Applied Entrepreneurship, Lecture notes of Business

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Entrepreneurship – Grade 12 Alternative Delivery Mode Quarter 1 - Module 3 First Edition, 2020 Republic Act 8293, section 176 states that: “No copyright shall subsist in any work of the Government of the Philippines. However, prior approval of the government agency or office wherein the work is created shall be necessary for exploitation of such work for profit. Such agency or office may, among other things, impose as a condition, payment of royalty.” Borrowed materials included in this module are owned by the respective copyright holders. Effort has been exerted to locate and seek permission to use these materials from the respective copyright owners. The publisher and author do not represent nor claim ownership over them. Published by the Department of Education – Region X – Northern Mindanao Regional Director: Dr. Arturo B. Bayocot, CESO V Development Team of the Module Development Team of the Module: Authors: Joel Y. Yacas Janice B. Dominguez Author: Naneth M. Valdehuesa Joel Y. Yacas Ronee D. Quicho Janice B. Dominguez Mary Cris A. Maquilan Naneth M. Valdehuesa Ronee D. Quicho Marylinda T. Puzon Charity E. Parel Mary Cris A. Maquilan Marylinda T. Puzon Denver E. Neri Lorena Fe S. Anub Charity E. Parel Denver E. Neri Ethel Lalaine B. Morales Lorena Fe S. Anub Ethel Lalaine B. Morales Evaluators: Evaluators: Cherryl F. Descallar Eddy Lou T. Hamak Eddy Lou T. Hamak Sherriemae V. Reazol Sherriemae V. Reazol Reviewers: Illustrator: PSSg Edzel M. Dominguez Illustrator: PSSg Edzel M. Dominguez Management Team: Layout Artist: Management Team: Chairperson: Dr. Arturo B. Bayocot, CESO III Regional Director Co-Chairpersons: Chairperson: Dr. Arturo B. Bayucot, CESO III Dr. Victor G. De Gracia Jr., CESO V Regional Director Asst. Regional Director

What Can I Do Assessment Additional Activities Answer Key References

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 o ne’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 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 ideas 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.

Lesson

Recognize and Understand the Market

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.
6. We have Climate Change. ___________________
7. Over 60 years of age. ___________________
8. Branded (US Levi’s). ___________________

4. This product is good for my health. ___________________ 5. Most People in the community are Roman Catholic. ___________________

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 Sarisari 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?

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 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 for 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 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

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 ____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

a. Estimate the potential market b. Estimate the customers who probably dislike buying your product c. Estimate the market share d. Estimate business funding.

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 Name USP VP Method of Segmentation Customer Requirements Target customers Ex. Jollibee Langhap Sarap Filipino taste burger Psychological Service & Output All people

Kudos! You have finished Module 3. Get to know more about Market Research in Module 4.

Answer Key

What I know: What’s new:

1. T Activity 1:
2. T 1. Unique Selling Proposition
3. T 2. Value Proposition
4. F 3. Unique Selling Proposition
5. F 4. Value Proposition
6. T 5. Unique Selling Proposition
7. F
8. T Activity 2:
9. T 1. Geographic
10. F 2. Demographic
11. T 3. Psychological
12. F 4. Behavioral
13. F
14. T
15. F
16. Demographic Assessment: What I Have Learned
17. A 10. B 1. Unique Selling

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