetary observance is great,
it’s not just making a promise that separates one brand from another, but having a significant purpose," (Allen
Adamson).
How can you define your business' purpose? According to Business Strategy Insider, purpose can be viewed in two ways:
a. Functional. This way focuses on the assessments of success in terms of fast and profitable reasons. For example, the
purpose of the business is to make money.
b. Intentional. This way focuses on fulfillment as it relates to the capability to generate money and do well in the world.
2) Consistency
The significant of consistency is to avoid things that don’t relate to or improve your brand. Consistency aids to brand
recognition, which fuels customer loyalty.
3) Emotion
There should be an emotional voice, whispering "Buy me". This means you allow the customers have chance to feel that
they are part of your brand.
You should find ways to connect more deeply and emotionally with your customers. Make them feel part of the family
and use emotion to build relationships and promote brand loyalty.
4) Flexibility
Marketers should remain flexible to in this rapidly changing world. Consistency targets at setting the standard for your
brand, flexibility allows you to adjust and differentiate your approach from your competition.
5) Employee Involvement
It is equally important for your employees to be well versed in how they communicate with customers and represent the
brand of your product
6) Loyalty
Loyalty is an important part of brand strategy. At the end of the day, the emphasis on a positive relationship between
you and your existing customers sets the tone for what potential customers can expect from doing business with you.
7) Competitive Awareness
Do not be frightened of competition. Take it as a challenge to improve your branding strategy and craft a better value in
your brand.