COLAND SYSTEM TECHNOLOGY, INC.
HIGHSCHOOL DEPARTMENT
SINSUAT AVENUE, COTABATO CITY
ENTREPRENEURSHIP
Quarter 1 – Module 3:
Name: _______________________________
Grade & Section: ____________________
Date: ____________
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It is all about entrepreneurship
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COLAND SYSTEM TECHNOLOGY, INC.
HIGHSCHOOL DEPARTMENT
SINSUAT AVENUE, COTABATO CITY
ENTREPRENEURSHIP
Quarter 1 – Module 3:
Name: _______________________________
Grade & Section: ____________________
Date: ____________
Lesso
n 4
The Potential Market and the
Market Need
EXPECTATIONS
After going through the module, you are expected to: recognize a potential market and analyze the market need. You may start your journey in learning about the potential market and the market need. Are you excited to answer the Pre-test? Smile and Enj oy!
PRE-TEST
DIRECTIONS: To check your prior knowledge about the topic, please analyze the pictures below and list down at least three (3) potential markets that entrepreneurs should consider during this COVID -19 pandemic and indicate their needs. Write your answer in the space provided. https://images.search.yahoo.com/ Potential Market Market Need
_______5. Which of the following does not cover a high-performing enterprise? A. Build and develop the enterprise to be more competitive within a changing business environment. B. Creating gaps among employees. C. Responding to consumers’ demand. D. Maintaining product quality and accessibility. BRIEF INTRODUCTION The Potential Market
- Potential market is the part of the total population that has shown some level of interest in buying a particular product or service. Potential market is also called Total addressable market (TAM) (MBA Skool Team, 2018).
- A potential market is the part of the market you can capture in the future. It includes the demographic groups that are not currently your customers but could become customers in the future (Lake, L, 2019).
- Market potential is the total demand for a product in a given business environment (Bhasin, H., 2018). The Importance of Potential Markets (Lake, L., 2019)
- Potential markets are an important part of a business's future growth.
- Ensure the future of your business by identifying new customers.
- Think proactively about ways for your business to grow and change.
- Show the potential of your business to investors or collaborators.
- Increase your revenue.
- Create a plan B that will weather changes in the economy or market. How to Identify Your Potential Markets (Lake, L., 2019)
- Consider every target demographic that you currently sell to, as well as those you have not yet targeted. Identify what they have in common with each other, new milestones that they will encounter in their lives that will impact their buying patterns, and where they overlap or diverge from your current customers. Ask yourself these questions that will help you identify both new ways to market your current products or services, as well as new products and services that you can begin selling.
- What other products do my customers need now?
- What related products will they need in the future?
- Who else could make use of the products I am selling now?
- What demographic information does that new group have in common with my current customers?
- What demographic information does that new group have in common with each other? For example, a business that makes face masks and PPEs could identify potential markets such as:
- Hospitals and other health related industries whose employees are prone to COVID -19 virus and other viruses.
- Business industries and other organizations who want to ensure the health condition of their employees.
- Employees and workers who need to report to work to earn income.
- Households who needs to go out for their necessities. Note : Depending on the size and age of your company, as well as your industry, you may have a clear picture of the potential markets that are available. Reaching Your Potential Market (Lake, L., 2019) Once you've identified and chosen a potential market to begin targeting, you will need new marketing strategies in place to communicate with them. Use this profile to identify:
- The demographic information that people in a group have in common.
- The best forms of media to reach them.
- How they prefer to shop and make purchases.
- The concerns, struggles, or problems that you can help them overcome.
- What values matter to them, both in everyday life and when shopping.
- The language that resonates with them. The figure below depicts what is a potential market with respect to the total population and how it can be converted to a penetrated market: Available Market
- Prospects who are willing and capable (have sufficient resources) buyers, and have access to a particular market or service (www.businessdictionary.com).
- Defined as the number of people who are both willing and capable of buying a particular product or service in a particular market (MBA Skool Team, 2020). MBA Skool Team, 2018
exchange for the product to create a successful transaction (Moffatt, M.,
Your market consists of (Stull, C., Myers, P.& Scott D.M. (2008) as cited in: https://learn.marsdd.com/): Existing customers: People who have already purchased your product. Prospects: People who have not yet purchased your product but are considering it. Target market users: People in your target market who are not currently looking for a solution. Define the Market Need for Your New Business Why is it important to clearly define market needs? The market now demands that your business align to their needs. In order to properly align your marketing efforts ‒ and your content, in particular ‒ to what buyers need, you have to have a clear understanding of the many intricacies, pains and pressures within your market. To achieve such alignment, the ability to define market patterns, needs, interests, preferences, etc. for a comprehensive view of the buying process is critical (www.aberdeen.com). Below are ways to define your market (Lancaster SCORE (2010):
- Consider whether the business offers a new solution to an old problem or complements an emerging trend.
- Have a clear picture of your target market.
- Determine the benefits that your product or service offers.
- Examine industry data that can confirm whether there is a sustained, growing demand for your product or service.
- Identify the percentage of market share that it is realistic for you to capture. The more competition you have, the lower the margins will be.
- Consider how realistic your pricing is. How can you present your product or service to potential customers so that it appears to be a good value, while still affording you a healthy profit?
ACTI VITIES
Activity 1. Read and analyze the statements below about “Market”. Determine whether the statement is TRUE OR FALSE. Write TRUE if the statement is correct and write FALSE if otherwise. Write your answer in the space provided. __________1. A market is any place where two or more parties can meet to engage in an economic transaction—and should only involve legal tender. ___________2. Market includes retail stores and other similar businesses that sell individual items to wholesale markets selling goods to other distributors but may not be virtual. ___________3. Market refers to the whole area of operation of demand and supply. ___________4. A market signifies any arrangement in which the sale and purchase of goods take place. ___________5. The market establishes the prices for goods and other services. Activity 2. Read and analyze the given situations below. Identify whether this refers to existing customer, prospects, or target market users. Write your answer in the space provided.
- Students need to buy a tablet/ laptop for school requirements. 6. Arlene, a student of a public school, needs mobile data in order to comply with the requirements in school.
- Ana used to buy shampoo. 7. Hospitals need facemasks and PPEs.
- Households living in a remote area. 8. Mike, a sari-sari store owner, wants to go online selling.
- Martha, a call center agent, needs a Wi-Fi.
- Jeep drivers need to modify their jeeps for public transportation.
- Karlo, a factory worker, needs transportation.
- Ella needs to buy her vitamin C to boost her immune system. Activity 3. MAKE MEANING- INTERNET ASSSISTED ACTIVITY DIRECTIONS: Give the meaning of the following word/phrase in each item. You may use the internet to define the given word/phrase. Write your answer in the space provided.
- Customer vs. consumer _____________________________________________________
- Demographic group_________________________________________________________
- Market share _______________________________________________________________
- Market size _________________________________________________________________
- Marketing strategies_________________________________________________________ REMEMBER
Identification. Read and analyze the statements below and identify whether this refers to potential market , available market , target market , or penetrated market. Write your answer in the space provided. _________1. Active consumers of a product. _________2. People who are both willing and capable of buying a particular product or service in a particular market. _________3. It is the part of the total population that has shown some level of interest in buying a particular product or service. _________4. It includes specific customers to whom a company directs its marketing efforts. _________5. Customers or clients who are already using a particular product or service. MATCHING TYPE. Match the definitions in Column A with the word/phrase in Column B. Write your answer in the space provided. Column A Column B
- It is a company’s marketing goals and objectives combined into a single comprehensive plan. A. Market
- Refers to a person or organization that uses a commodity or service. B. Target Market
- This is an area or arena in which commercial dealings are conducted. C. Potential Market
- This is used to give a general idea of the size of a company in relation to its market and its competitors. D. Need
- This is one part of the total market for a good or service. E. Demographic group
- It is also called Total addressable market (TAM). F. Market Strategy
- A person or business that purchases a commodity or service. G. Market size
- Circumstances in which something is necessary, or that require some course of action; necessity. H. Customers
- The study of the characteristics of human populations, such as size, growth, density, distribution, and vital statistics. I. Consumers
- The number of buyers and sellers in a particular market. J. Market share
POST - TEST
REFLECTIVE LEARNING
If you’re thinking about starting a business, most likely you have dreamed of one that involves your interests. But, what does the market need or want? Do you know who is buying what and how much, or how, where and why they are buying those goods or services already? Determining the marketability of your start-up business is typically done in the context of creating a business plan and performing an analysis of your competition. It requires research into areas of marketability. Congratulations! You are almost done in this module. Please write your idea on the situation below. As would-be Entrepreneur, you are tasked to identify your dreamed business, one that involves your interests. Indicate who are your potential market, target market, available market and/or penetrated market. Write your answer in the space provided.
E-SITES
To further explore the concept learned today, please watch the video about “Understanding Customers need” @www.youtube.com