Lesson 1: Business Enterprise Simulation (Marketing

Study)
Schedule: Time Frame: 2 weeks

Objective:

At the end of the chapter, the learner-entrepreneurs are expected to:

 Integrate the competencies, skills, and learning acquired by the student from the
ABM Strand courses;
 Begin Business Enterprise Simulation activities; and
 Utilize the ABM Incubation Laboratory (ABMIL) facilities.

Introduction

What is market research?

Market research (or marketing research) is any set of techniques used to gather information and
better understand a company’s target market. Businesses use this information to design better products,
improve user experience, and craft a marketing message that attracts quality leads and improves
conversion rates.

Why is market research so valuable?

Without research, it’s impossible to understand your users. Sure, you might have a general idea of
who they are and what they need, but you have to dig deep if you want to win their loyalty.

Discussion

Marketing Study
The marketing study details the implementation activities for the marketing objectives of the
enterprise groups. It is assumed that the chosen environments for the business projects are the
respective schools or residential communities of the learner-entrepreneurs. Selected guidelines for other
are also given.

Target Market Description

Today business environment already draws marketing plans for an identified market. For the
business. For the Business Enterprise Simulation course located in school or residential communities, the
demographics for the target or identified market may be easier to obtain. The market segmentation,
market targeting, and market positioning data may also be available.
Mendiola, Tanchingco, and Agustin (2017) include demographics, lifestyle or psychographics,
behavior, occasion, and usage for the market segmentation characteristics. Since the school or residential
environment is primary location, the needs of population in these communities may not differ to much.
Demographic traits such as age¸ gender, occupation, and education may be used to segment school
population, as the teachers service personnel, and even parents maybe included in the identified market
of the learners-entrepreneurs. For residential communities, family size, religion, and nationality may be
additional traits to age, gender, occupation, and education.
Product or Service Description
As mentioned earlier, only the service and merchandising sectors are considered for the course.
Although this may limit the product or service choices of the learner-entrepreneur, product decision
guidelines cited by Mendiola, Tanchingco, and Agustin (2017) assist the enterprise groups in their
choices.

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 For the marketing study, pictures, graphic illustrations, or visual representations may be required
for the product or service description. Features, such as colors and sizes available for clothes, should be
included. When and if product or service standards of government or private sector associations are on
hand, these should be provided as well.

A product is tangible, so its features and characteristics are observed by the senses. Product
aroma, color, and texture may be perceived. A service is tangible, so its features and characteristics ma
change with the client’s experience of the same.

Aside from intangibility, services are also characterized by variability, inseparability, and
perishability. For food service projects, for example, a cook preparing a snack from standard recipe at the
start of the day may not able to replicate the same snack in the afternoon.

Service providers, or those who deliver the service, cannot be detached or distinguished from the
service. The Beauty Salon visit by a customer may change if his/her favorite hairdresser is not available
or if the shampoo attendant is new or experienced. Finally, the delivered service cannot be stored for use
at a different time or sold to other clients. For Example, although the massage chair or attendant may be
the same, the massage experience cannot be kept for future use by a client. The experience of the
massage is expected to ‘perish’ or fade after some period.

Service business take care of standardizing or keeping certain quality standards for the delivery of their
services, but intangibility, variability, inseparability, and perishability concepts have to be addressed on a
continuous basis.

Pricing Strategy
- Price dictates the revenue figure in the Enterprise Business Plan. It is the amount of money
exchanged for product purchase or the delivery of a service. For Merchandising businesses,
the price of the product may be purchase cost plus the markup and margins estimated for the
“buying and selling” transactions.

Mendiola, Tanchingco, and Agustin (2017) list the following approaches determining selling prices:

1. Cost-oriented pricing, where a cost serves as a basis for pricing products.

a. Cost-plus pricing – where a specified amount is added to the unit cost.
b. Standard markup pricing – where a specific percentage is added to the unit cost.

2. Target profit pricing, where the desired profit is added to the unit cost.
3. Competition-based pricing, pricing strategy that utilize prices competitors, the index for which
same, higher or lower price is determined by the owner-entrepreneur.

Location or Place Strategies

As the Business Enterprise Simulation course assumes the chosen locations of the learner-
entrepreneurs to be their school or residential environments, the location strategy is a given variable.
However, the place strategy should also consider distribution types. For example, most fast-food outlets
have delivery services, so their locations are not constraints for reaching a bigger consumer base than
that dictated by their locations. Some web-based businesses do not have physical locations anymore, s
their ‘virtual’ location allow them to sell to diverse and wider clients bases.

Mendiola, Tanchingco, and Agustin (2017) list the following distribution types to expand location-based
client populations:

1. Direct distribution, through house-to-house or stall setups

2. Indirect distribution, through agents or intermediaries
3. Hybrid distribution, a combination of the direct and indirect approaches

It is recommended to use physical setups for the course, and rental fees are charged to the
enterprise group for their use of school facilities. The agents or intermediaries may be determined
by the school administrators.

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Promotion Strategies

Promotion strategies utilize tools that are designed to communicate with the buyer population.
Some communication platforms cited by Mendiola, Tanchingco, and Agustin (2017) are advertising,
public relations, personal selling, sales promotions, and direct marketing.

As the business enterprise simulation course has time and location constraints, costly promotion
tools are not recommended. Perhaps the most applicable tool for the learner-entrepreneurs would be
sales promotions through discounts, complimentary gifts, and extra units for specified periods. An
example is the sale at discounted prices of baked goods and other consumables before the closing time of
sales outlets.

Projected Sales Volume and Value

This section would involve forecasted figure for the marketing activities for the period covered.
The forecasted volume is important for the purchase orders of the operation team. The forecasted value is
the product of the volume, multiplied by the price per unit.

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