CORE 1 - Assess Market Opportunities

Competency-Based Learning Materials
Assess Market Opportunities
Date Developed:
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AGROENTREPRENE January 2022
URSHIP NC II Developed by: Page 1 of 72
Assess Market Caren Grace Justo-
Opportunities Alibania
HOW TO USE THIS COMPETENCY BASED LEARNING MATERIAL
Welcome to this Competency Based Learning Material for the Module

ASSESS MARKET OPPORTUNITIES.
This learning material contains activities for you to complete. It covers the
knowledge, skills and attitudes required to complete the competency:
ASSESS MARKET OPPORTUNITIES one of the modules in the Core
Competencies for Agroentrepreneurship NC II.
You are required to go through a series of learning activities in order to

complete each of the learning outcomes of this module. In each learning
outcome, Learning Elements and Reference materials are available for your
further reading to assist you in the required activities. You are expected to
accomplish all the required activities and to answer the self- check after
each learning element. Please note that you need to have 100% correct
answers to each self-check to pass the activity. You are required to obtain
answer sheets, which are available from your trainer or at the end of each
learning element, to reflect your answers for each self-check. If you have
questions, please do not hesitate to ask your facilitator for assistance.
Recognition of Prior Learning (RPL)
You have acquired some or most of the knowledge and skills covered in this
learning material because you have:
 Actual experience on the job;

 Already completed training in this area.
So, if you can demonstrate to your trainer that you are competent in a
particular skill, you do not have to do the same training again. Or, if you feel
you have the skills, talk to you trainer about having them formally
recognized. You may also show Certificates of Competence from previous
training. And if you acquired skills are still updated/relevant to the module,
they may become part of the evidence you can present for RPL.
A Learner’s diary can be found at the end of this learning material. Use this
diary to record important dates, jobs undertaken and other workplace
events that will assist you in providing further details to your trainer or
assessor. Record of Achievement is also provided for your trainer to fill-in
upon completion of this module.
This module was prepared to help you achieve the required competency in
Agroentrepreneurship NC II. It will serve as a source of information for you
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to acquire required knowledge and skills for AGRI FISHERIES SECTOR, with
minimum supervision or help from your trainer. This material will aid you in
acquiring the competency at your own pace, independently. To achieve the
full benefit of this module.
 Talk to your trainer and agree on how you will both organize your
training on this unit. Read through the Competency Based Learning
material carefully. It is divided into sections which will cover all the
skills and knowledge you need to successfully complete this module.
 Most probably, you trainer will be your supervisor. He/She will be

there to support and show you the correct way to do things. Ask for
help if you need one.
 Your trainer will tell you about the important things you need to
consider when doing the activities. It is important that you listen and
take notes.
 You will have plenty of opportunities to ask questions and undergo

rigid practice. This will help you in achieving competency your new
skill. Sample practice will improve your speed, memory and even
confident.
 Talk with more experienced colleagues and ask for guidance.
 Answer self-checks at the end of end section to test your own

progress.
 When you finished each element and feel that you are ready,
demonstrate the activities outlined in the learning material to your
trainer.
 As you work through the activities, your trainer will be taking note of
your performance. He/She will be providing feedback on your
progress. Your readiness for assessment will be reflected in his/her
report, if and when you have successfully completed each element.
 When you have completed this module and feel confident that you
have had sufficient practice, you may request you trainer to arrange
an appointment with a registered assessor for your assessment. The
results of the assessment will be recorded in your Competency
Achievement Record.
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LIST OF COMPETENCIES
No. Unit of Competency Module Title Code

1. Assess Market Assessing Market AFF243301
Opportunities Opportunities
2. Establish Farm Establishing Farm AFF243302
Production Plan Production Plan
3. Handle Finances Handling Finances AFF243303
4. Market Produce Marketing Produce AFF243304
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UNIT OF COMPETENCY : ASSESS MARKET OPPORTUNITIES
MODULE TITLE : ASSESSING MARKET OPPORTUNITIES
MODULE DESCRIPTOR: The unit deals with the knowledge, skills and
attitudes required of farmer owner/agro entrepreneurs to conduct market
visits, determine value adding activities and prepare market plan.
NOMINAL DURATION : 40 hours
SUMMARY OF LEARNING OUTCOMES:

Upon completion of this module the students/trainees will be able to:
LO1. Conduct Market Visits;
LO2. Determine Value Adding Activities;
LO3. Prepare Market Plan
ASSESSMENT CRITERIA:
 Identify buyers in the local market following industry practice
 Interview buyers according to industry practice
 Select buyers based on the result of the interview
 Determine flow of produce farm to the selected buyer based on the
established industry practices
 Identify value adding activities based on requirements of selected
buyer requirements
 Compute comparative prices and cost of value adding activities are
computed based on industry practice
 Select value adding activities based on buyer’s requirement
 Prepare marketing objective according to the result of market research
 Select steps in the delivery of the product to and established buyers
based on objective set
 Estimate target sales, costs and marketing profit based on objective
set
 Formulate contingency plan based on market risks
 Compile marketing plan details according to industry procedure
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LEARNING OUTCOME # 1 Conduct Market Visits
CONTENTS:
 Local market buyers
 Procedures in conducting informal interview
 Basis for choosing buyers
1.1. Identify buyers in the local market following industry practice
1.2. Interview buyers according to industry practice
1.3. Select buyers based on the result of the interview
CONDITIONS:
The students/trainees must be provided with the following:
 Writing materials
 References
 Handouts
METHODOLOGIES:
 Modular self-paced
 Lecture/discussion
 Demonstration/role play
ASSESSMENT METHODS:
 Direct observation and questioning
 Demonstration
 Oral interview and written test

Learning Outcome#1: Conduct Market Visits
Learning Activities Special Instructions
1. Do not write anything on the

1. Read Information Sheet No. 1.1-1
module; provide extra paper in
on Identify buyers in the local
doing the Self-check.
market following industry practice
2. Answer the Self-check 1.1-1 Refer your answer to Answer Key
1.1-1.
on Procedures in conducting
informal interview
1.1-1.
5. Perform Task Sheet 1.1-1 on Evaluate your own performance using
Interview buyers Performance Criteria Checklist 1.1-1.
on Select buyers based on the
result of the interview
7. Answer the Self-Check 1.1-3 Refer your answer to Answer Key 1.1-
3

INFORMATION SHEET 1.1-1
IDENTIFY BUYERS IN THE LOCAL MARKET
Learning Objective:
After reading this information sheet you should be able to identify
buyers in the local market
INTRODUCTION:
Marketing is the process of planning and executing the conception,

pricing, promotion and distribution of your ideas, goods or services to satisfy
the needs of individual consumers or organizations.
Every business need to successfully market their products and

services. Marketing is a critical tool for establishing awareness, attracting
new customers and building lasting relationships. When done effectively,
marketing can help you increase sales and establish your competitive
advantage.
Marketing refers to all activities a company does to promote and sell

products or services to consumers. Hence, in the market where the
costumer and buyer meet.
Kinds of buyers:
a. Traders- is an individual who engages in the buying and selling

of financial assets in any financial market, either for themself or
on behalf of another person or institution. The main difference
between a trader and an investor is the duration for which the
person holds the asset. Investors tend to have a longer-term time
horizon, while traders tend to hold assets for shorter periods of
time to capitalize on short-term trends.
b. Trader agents- A trade agent is an entrepreneur who works as an

intermediary to connect buyers and sellers. Also referred to as
import-export agents or brokers, these professionals buy items
from a company and sell them directly to customers.
c. Institutional buyers- refers to a company or organization that

purchases very large quantities of food. Institutions can be public
or private, and most often include hospitals, schools, colleges, or
prisons. Hotels and corporation with cafeterias might also consider

themselves institutional buyers. Institutional buyers can be
distinguished from restaurants and grocery stores, however,
because they typically 1) purchase very large amounts of food,
often through a distributor, 2) have extra internal requirements,
especially public sector institutions that must announce bids for
contracts by following certain procedures, and 3) are likely to serve
food in a cafeteria setting.
Types of Institutional buyers
 Consolidators
 Processors
d. Wholesaler- is a person or company who sells products in bulk to
various outlets or retailers for onward sale, either directly or
through a middleman. Wholesalers are able to sell their products
for a lower price as they are selling in bulk, which reduces the
handling time and costs involved.
e. Retailer- is a person or a company who sells products directly to
their customers for a profit. The retailer may be the manufacturer
of the product, or may acquire relevant products from a distributor
or a wholesaler. The products they sell will be at a higher price
than they would be from a wholesaler, due to markups.
f. Local/public market- is made up of small independent
businesses, and each shop or stall is owner-operated. Rather than
one company selling every item, like you would find in a
supermarket, a public market features dozens of vendors selling
food and other products they made themselves.
g. Consumers- Consumers are defined as individuals or businesses
that consume or use goods and services. They are people or
organizations that purchase products or services. The term also
refers to hiring goods and services. They are humans or other
economic entities that use a good or service. Furthermore, they do
not sell on that item that they bought. They are the end users in
the distribution chain of goods and services. In fact, sometimes the
consumer might not be the buyer.
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SELF- CHECK 1.1-1
TRUE OR FALSE.
Direction: Write TRUE if the statement is correct and FALSE if the
statement is wrong. Write your answer in a separate sheet.
1. Market it is where the consumer and buyers never meet.

2. Wholesalers are able to sell their products for a lower price as they
are selling in bulk, which reduces the handling time and costs involved .
3. The retailer may be the manufacturer of the product, or may acquire
relevant products from a distributor or a wholesaler.
4. Selling is the process of planning and executing the conception,
pricing, promotion and distribution of your ideas, goods or services to
satisfy the needs of individual consumers or organizations.
5. Traders is an individual who engages in the buying and selling
of financial assets in any financial market, either for themself or on
behalf of another person or institution.
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ANSWER KEY 1.1-1
TRUE OR FALSE
1. False
2. True
3. True
4. False
5. True
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INTERVIEW BUYERS ACCORDING TO INDUSTRY PRACTICE
Learning objective:
After reading this information sheet you should be able to interview
buyers according to industry practice.
INTRODUCTION
Interviewing buyers are great opportunities to know and learn how
could a certain buyer be your partner in producing goods.
Interviewing buyers
Once the agripreneur has spotted the gaps in the market, conducted a
market visit, assessed seasonal supply and demand and identified the
buying conditions, they have to approach potential buyers for their
products. One way of interacting with buyers is by conducting interviews.
An interview involves an interaction between the agripreneur (the
interviewer) and the buyer (the interviewee). The agripreneur asks questions
about the market, products and customer needs and preferences and the
buyer replies.
Based on the type of questions that are asked, interviews may be
conducted in the following three ways:
 Structured interview with set questions;
 Casual and open interview with unstructured questions asked
in an informal setup; and
 Semi-structured interview, which is a combination of structured
and unstructured questions.
Due to the fact that most agri-businesses are informal in nature, your
extension client will most likely use a casual and open interview in an
informal setup.
As an extension agent, you can teach your agripreneur clients that the
following steps are usually followed when conducting an interview:
 Always start with a greeting;
 Explain to the respondent what the information will be used for
and point out the value of the interview;
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 Keep the atmosphere relaxed, even if you are conducting a
structured interview;
 Try to adopt the language of the interviewees;
 Make your questions clear, so that the respondent understands
exactly what is being asked; and
 It is important to keep the interview short.
If the respondent asks you not to reveal their identity, then you need
to be able to assure them that their identity will not be 125 Part of the New
Extensionist Learning Kit revealed. Conduct the interview and keep to
matters that are relevant to the research topic. Once the interview is done,
you can close it off by thanking the respondent for their time and
information. In Table 5 you will find guidelines on what to do and what to
avoid during interviews.
Table 5: Interview guidelines
PROCEDURE IN CONDUCTING INFORMAL INTERVIEW

What is an Informal Interview?
Informal interview are interviews that take place outside the
office in a casual setting, such as over lunch or coffee. It is not structured
like a traditional interview, although they typically have the same goal; to
determine if a candidate would be a good fit for a company. Informal
interviews are also sometimes used to assess whether a candidate is
interested in a joining a certain group.
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Characteristics of Informal interviewing
 The interviewer talks with people in the field informally, without use of
a structured interview guide of any kind.
 The researcher tries to remember his or her conversations with

informants, and uses jottings or brief notes taken in the field to help
in the recall and writing of notes from experiences in the field.
 Informal interviewing goes hand-in-hand with participant

observation.
 While in the field as an observer, informal interviews are casual

conversations one might have with the people the researcher is
observing.
When to use Informal Interviews

Informal interviewing is typically done as part of the process of observing
a social setting of interest.
These may be best used in the early stages of the development of an area
of inquiry, where there is little literature describing the setting,
experience, culture or issue of interest.
The researcher engages in fieldwork - observation and informal
interviewing - to develop an understanding of the setting and to build
rapport.
Informal interviewing may also be used to uncover new topics of interest
that may have been overlooked by previous research.
Recording Informal Interviews
Since informal interviews occur 'on the fly,' it is difficult to tape-record
this type of interview. Additionally, it is likely that informal interviews
will occur during the process of observing a setting.
The researcher should participate in the conversation. As soon as
possible, he or she should make jottings or notes of the
conversation. These jottings should be developed into a more complete
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account of the informal interview. This type of account would tend to be
included in the researcher's fieldnotes.
Developing fieldnotes soon after an informal interview is recommended.
Even with good field jottings the details of an informal interview are
quickly lost from memory.
Benefits
Interviews can be done informally, and 'on the fly' and, therefore, do not
require scheduling time with respondents. In fact, respondents may just
see this as 'conversation.'
Informal interviews may, therefore, foster 'low pressure' interactions and
allow respondents to speak more freely and openly.
SAMPLE OF BUYER INTERVIEW QUESTION

A. General buyer interview questions
Many hiring managers begin by asking general buyer position
interview questions. These questions can help them learn about you as a
candidate, your work ethic and whether you would be a good fit for the
company. Preparing for general questions may improve your chances of
sounding confident and accurately portraying your ability to negotiate with
suppliers. Below, we cover some of the most common general interview
questions for a buyer position:
1. What do you like most about being a buyer?

2. What part of your job do you find the most challenging?
3. Tell me about a time when you disagreed with your supervisor.
4. Describe your negotiation strategy.
5. Would you consider yourself to be an agreeable person?
6. What's your management style?
7. What skills do you think are essential for a buyer to have?
8. Why are you passionate about this industry?
9. What are your strengths and weaknesses?
B. Buyer interview questions about background and experience

Buyer interview questions may inquire about your education, previous
roles and qualifications. Your answer can be a good opportunity to elaborate
on the responsibilities you've had and highlight your interpersonal skills.

Here are several of the most common buyer interview questions and
answers:
a. To what extent do customer needs affect your purchasing

decisions?
b. Describe your proudest achievement as a buyer.
c. Describe an unsuccessful experience with a supplier.
d. How do you ensure clear communication in the workplace?
e. How do competitors impact your purchasing decisions?
f. How do you maintain long-lasting relationships with suppliers?
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TASK SHEET 1.1-1
Title: INTERVIEW A BUYER
Performance Objective: Upon formulating your own question.

Interview a buyer.
Supplies/Materials : paper, pen and tape

recorder/cellphone(optional).
Equipment : none
Steps/Procedure:
1. Formulate at least 10 questions for a buyer.
2. Select at least 3 buyer you want to interview.
3. Interview the buyers you selected.
4. Gather the information and come up with the result.
5. Present to your trainer your gathered information
Assessment Method:
Demonstration with Oral Question
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Performance Criteria Checklist 1.1-1
CRITERIA
Did you…. YES NO
1. Formulate at least 10 questions for a buyer?
2. Select at least 3 buyer you want to interview?
3. Interview the buyers you selected.?
4. Gather the information and come up with the
result?
5. Present to your trainer your gathered information?
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Information Sheet 1.1-3
SELECT BUYERS BASED ON THE RESULT OF THE INTERVIEW
Learning objective:
After reading this information sheet you should be able to select

buyers based on the result of the interview
INTRODUCTION
When selecting a buyer for a certain commodity, don’t just consider
the price, there are also factors that we need to consider. Your ability to
negotiate is significantly reduced as you defend and support the price
agreed to with that purchaser. Before this happens, perform due diligence
about the potential buyer and weigh the following factors:
1. Meet your financial exit goals.
On the surface, the offer price might seem like more than
enough to meet your goals. It's key to calculate what your net
proceeds would be after accounting for transaction costs, taxes and
debts that need to be paid.
Also consider that the initial offer is always the highest possible
price that you will receive from that buyer. During due diligence, the
buyer might find reasons to reduce the price. Make sure you have
enough of a cushion and have considered your net proceeds when
assessing the price.
2. Consider the transaction's structure.
The structure of a transaction can affects the amount of taxes
you will owe, the cash you'll receive at closing and the timing of your
transition from the business. If your goal is to exit the company at the
deal's closing with enough cash to retire, you may not want to enter
into an earnout transaction, which would pay you over time while
requiring you to work under the new owner for a period.
3. Understand a buyer's assumptions.
Once you accept an offer, the buyer will perform due diligence
on your company to confirm the assumptions that drove the price.
The buyer’s first goal in due diligence is to confirm the information
you provided. The buyer will then identify concerns about your
company that warrant reductions in the purchase price.
4. Weigh if the buyer can close the transaction.

Don’t put yourself and your business through intense due
diligence only to discover that the buyer is unable to close on the
transaction. In this economy, securing funding to purchase a
business is difficult.
If the buyer is relying on bank financing, get a commitment

letter from that institution before accepting the offer. Inquire about
the buyer’s history of successfully acquiring companies. You want an
experienced buyer rather than one with a history of getting cold feet at
the last minute.
5. Assess your readiness to move on.
Before you select a buyer and enter the sale process, consider if
you're personally ready for the transition. Are you emotionally
prepared to give up your business? Do you have a clear vision of what
you’ll do next? If you can answer yes to these questions, you'll
increase the odds of a successful sale and your smooth transition
from your business.
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SELF- CHECK 1.1-3
TRUE OR FALSE.

1. The structure of a transaction could not affect the amount of taxes you
will owe, the cash you'll receive at closing and the timing of your
transition from the business.
2. The buyer will then identify concerns about your company that
warrant reductions in the purchase price.
3. If the buyer is relying on bank financing, get a commitment letter from
that institution before accepting the offer.
4. Before you select a buyer and enter the sale process, consider if you're
personally ready for the transition.
5. In this economy, securing funding to purchase a business is easy.
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ANSWER KEY 1.1-1
TRUE OR FALSE
1. False
2. True
3. True
4. True
5. False
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LEARNING OUTCOME #2 Determine value adding activities
CONTENTS:
 Product flow and value addition
 Identify value adding activities
 Computation of sales, cost and profit
 Selection of value adding activities
1.1. Determine flow of produce from farm to the selected buyer based on
the established industry practice.
1.2. Identify value adding activities based on requirements of selected
buyer’s requirements
1.3. Compute comparative prices and costs of value adding activities
based on industry practice
1.4. Select value adding activities based on buyer’s requirement

METHODOLOGIES:
ASSESSMENT METHODS:
 Demonstration
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Learning Outcome#2: Determine value adding activities

on Determine flow of produce from Do not write anything on the module;
farm to the selected buyer based on provide extra paper in doing the Self-
the established industry practice. check.
1.2-1.
on Identify value adding activities
based on requirements of selected
buyer’s requirements

1.2-2.
on Compute comparative prices
and costs of value adding
activities based on industry
practice
3
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DETERMINE FLOW OF PRODUCE FROM FARM TO THE SELECTED
BUYER
Learning Objective:
After reading this information sheet you should be able to determine
flow of produce from farm to the selected buyer
INTRODUCTION:
Flow production is also known as continuous production. It enables a
product to be created in a series of stages on.an assembly line.
It is defined by the continuous movement of items through the

production process. Large numbers of the same goods are produced
continuously in this production process. There is often an opportunity for a
high level of automation on a flow production assembly line.
PRODUCT FLOW AND VALUE ADDITION

Product flow is the distribution channel that is viewed as a unified
system of interdependent organizations in which intermediaries work
together to build value as products proceed through the channel to the
consumer.
It is one of the simplest concepts for understanding because apart
from the above definition it can also explain the organized flow of the
products in the shopping stores. It can act as a guide for shoppers in
shopping for the various categories in the stores.
“Product Flow includes movement of goods from supplier to
consumer (internal as well as external), as well as dealing with customer
service needs such as input materials or consumables or services like
housekeeping. Product flow also involves returns/rejections (Reverse Flow).”
In a general industrial condition, there will be a manufacturer, supplier,
distributor, retailer, wholesaler, and consumer. This consumer can also be
an internal consumer in the same organization. For instance, a fabrication
store fabricates many types of raw steel into various building elements in
general machining, cutting, welding centers, and then assembles to order for
shipment to the customer. Flow in this plant is from an assembly/process
section to another with a relationship as a supplier and customer (internal).
The acquisition takes place at every phase from the previous phase along
with the whole flow in this supply chain.

Value added or Value adding refers to a process or step within a
process which transforms raw materials or work in progress into much more
valuable goods and services to customers downstream. It aims at increasing
its value per unit of material. An example of a value adding steps is the
processing of the ore bauxite to extract alumina, then the smelting of
aluminium from alumina and the extrusion of aluminium channel from
aluminium alloy billets. These are several value adding steps to arrive at the
final product which the customer values and is willing to pay for.
The amount of time spent on value adding activities in a process can be

compared to the total lead time or time it takes to fill a customer order. This
is sometimes referred to as the value added to non value added ratio. This
helps identify the proportion of time spent on non-value adding tasks or
steps in producing each unit of output that doesn't add value to customers.
This can then be used as a measure or metric to monitor continuous
improvement or lean initiatives in reducing the overall customer lead time.
When first analyzing a system or process, the value adding time can
sometimes be below 5% of the total lead time, this could present great
opportunity to improve or streamline the process reducing costs and
improving lead times to deliver all goods on time .
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SELF-CHECK 1.2-1
TRUE OR FALSE

1. Flow production is also known as continuous production. It enables

a product to be created in a series of stages on.an assembly line.
2. Product flow is the distribution channel that is viewed as a unified

system of interdependent organizations in which intermediaries work
together to build value as products proceed through the channel to the
consumer.
3. Large numbers of the same goods are produced continuously in
this
production process- flow production
4. Value adding refers to a process or step within a process which
transforms raw materials or work in progress into much more valuable
goods and services to customers downstream.
5. The amount of time spent on value adding activities in a process
can be compared to the total lead time or time it takes to fill a customer
order.
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ANSWER KEY 1.2-1
TRUE OR FALSE
1.TRUE
2.TRUE
3.TRUE
4.TRUE
5.TRUE
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IDENTIFY VALUE ADDING ACTIVITIES BASED ON REQUIREMENTS OF
SELECTED BUYER’S REQUIREMENTS
Learning Objective:
After reading this information sheet you should be able to identify
value adding activities based on the requirements of selected buyers’
requirements
INTRODUCTION:
What is a Value-Added Activity?

A value-added activity is any action taken that increases the benefit
of a good or service to a customer. A business can vastly increase its
profitability by recognizing which activities increase value and which do
not, and stripping away the non value-added activities. In most
organizations, there is a much lower proportion of value-added activities
than of non-value-added activities.
Value-added activity;
a. Cleaning- is the process of removing unwanted substances, such
as
dirt, infectious agents, and other impurities, from an object or environment.
Cleaning occurs in many different contexts, and uses many different
methods. Several occupations are devoted to cleaning.
b. Sorting- is any process of arranging items systematically, and has

two common, yet distinct meanings:
1. ordering: arranging items in a sequence ordered by some
criterion;
2. categorizing: grouping items with similar properties.
Ordering items is the combination of categorizing them based on equivalent
order, and ordering the categories themselves.
c. Packaging- is the science, art and technology of enclosing or
protecting products for distribution, storage, sale, and use. Packaging also
refers to the process of designing, evaluating, and producing packages.
Packaging can be described as a coordinated system of preparing goods for
transport, warehousing, logistics, sale, and end use. Packaging contains,
protects, preserves, transports, informs, and sells. [1] In many countries it is
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fully integrated into government, business, institutional, industrial, and
personal use.
d. Processing- is a series or set of activities that interact to produce a

result; it may occur once-only or be recurrent or periodic.
Agricultural processing means an industry for the processing of
agricultural products that are primarily produced on the agricultural
enterprise concerned, and includes the storage of the processed product and
where the agricultural processing activity is subservient to the dominant
agricultural use on the property and there is a rational relationship between
the processing and the produce of the agricultural enterprise and units in
the immediate vicinity of the property; and may include a winery, wine cellar
with associated tasting facilities, distillery, cheese making industry, dairy,
fruit ripening plant and food processing factory, but excludes the extraction
of resources such as bottling of water and sand mining;
e. Transporting- is the movement of humans, animals,
and goods from one location to another. In other words, the action of
transport is defined as a particular movement of an organism or thing from
a point A (a place in space) to a point B.
Modes of transport include air, land (rail and road), water, cable, pipeline,
and space. The field can be divided into infrastructure, vehicles,
and operations. Transport enables trade between people, which is essential
for the development of civilizations.
Transport infrastructure consists of the fixed installations,
including roads, railways, airways, waterways, canals, and pipelines and
terminals such as airports, railway stations, bus stations, warehouses,
trucking terminals, refueling depots (including fueling docks and fuel
stations), and seaports. Terminals may be used both for interchange of
passengers and cargo and for maintenance.
Means of transport are any of the different kinds of transport facilities
used to carry people or cargo. They may include vehicles, riding animals,
and pack animals. Vehicles may
include wagons, automobiles, bicycles, buses, trains, trucks, helicopters, w
atercraft, spacecraft, and aircraft.
g. Product consolidation
In business, consolidation or amalgamation is the merger and

acquisition of many smaller companies into a few much larger ones. In the
context of financial accounting, consolidation refers to the aggregation
of financial statements of a group company as consolidated financial
Date Developed:
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statements. The taxation term of consolidation refers to the treatment of
a group of companies and other entities as one entity for tax purposes.
The objective of product consolidation is to reduce the overall number
of parts and increase the number of preferred (higher volume/lower cost)
parts.
In doing so, one can increase order quantities. This will reduce the
part and material overhead costs

SELF-CHECK 1.2-2
Multiple choices:
Direction: Choose the letter of the best answer. Write the letter of your
choice on your answer sheet.
1. It is any action taken that increases the benefit of a good or

service to a customer.
a. Cleaning
b. Transporting
c. Value added activity
d. Product consolidation
2. It is the process of removing unwanted substances, such as dirt,
infectious agents, and other impurities, from an object or
environment.
a. Cleaning
b. Sorting
c. Product consolidation
d. Processing
3. It is a series or set of activities that interact to produce a result; it
may occur once-only or be recurrent or periodic.
a. Cleaning
b. Sorting
d. Processing
4. It is the merger and acquisition of many smaller companies into a
few much larger ones.
a. Cleaning
b. Sorting
d. Processing
5. It is the movement of humans, animals, and goods from one
location to another. In other words, the action of transport is
defined as a particular movement of an organism or thing from a
point A (a place in space) to a point B.
a. Cleaning
b. Transporting
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d. Processing
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ANSWER KEY 1.2-2
Multiple choices:
1. C
2. A
3. D
4. C
5. B
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COMPUTE COMPARATIVE PRICES AND COSTS OF VALUE ADDING
ACTIVITIES BASED ON INDUSTRY PRACTICE
Learning Objective:
After reading this information sheet you should be able to compute
comparative prices and costs of value adding activities based on industry
practice.
INTRODUCTION:
In a certain business, there is a need to compute the sales, costs and
profit earned in order to see if the business is going up or going down.
What is sales?
Sales are the full income for the year for selling goods. It is also
sometimes called revenue or sales revenue.
Cost of Goods Sold (or Cost of Sales)
Cost of goods sold refers to the cost of all the goods that we sold this
year. Cost of goods sold is commonly abbreviated as C.O.G.S. and is also
known as cost of sales. Cost of goods sold is an expense charged against
sales to work out a gross profit (see definition below).
So, for example, we may have sold 100 units this year at $4 each, and
these 100 units that we sold cost us $3 each originally. So, our sales would
be $400 and our cost of the goods we sold (cost of sales) would amount to
$300. This would result in a gross profit of $100 (sales minus cost of sales).
Cost of Goods Sold does not include general expenses such as wages

and salaries to office staff, advertising expenses, etc. It is simply the direct
costs of the inventory that we have sold during the year.
Gross Profit
Gross profit is an initial profit on the product we are selling, before

deducting general business expenses. Gross profit is calculated by taking
the sales and deducting the cost of goods sold from this.
The gross profit figure is seen as an indicator of how well a trading

business is managing its core business of buying and selling goods.

How to Calculate Gross Profit
Know whether your business is making money.
One of the most important financial concepts you'll need to learn in running
your new business is the computation of gross profit, and the tool you use
to maintain gross profit is markup.
The gross profit on a product is computed as follows:
Sales - Cost of Goods Sold = Gross Profit
To understand gross profit, it is important to know the distinction between

variable and fixed costs.
Variable costs are costs that change based on the amount of product being
made and that are incurred as a direct result of producing the product. They
include:
1. Materials used
2. Direct labor
3. Packaging
4. Freight
5. Plant supervisor salaries
6. Utilities for a plant or a warehouse
7. Depreciation expense on production equipment
8. Machinery
Fixed costs are generally more static in nature. They include:
1. Office expenses such as supplies, utilities and office telephones

2. Salaries and wages of office staff, salespeople, officers and owners
3. Payroll taxes and employee benefits
4. Advertising, promotional and sales expenses
5. Insurance
6. Automotive expenses for salespeople
7. Professional fees

8. Rent
Variable expenses are recorded as cost of goods sold. Fixed expenses are
counted as operating expenses (sometimes called selling and general
administrative expenses).
While the gross profit is a dollar amount, the gross profit margin is
expressed as a percentage. That's equally important to track, since it allows
you to keep an eye on profitability trends. This is critical because many
businesses have gotten into financial trouble with an increasing gross profit
that coincides with a declining gross profit margin.
The gross profit margin is computed as follows:
Gross Profit / Sales = Gross Profit Margin
There are two key ways for you to improve your gross margin. First, you can
increase your prices. Second, you can decrease the costs to produce your
goods. Of course, both are easier said than done.
An increase in prices can cause sales to drop. If sales drop too far, you may
not generate enough gross profit dollars to cover operating expenses. Price
increases require a very careful reading of inflationary rates, competitive
factors and basic supply and demand predictions for the product you're
producing.
The second method of increasing gross profit margin is to lower the variable
costs to produce your product. This can be accomplished by decreasing
material costs or making the product more efficiently. Volume discounts are
a good way to reduce material costs: The more material you buy from a
supplier, the more likely they are to offer you discounts. Another way to
reduce material costs is to find a less costly supplier, but you might end up
sacrificing quality if the purchased goods aren't made as well.
Whether you're starting a manufacturing, wholesaling, retailing or service

business, you should always be on the lookout for ways to deliver your
product or service more efficiently. However, you also must balance
efficiency and quality.
Let's look at the gross profit of ABC Clothing Inc. as an example of the
computation of gross profit margin. For Year One, sales were $1 million, and
the gross profit was $250,000 -- resulting in a gross profit margin of 25
percent ($250,000 / $1 million). For Year Two, sales were $1.5 million, and
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the gross profit was $450,000 -- resulting in a gross profit margin of 30
percent ($450,000 / $1.5 million).
It is apparent that ABC Clothing earned not only more gross profit dollars
during Year Two but also a higher gross profit margin. The company either
raised prices, lowered variable material costs from suppliers or found a way
to produce its clothing more efficiently (which usually means fewer labor
hours per product produced). ABC Clothing did a better job in Year Two of
managing its markup on the clothing products it manufactured.
Many business owners often get confused when relating markup to gross
profit margin. They are first cousins in that both computations deal with the
same variables. The difference is that gross profit margin is figured as a
percentage of the selling price, while markup is figured as a percentage of
the seller's cost.
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SELF-CHECK 1.2-3
TRUE OR FALSE

1. One of the most important financial concepts you'll need to learn in

running your new business is the computation of gross profit, and the
tool you use to maintain gross profit is markup
2. Fixed expenses are counted as operating expenses (sometimes

called selling and general administrative expenses).
3. There are two key ways for you to improve your gross margin. First,
you can increase your prices. Second, you can increase the costs to
produce your goods.
4. While the gross profit is a dollar amount, the gross profit margin is
also a dollar/peso amount
5. The second method of increasing gross profit margin is to lower the

variable costs to produce your product
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ANSWER KEY 1.2-3
TRUE OR FALSE
1.TRUE
2. TRUE
3.FALSE
4.FALSE
5. TRUE
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LEARNING OUTCOME #3 Prepare Market Plan
CONTENTS:
 Prepare Marketing Objective
 Steps in Product delivery
 Estimate target sales, costs and marketing profit
 Market risks and contingency plan
 Marketing Plan
1.1 Prepare marketing objective
1.2 Establish steps in the delivery of the product to selected
buyers
1.3 Estimate target sales, costs and marketing profit
1.4 Formulate contingency plan
1.5 Compile details of marketing plan

METHODOLOGIES:
ASSESSMENT METHODS:
 Demonstration
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Learning Outcome#3: Prepare Market Plan

1. Read Information Sheet No. 1.3-1 Do not write anything on the module;
on Prepare Marketing objective provide extra paper in doing the Self-
check.
1.3-1.
on Establish steps in the delivery
of the product to selected buyer

1.3-2.
on Estimate target sales, costs
and marketing profit
3
on Formulate contingency plan
4
on Compile details of marketing
plan
5
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PREPARE MARKETING OBJECTIVE
Learning Objective:
After reading this information sheet you should be able to prepare
marketing objective.
INTRODUCTION:
What are marketing objectives?
Marketing objectives are measurable goals that outline what the end
results of your marketing strategy should be. Their main purpose is to guide
your marketing efforts toward set milestones. The most effective objectives
should also align with your business plan and complement your overarching
business goals.
When the terms “marketing objective” and “marketing goal” are used
together, the biggest difference is the level of detail used for each one.
Marketing goals tend to be high-level, offering a broad view of what a
business hopes to achieve. Objectives are typically S.M.A.R.T. goals,
meaning that they’re specific, measurable, attainable, relevant, and time-
bound.
If your marketing goal is simply to increase brand awareness, your
objective should give some detail about how you’re going to do so.
Why are marketing objectives important?
In a survey of over 3,000 marketers, results showed that goal-setters
were 376% more likely to see successful outcomes. When you set marketing
objectives, you send your business in the right direction and can
consistently make decisions based on your company’s best interest.
Smart marketing objectives can also help you build your
organization’s efficiency. With your employees all aligned behind the same,
specific goals, your team will function like a complete unit organized toward
a clear direction.
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Objectives are also beneficial because they add a greater level of
accountability for your marketing team. Because this type of goal is highly
measurable, it naturally helps you produce key performance indicators
(KPIs) that tell if you’re working effectively or if changes need to be made.
Marketing objective examples
Now that you understand what a marketing objective is meant to do,
you may be wondering what an effective one actually looks like. Objectives
can take many forms, aiming to impact anything from lead generation to
conversion rates, but they should always check off each of the five
S.M.A.R.T. guidelines.
Here are a few effective examples of marketing objectives to help you start
brainstorming:
 To increase sales by 10% in one year by building relationships with
current and new customers on social media
 To attain 3,000 pre-orders by our new product’s launch date using a
three-month email marketing campaign
 To increase our customer acquisition rate by 5% in four months by
adding a search engine optimization (SEO) strategy to our content
marketing efforts
 To decrease our customer turnover rate by 10% in six months by
creating a loyalty program for our existing customer base
 To increase market share by 15% in 18 months by investing in
quarterly market research about our target audience
A good rule of thumb is to have 2-3 marketing objectives for your
company at any given time. This is enough to get your business rolling at a
good pace but not too much to keep track of.
Selecting your marketing objectives
With the examples above serving as inspiration, you can start to build
your own set of 2-3 results-producing objectives for your business. In this

section, we’ll guide you through the questions you can ask yourself to
ensure you’re creating marketing objectives that actually meet the
S.M.A.R.T. criteria.
1. Specific
In order for your marketing objectives to be specific, it needs to clearly
define what you’re setting out to do. As you’re brainstorming, ask yourself:
 What exactly do you want to achieve?
 Whose actions or behaviors are you trying to change?
 Are any stakeholders involved?
 Will your objective require digital marketing tactics or offline
marketing techniques?
2. Measurable
Once the foundation of your marketing objective becomes clear, you want to
make sure you can track your progress. The success of a measurable
objective can be supported by quantitative data, so you never have to second
guess whether or not you’re on the right track. Here are some questions you
can ask to set measurable marketing objectives:
 How do you know if you’ve completed your objective?
 What benchmarks do you need to meet to achieve your objective or
your broader business goals?
 Are you currently tracking any KPIs that could help you measure your
progress?
 Do you need to start tracking a new KPI to make your measurements
accurate?
3. Attainable
Just because you’d like to increase your profit margin by 3,000% in the
course of one month doesn’t mean it should be your objective. Your
marketing objective must be attainable, which means it must be feasible to
achieve — even if you’re trying to challenge yourself. This is because a
realistic objective will help you and your team members envision the path
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you need to take, whereas an idealistic one will end up hindering your
commitment and accountability. To keep your marketing objectives
attainable, ask:
 What resources do you need to achieve your objective?
 Do you have any budget or time constraints to work around?
 Do you have the proper equipment or software to reach your
objective?
 Do your employees have enough training or experience to help you
accomplish your objective?
4. Relevant
Most objectives take at least a month to achieve, which means you’ll be
putting in a significant number of resources toward it. A strong marketing
objective must be worth this effort. Otherwise, you may mistakenly set goals
that end up pushing you backward instead of forward. Here are questions
you can ask yourself to keep your objectives relevant:
 Does this marketing objective contribute to your overall business
objectives?
 Will this objective help your business grow?
 Do you need to accomplish another large milestone before this one is
possible?
 Can your resources be better used elsewhere?
5. Time-bound
Lastly, your marketing objectives should be tied to a specific time frame.
Setting a deadline is the best way to keep yourself accountable and on track,
as it puts a greater sense of urgency behind your goals. To set time-bound
objectives, ask:
 Given the current status of your KPIs and resources, how long would
it take you to achieve this objective?
 How fast could you achieve your objective if it were prioritized?

 Are there any business events or holidays that may slow you down?
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SELF-CHECK 1.3-1
Multiple choices:
Direction: Choose the letter of the best answer. Write the letter of your
choice on your answer sheet.
1. These are the measurable goals that outline what the end results of
your marketing strategy should be.
a. Marketing goal
b. Marketing objective
c. Both A & B
d. None of the above
2. These are the goals tend to be high-level, offering a broad view of what
a business hopes to achieve.
a. Marketing goal
b. Marketing objective
c. Both A & B
d. None of the above
3. Objectives are typically S.M.A.R.T. goals, meaning that they are?
a. Specific, Measurable, Attainable, Relevant, And Time-Bound
b. Specific, Measurable, Affordable, Relevant, And Time-Bound
c. Smart, Measurable, Attainable, Relevant, And Time-Bound
c. Smart, Measurable, Affordable, Relevant, And Time-Bound
4. Why are marketing objectives important?
a. Smart marketing objectives can also help you build your
organization’s efficiency.
b. Objectives are also beneficial because they add a greater level
of accountability for your marketing team
c. Both A & B
d. None of the Above
5. A good rule of thumb is to have ______ marketing objectives for your
company at any given time.
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a. 1-2
b. 2-3
c. 3-4
d. 4-5
6. It needs to clearly define what you’re setting out to do
a. Measurable
b. Time-bound
c. Attainable
d. Specific
7. Once the foundation of your marketing objective becomes clear, you want
to make sure you can track your progress.
a. Measurable
b. Time-bound
c. Attainable
d. Specific
8. It means this must be feasible to achieve — even if you’re trying to
challenge yourself.
a. Measurable
b. Time-bound
c. Attainable
d. Specific
9. A strong marketing objective must be worth this effort.
a. Measurable
b. Time-bound
c. Attainable
d. Relevant
10. Setting a deadline is the best way to keep yourself accountable and on
track, as it puts a greater sense of urgency behind your goals.
a. Measurable

b. Time-bound
c. Attainable
d. Relevant
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ANSWER KEY 1.3-1
Multiple choices:
1. B
2. A
3. A
4. C
5. B
6. D
7. A
8. C
9. D
10. B

ESTABLISH STEPS IN THE DELIVERY OF THE PRODUCT TO
SELECTED BUYER
Learning Objective:
After reading this information sheet you should be able to establish
steps in the delivery of the product to selected buyer.
INTRODUCTION:
You can make the best product in the world, but if you don't have a
delivery strategy for getting it to your customers, you'll end up with a fully
stocked warehouse and no incoming revenue. Product delivery should be
thoughtfully planned and executed and should fit into your company's
overall mission and marketing strategy.
Product Delivery Strategies
 Self-delivery: If your business has the resources and infrastructure,

you can get your products to your customers yourself. This strategy
will require a vehicle or a fleet of vehicles and a client base
reasonably close to home so you don't have to deliver too far afield.
 Third-party delivery: If you don't have the vehicles or the local

customer base necessary to self-deliver, you can contract with a
third-party freight company to make your deliveries for you. Be sure
to include the added cost in your pricing structure, either as part of
your price or as a separate invoice item. Using this model, you still
make the sale directly to the customer; you just have it delivered by
someone else.
 Distributors: When you sell through a distributor, an intermediate

business takes responsibility for both sales and delivery. This third-
party handle customer orders and fulfillment logistics. However, your
business still has to have a delivery strategy for getting your product
to the distributor. You might make and deliver products in a short
and time-sensitive window after customer orders have been placed,
or the distributor may order and hold your products as inventory.
Online Product Delivery Strategy

If you sell products online, your product delivery strategy will depend
on what you sell and whether you make it yourself or buy it from another
business. To get your own products to customers who order them via your
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website, you can either self-deliver or use a third-party service such as UPS,
FedEx or regular mail. Be sure to set realistic expectations about when your
customers can expect to receive their orders.
If you sell products that you procure from another business, you can
either keep inventory on hand or you can set up a drop-shipping
arrangement with your suppliers. Keeping inventory ties up financial
resources and precious shelf space, but this approach gives you extra
control over when your customers will receive their orders. Drop-shipping
arrangements allow you to simply forward your orders to your suppliers,
who fulfill them directly. You don't need to be involved in shipping logistics,
although you are still accountable if the order isn't received as expected.
Perishable Product Delivery Strategy
If the products you provide to your customers are perishable, your
delivery strategy will require an extra layer of logistics to fulfill orders while
products are still fresh, and you must also handle the items you sell under
the right conditions so they hold up well. If you offer bread that should be
eaten the day it is made, you'll need to bake early in the morning and then
send your loaves out for delivery as soon as possible. You won't need extra
infrastructure such as refrigeration, but your delivery schedule will be
extremely time sensitive.
If you provide refrigerated or frozen products, you'll need to keep them
sufficiently chilled while they are on route. You will also need to make sure
that your customers can receive them in a timely fashion and store them
properly once they are received. Use coolers or mechanical refrigeration
during delivery. Mark packages to inform customers of their perishability
and make arrangements in advance, if necessary, like communicating with
customers to make sure they will be home to receive their orders.
Customer Service and Delivery Strategy
When you're working to get your products into customers' hands,
customer service is a matter of making sure that your clients get what they
need when they need it. Your ordering platform should be smooth enough
for you to get the information you need about customer orders in a timely
fashion, and your systems for processing and packing orders should be
efficient and accurate. This includes communicating within your operation
about special needs and special orders and not promising more than you
can deliver.
Customer service for product delivery also includes keeping customers
informed about when to expect their orders and following up when
something does not arrive on schedule or when someone receives the wrong
order. Although managing mistakes can feel like a frustrating and tedious
part of a delivery strategy, your company can be redeemed in customers'

eyes if you go the extra mile to correct mishaps. In fact, if you show that you
are genuinely concerned and invested in correcting mistakes, you may even
create a more favorable impression than if the mistake had not occurred at
all.
Inventory and Delivery Strategy
There is a fine line between too much inventory and not enough
inventory. If you have too much, you may end up with product that you
can't sell taking up precious storage space. If you have too little, you run the
risk of not being able to deliver what customers need when they need it. A
product delivery strategy should include an answer to the question of
whether your business would rather err on the side of keeping your
warehouse amply stocked or on the side of running inventory low before
replenishing.
A lean inventory strategy relies on low levels of back stock and nimble
systems for replenishing if these levels become too low. These replenishment
systems include sophisticated communication to convey information about
what customers have ordered and what parts or products need to be
acquired. Such a system is also partial to vendors who can deliver goods
quickly because this reduces the risk of running out and being unable to fill
orders.
A robust inventory strategy relies on keeping plenty of product on
hand to fill orders. While it may seem like an obvious call to maintain
satisfactory inventory levels, especially if your products are not perishable,
this strategy presents the risk of having your cash tied up in parts and
products that sit on your shelves for months when you may need this
capital for more pressing matters, such as rent and payroll.
Delivery Strategy and Risk Management
An effective delivery strategy handles the risk management process by
developing systems, backup systems for the systems and backup systems
for the backup systems. Start by identifying all of the things that could go
wrong, such as a product not being ready on time or issues with
transportation, such as vehicle breakdowns and missed connections en
route. Next, map out a variety of contingency plans that can help you to
address each potential difficulty, including alternate procurement options
and delivery strategies.
You may never need to use these backup plans. However, if you have
them in place, you'll increase the odds of weathering difficult situations
gracefully and turning customers into repeat buyers. There are only so
many variables that you will be able to fully predict, but if you have a solid
understanding of what you can't foresee with adequate certainty, you'll
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increase the odds of having a protocol in place to field the inevitable
mishaps that can cost you money and customers.
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SELF-CHECK 1.3-2
TRUE OR FALSE

1. Product delivery should not be thoughtfully planned and executed

and should not fit into your company's overall mission and
marketing strategy
2. Self-delivery strategy will require a vehicle or a fleet of vehicles and
a client base reasonably close to home so you don't have to deliver
too far afield
3. Using this model, Third-party delivery, you still make the sale
directly to the customer; you just have it delivered by someone else
4. When you sell through a distributor, an intermediate business
takes responsibility for both sales and delivery.
5. When you're working to get your products into customers' hands,
customer service is a matter of making sure that your clients get
what they need when they wouldn’t need it.
Date Developed:
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ANSWER KEY 1.3-2
TRUE OR FALSE
1. FALSE
2. TRUE
3. TRUE
4. TRUE
5. FALSE
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ESTIMATE TARGET SALES, COSTS AND MARKETING PROFIT
Learning Objective:
After reading this information sheet you should be able to
estimate target sales, costs and marketing profit.
INTRODUCTION:
In a certain business, there is a need to compute the sales,
costs and profit earned in order to see if the business is going up or going
down.
What is sales?
Sales are the full income for the year for selling goods. It is also
sometimes called revenue or sales revenue.
Cost of Goods Sold (or Cost of Sales)
Cost of goods sold refers to the cost of all the goods that we sold this
year. Cost of goods sold is commonly abbreviated as C.O.G.S. and is also
known as cost of sales. Cost of goods sold is an expense charged against
sales to work out a gross profit (see definition below).
So, for example, we may have sold 100 units this year at $4 each, and
these 100 units that we sold cost us $3 each originally. So, our sales
would be $400 and our cost of the goods we sold (cost of sales) would
amount to $300. This would result in a gross profit of $100 (sales minus
cost of sales).
Cost of Goods Sold does not include general expenses such as wages and
salaries to office staff, advertising expenses, etc. It is simply the direct
costs of the inventory that we have sold during the year.
Gross Profit
Gross profit is an initial profit on the product we are selling, before
deducting general business expenses. Gross profit is calculated by taking
the sales and deducting the cost of goods sold from this.
The gross profit figure is seen as an indicator of how well a trading
business is managing its core business of buying and selling goods.
How to Calculate Gross Profit
Know whether your business is making money.
Date Developed:
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One of the most important financial concepts you'll need to learn in
tool you use to maintain gross profit is markup.
The gross profit on a product is computed as follows:
Sales - Cost of Goods Sold = Gross Profit
To understand gross profit, it is important to know the distinction
between variable and fixed costs.
Variable costs are costs that change based on the amount of product
being made and that are incurred as a direct result of producing the
product. They include:
1. Materials used
2. Direct labor
3. Packaging
4. Freight
5. Plant supervisor salaries
6. Utilities for a plant or a warehouse
7. Depreciation expense on production equipment
8. Machinery
Fixed costs are generally more static in nature. They include:
1. Office expenses such as supplies, utilities and office telephones
2. Salaries and wages of office staff, salespeople, officers and owners
3. Payroll taxes and employee benefits
4. Advertising, promotional and sales expenses
5. Insurance
6. Automotive expenses for salespeople
7. Professional fees
8. Rent
Variable expenses are recorded as cost of goods sold. Fixed expenses are
counted as operating expenses (sometimes called selling and general
administrative expenses).
While the gross profit is a dollar amount, the gross profit margin is
expressed as a percentage. That's equally important to track, since it
allows you to keep an eye on profitability trends. This is critical because
Date Developed:
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many businesses have gotten into financial trouble with an increasing
gross profit that coincides with a declining gross profit margin.
The gross profit margin is computed as follows:
Gross Profit / Sales = Gross Profit Margin
There are two key ways for you to improve your gross margin. First, you
can increase your prices. Second, you can decrease the costs to produce
your goods. Of course, both are easier said than done.
An increase in prices can cause sales to drop. If sales drop too far, you
may not generate enough gross profit dollars to cover operating expenses.
Price increases require a very careful reading of inflationary rates,
competitive factors and basic supply and demand predictions for the
product you're producing.
The second method of increasing gross profit margin is to lower the
variable costs to produce your product. This can be accomplished by
decreasing material costs or making the product more efficiently. Volume
discounts are a good way to reduce material costs: The more material you
buy from a supplier, the more likely they are to offer you discounts.
Another way to reduce material costs is to find a less costly supplier, but
you might end up sacrificing quality if the purchased goods aren't made
as well.
Whether you're starting a manufacturing, wholesaling, retailing or service
business, you should always be on the lookout for ways to deliver your
product or service more efficiently. However, you also must balance
efficiency and quality.
Let's look at the gross profit of ABC Clothing Inc. as an example of the
computation of gross profit margin. For Year One, sales were $1 million,
and the gross profit was $250,000 -- resulting in a gross profit margin of
25 percent ($250,000 / $1 million). For Year Two, sales were $1.5
million, and the gross profit was $450,000 -- resulting in a gross profit
margin of 30 percent ($450,000 / $1.5 million).
It is apparent that ABC Clothing earned not only more gross profit dollars
during Year Two but also a higher gross profit margin. The company
either raised prices, lowered variable material costs from suppliers or
found a way to produce its clothing more efficiently (which usually means
fewer labor hours per product produced). ABC Clothing did a better job in
Year Two of managing its markup on the clothing products it
manufactured.
Many business owners often get confused when relating markup to gross
profit margin. They are first cousins in that both computations deal with
the same variables. The difference is that gross profit margin is figured as

a percentage of the selling price, while markup is figured as a percentage
of the seller's cost.
SELF-CHECK 1.2-3
TRUE OR FALSE
1. One of the most important financial concepts you'll need to learn in
tool you use to maintain gross profit is markup
2. Fixed expenses are counted as operating expenses (sometimes
called selling and general administrative expenses).
3. There are two key ways for you to improve your gross margin. First,
you can increase your prices. Second, you can increase the costs to
produce your goods.
4. While the gross profit is a dollar amount, the gross profit margin is
also a dollar/peso amount
5. The second method of increasing gross profit margin is to lower the
variable costs to produce your product

Date Developed:
CBLM in
ANSWER KEY 1.2-3
TRUE OR FALSE
1.TRUE
2. TRUE
3.FALSE
4.FALSE
5. TRUE
Date Developed:
CBLM in
FORMULATE CONTINGENCY PLAN BASED ON MARKET RISKS
Learning Objective:
After reading this information sheet you should be able to
formulate contingency plan
INTRODUCTION:
What Is Market Risk?
Market risk is the possibility that an individual or other entity will
experience losses due to factors that affect the overall performance of
investments in the financial markets.
KEY TAKEAWAYS
 Market risk, or systematic risk, affects the performance of the entire
market simultaneously.
 Market risk cannot be eliminated through diversification.
 Specific risk, or unsystematic risk, involves the performance of a
particular security and can be mitigated through diversification.
 Market risk may arise due to changes to interest rates, exchange
rates, geopolitical events, or recessions.
Understanding Market Risk
Market risk and specific risk (unsystematic) make up the two major

categories of investment risk. Market risk, also called "systematic
risk," cannot be eliminated through diversification, though it can be
hedged in other ways. Sources of market risk include recessions, political
turmoil, changes in interest rates, natural disasters, and terrorist attacks.
Systematic, or market risk, tends to influence the entire market at the same
time.
This can be contrasted with unsystematic risk, which is unique to a

specific company or industry. Also known as “nonsystematic risk,” "specific
risk," "diversifiable risk" or "residual risk," in the context of an investment
portfolio, unsystematic risk can be reduced through diversification.
What's the Difference Between Market Risk and Specific Risk?
Market risk and specific risk make up the two major categories of
investment risk. Market risk, also called "systematic risk," cannot be
eliminated through diversification, though it can be hedged in other ways,
and tends to influence the entire market at the same time. Specific risk, in

contrast, is unique to a specific company or industry. Specific risk, also
known as "unsystematic risk", "diversifiable risk" or "residual risk," can be
reduced through diversification.
What Are Some Types of Market Risk?
The most common types of market risk include interest rate risk,
equity risk, commodity risk, and currency risk. Interest rate risk covers the
volatility that may accompany interest rate fluctuations and is most
relevant to fixed-income investments. Equity risk is the risk involved in the
changing prices of stock investments, and commodity risk covers the
changing prices of commodities such as crude oil and corn. Currency risk,
or exchange-rate risk, arises from the change in the price of one currency in
relation to another. This may affect investors holding assets in another
country.
How Is Market Risk Measured?
A widely used measure of market risk is the value-at-risk (VaR)

method. VaR modeling is a statistical risk management method that
quantifies a stock or portfolio's potential loss as well as the probability of
that potential loss occurring. While well-known, the VaR method requires
certain assumptions that limit its precision. Beta is another relevant risk
metric, as it measures the volatility or market risk of a security or portfolio
in comparison to the market as a whole. It is used in the capital asset
pricing model (CAPM) to calculate the expected return of an asset.
Contingency Planning
All businesses are vulnerable to some amount of risk. Contingency

planning can be effective in mitigating these risks
Contingency planning is defined as a course of action designed to
help an organization respond to an event that may or may not happen.
Contingency plans can also be referred to as ‘Plan B’ because it can work as
an alternative action if things don’t go as planned.
There are seven steps outlined for a contingency plan which are as
follows:
 Develop a Contingency Planning Policy Statement: This will
provide the authority and guidance necessary to develop the plan.
 Conduct the BIA (Business Impact Analysis): The BIA will help
to identify and prioritize information systems and components that

are critical in supporting the organization’s mission/business
functions.
 Identify Preventive Controls: Preventive controls are measures
taken to reduce the effects of system disruptions. They will
increase system availability and reduce contingency life-cycle
costs.
 Create Contingency Strategies: These are thorough recovery
strategies that ensure the system will be recovered quickly in case
of a disruption.
 Create an Information System Contingency Plan: This should
contain detailed guidance and procedures for restoring a system
after emergencies occur. These procedures will be unique to the
system’s security impact level and recovery requirements. Each
third-party vendor must be prepared for working within the bank’s
contingency plan during and after emergencies.
 Provide Plan Testing, Training and Exercises: Testing your
plan will ensure that recovery will be successful while training
prepares personnel so that they know how to act in case of
emergency and with regards to putting the plan into effect.
 Ensure Plan Maintenance: The plan should be updated regularly
to remain current with any changes made within the organization.
When you run a business, risk comes with the territory and can
occur in the form of accidents, natural disasters, financial risks, IT attacks
and more. Be sure you are prepared by providing comprehensive
contingency planning in your workplace.

SELF-CHECK 1.3-4
TRUE OR FALSE
1. Market risk is the possibility that an individual or other entity
will experience losses due to factors that affect the overall
performance of investments in the financial markets.
2. Market risk may arise due to changes to interest rates,

exchange rates, geopolitical events, or recessions.
3. The most common types of market risk include interest rate

risk, equity risk, commodity risk, and currency risk
4. Market risk, also called "nonsystematic risk," cannot be

eliminated through diversification, though it can be hedged in
other ways, and tends to influence the entire market at the
same time.
5. Marketing risks is defined as a course of action designed to

help an organization respond to an event that may or may not
happen.
Enumeration;
Direction: Enumerate the following;
1. Seven steps outlined for a contingency plan.
2. 4 Types of Market Risk.
3.
Date Developed:
CBLM in
ANSWER KEY 1.2-3
TRUE OR FALSE
1.TRUE
2. TRUE
3. TRUE
4.FALSE
5. FALSE
Enumeration;
1. Seven steps outlined for a contingency plan.
a. Develop a Contingency Planning Policy Statement
b. Conduct the BIA (Business Impact Analysis
c. Identify Preventive Controls
d. Create Contingency Strategies
e. Create an Information System Contingency Plan
f. Provide Plan Testing, Training and Exercises
g. Ensure Plan Maintenance
2. 3 Types of Market risks
a. interest rate risk,
b. equity risk,
c. commodity risk,
d. currency risk
Date Developed:
CBLM in
COMPILE DETAILS OF MARKETING PLAN
Learning Objective:
After reading this information sheet you should be able to compile
details of marketing plan
INTRODUCTION:
What Is a Marketing Plan?
A marketing plan is an operational document that outlines an

advertising strategy that an organization will implement to generate leads
and reach its target market. A marketing plan details the outreach and PR
campaigns to be undertaken over a period, including how the company will
measure the effect of these initiatives. The functions and components of a
marketing plan include the following:
 Market research to support pricing decisions and new market entries

 Tailored messaging that targets certain demographics and geographic
areas
 Platform selection for product and service promotion: digital, radio,
Internet, trade magazines, and the mix of those platforms for each
campaign
 Metrics that measure the results of marketing efforts and their
reporting timelines
A marketing plan is based on a company’s overall marketing strategy.
KEY TAKEAWAYS
 The marketing plan details the strategy that a company will use to
market its products to customers.
 The plan identifies the target market, the value proposition of the
brand or the product, the campaigns to be initiated, and the metrics
to be used to assess the effectiveness of marketing initiatives.
 The marketing plan should be adjusted on an ongoing basis based on
the findings from the metrics that show which efforts are having an
impact and which are not.
 Digital marketing shows results in near real-time, whereas TV ads
require rotation to realize any level of market penetration.

 A marketing plan is part of a business plan, which describes all of the
important aspects of a business, such as its goals, values, mission
statement, budget, and strategies.
Understanding Marketing Plans
The terms marketing plan and marketing strategy are often used
interchangeably because a marketing plan is developed based on an
overarching strategic framework. In some cases, the strategy and the plan
may be incorporated into one document, particularly for smaller companies
that may only run one or two major campaigns in a year. The plan outlines
marketing activities on a monthly, quarterly, or annual basis while the
marketing strategy outlines the overall value proposition.
How to Create a Marketing Plan
A marketing plan considers the value proposition of a business. The

value proposition is the overall promise of value to be delivered to the
customer and is a statement that appears front and center of the company
website or any branding materials.
The value proposition should state how a product or brand solves the
customer's problem, the benefits of the product or brand, and why the
customer should buy from this company and not another. The marketing
plan is based on this value proposition to the customer.
The marketing plan identifies the target market for a product or

brand. Market research is often the basis for a target market and marketing
channel decisions. For example, whether the company will advertise on
the radio, social media, through online ads, or on regional TV.
The marketing plan includes the rationale for these decisions. The

plan should focus on the creation, timing, and placement of specific
campaigns and include the metrics that will measure the outcomes of
marketing efforts.
7 Steps for a Successful Marketing Plan
People do business with people they know, like and trust – yet, 64% of
companies are at risk because of not having a well-developed sales and
marketing plan using this very simple concept. Having a plan and working
your plan is an important factor to healthy cash flow and company growth.
Date Developed:
CBLM in
Step 1 – Understand Your Market and Competition
If you try to sell something that people don’t want, they won’t buy it.
It’s that simple. A big mistake that many small business owners make is to
sell a product or service without first understanding the market and what it
wants (not what it needs). A profitable market consists of people who have
wants that are being unmet, so much so that they perceive the unmet want
as pain and will be eager to buy your solution (your product or service).
Step 2 – Understand Your Customer
Knowing your customer intimately is the first step to predictable sales

growth. Until you know first, who your customers are, secondly, what they
want, and third, what motivates them to buy, you can’t prepare an effective
marketing plan. Don’t confuse ‘wants’ with ‘needs.’ People don’t necessarily
buy what they need, but they’ll most always buy what they want. This is
often true
Step 3 – Market Niche Definition
This definition identifies the group of people, organizations, and issues

that your business is designed to serve. There’s nothing more destructive
than to pick a niche that you can’t communicate with or that costs a lot of
money to contact. Defining a specific niche allows you to focus and
maximize your marketing efforts. By demonstrating your specialty, you’ll
stand out from your competitors.
Step 4 – Develop Your Marketing Message
Your marketing message not only tells your prospect what you do but
persuades them to become your customer. Communications should relay
how you look, act and perform that differentiates you from everyone else.
You should develop two types of marketing messages. Your first marketing
message should be short and to the point. Some may call this your 10
second elevator pitch. It’s your response to someone who asks you, ‘So,
what do you do?’ The second type is your complete marketing message that
will be included in all your marketing materials and promotions.
Step 5 – Determine Your Marketing Medium(s)
Your marketing medium is the communication vehicle you used to

deliver your marketing message. It’s important to choose a marketing
medium that gives you the highest return on your marketing dollar (ROMD).
Date Developed:
CBLM in
This means that you want to choose the medium that delivers your
marketing message to the most niche prospects at the lowest possible cost.
Marketing activities may include direct contact and follow-up,

networking and referral building, public speaking, writing and publicity,
promotional events and advertising.
The trick is to match your message to your market using the right
medium. No good to advertise your retirement community using a fast-
paced, loud radio spot on a hip-hop radio station. This is a complete
mismatch of the market, message, and medium. Success will come when
there is a good match of these three elements.
Step 6 – Set Sales and Marketing Goals
Goals are critical to your success. If you haven’t written your goals,
you’re still just wishing for success. When creating your goals use the
SMART formula. Ensure that your goals are…
(1) Specific, (2) Measurable, (3) Achievable, (4) Realistic, and (5) Time
specific. Clearly state what you want and be realistic with current
resources.
Step 7 – Develop Your Marketing Budget
Your marketing budget can be developed several ways depending on

whether you want to be more exact or develop just a quick, initial number.
It’s good to start out with a quick-and-dirty calculation and then to support
it with further details. First, if you have been in business for over a year
and tracked your marketing-related expenditures you could easily calculate
your ‘cost to acquire one customer’ or ‘cost to sell one product’ by dividing
your annual sales and marketing costs by the number of units sold (or
customers acquired). The next step is to take your cost to sell one unit or
acquire one customer and simply multiply it by your unit sales or customer
acquisition goal. The result of this simple computation will give you a rough
estimate of what you need to invest to meet your sales goals for the next
year.
Five Essential Elements of a Marketing Plan for A Small Business
If you are planning to open your own small business, the first step is
to develop a business plan. The next step is to develop a marketing plan, as
all business plans should be paired with a strategy for marketing your

products or services. Marketing strategies vary in format, but they all have
the common goal of attracting and building relationships with customers.
The style is up to you, but it should include the following elements.
1. Marketing Goals and Objectives
You will need to develop realistic and measurable marketing goals that
cover a full calendar year and are aligned with your business plan. Common
goals in a marketing strategy include a targeted increase in products sold
and a growth in customers. Your strategy will help you achieve your goals.
As you develop it, you should factor in the type of products or services you
are selling, how and where you sell them, and the level of consumer
awareness surrounding your business.
2. Define Your Target Audience
Fully describe the characteristics of your potential customers, as well

as their media viewing habits. For example, some restaurants target
gourmets with an average income of over $100,000, while others focus on
providing affordable meals to individuals on a fixed income. Take the time to
define your audience and customers for your products or services, along
with their unique demographic characteristics, such as age range, marital
status, gender, race, income level, or education. This will also help you lay
out your plan for distinguishing yourself from your competition.
3. Research Marketing Tactics
There are more marketing tactics available today than ever before and
trying to determine which one is best for your business can be
overwhelming. Take the time to research all marketing vehicles, which range
from traditional (billboard, television, radio, newspaper, and magazine) to
digital (pay-per-click ads with Google, social media efforts with Facebook
and Twitter, etc.). A full understanding of these tactics will make you more
comfortable in selecting which ones are best for your business.
4. Plan Your Marketing Tactics
Once you have completed the research, select the tactics and
channels you will use to accomplish your goals and reach your target
audience. This could be determined by customer habits and should align
with your sales strategy. Be sure to also monitor your competition and stay
current with new tactics and channels that your target audience is using.
5. Develop Your Timeline and Budget
Date Developed:
CBLM in
Establish a timeline and budget for your marketing strategy that
reaches your audience throughout the year. It should include all scheduled
promotions for the entire year and a complete breakdown of their cost.
Examples of items in a marketing timeline include increased advertising
during the holiday season and a month-long promotion to boost sales.
It is also important to remember that a marketing strategy is not set

in stone. As your business grows and evolves, so will your marketing
strategy. Be on the lookout for courses, webinars, and articles to help stay
up-to-date with current trends.

SELF-CHECK 1.3-5
TRUE OR FALSE
1. A marketing plan is an operational document that outlines an
advertising strategy that an organization will implement to
generate leads and reach its target market
2. The marketing plan details the strategy that a company will not
use to market its products to customers
3. A marketing plan is part of a business plan, which describes all of
the important aspects of a business, such as its goals, values,
mission statement, budget, and strategies
4. The terms marketing plan and marketing strategy are often used
interchangeably because a marketing plan is developed based on
an overarching strategic framework
5. A marketing plan would not consider the value proposition of a
business.
Enumeration;
Direction: Enumerate the following;
1. 7 Steps for a Successful Marketing Plan
2. Five Essential Elements of a Marketing Plan for A Small Business
Date Developed:
CBLM in
ANSWER KEY 1.3-5
TRUE OR FALSE
1. TRUE
2. FALSE
3. TRUE
4. TRUE
5. FALSE
ENUMERATION
1. 7 Steps for a Successful Marketing Plan
 Step 1 – Understand Your Market and Competition
 Step 2 – Understand Your Customer
 Step 3 – Market Niche Definition
 Step 4 – Develop Your Marketing Message
 Step 5 – Determine Your Marketing Medium(s)
 Step 6 – Set Sales and Marketing Goals
 Step 7 – Develop Your Marketing Budget
2. Five Essential Elements of a Marketing Plan for A Small Business
a. Marketing Goals and Objectives
b. Define Your Target Audience
c. Research Marketing Tactics
d. Plan Your Marketing Tactics
e. Develop Your Timeline and Budget
Date Developed:
CBLM in
REFERENCES
 https://www.bbc.co.uk/bitesize/guides/zth78mn/revision/4#:~:text=Flow
%20production%20is%20also%20known,continuously%20in%20this%20production
%20process.
 http://www.leanmanufacture.net/leanterms/valueadded.aspx
 https://www.accountingtools.com/articles/2017/5/8/value-added-activity
 https://en.wikipedia.org/wiki/Cleaning
 https://en.wikipedia.org/wiki/Sorting
 https://en.wikipedia.org/wiki/Packaging_and_labeling
 https://en.wikipedia.org/wiki/Process
 https://www.lawinsider.com/dictionary/agricultural-processing?
cursor=CmQSXmoVc35sYXdpbnNpZGVyY29udHJhY3RzckALEhpEZWZpbml0aW9uU25
pcHBldEdyb3VwX3YyOSIgYWdyaWN1bHR1cmFsLXByb2Nlc3NpbmcjMDAwMDAwMG
EMogECZW4YACAA
 https://en.wikipedia.org/wiki/Transport
 https://en.wikipedia.org/wiki/Consolidation_(business)
 https://www.google.com/search?
q=what+is+product+consolidation&sxsrf=AOaemvKlvwWc3r3523eezBi8T2BekPqWm
g:1641880020433&source=lnms&tbm=isch&sa=X&ved=2ahUKEwisn4bb_6j1AhWHZ
d4KHYBmA4kQ_AUoAXoECAgQAw&biw=1094&bih=504&dpr=1.25#imgrc=JerHLBwu
7TsS0M
 https://www.accounting-basics-for-students.com/cost-of-goods-sold.html
 https://www.entrepreneur.com/article/226158
 https://www.podium.com/article/marketing-objectives/
 https://bizfluent.com/facts-6974700-product-delivery-strategy.html
 https://www.investopedia.com/terms/m/marketrisk.asp
 https://www.ncontracts.com/nsight-blog/contingency-planning-definition
 https://www.investopedia.com/terms/m/marketing-plan.asp
 file:///C:/Users/user/Downloads/GFRAS_NELK_M11-Agricultural_Entrepreneurship-
Manual.pdf
Date Developed:
CBLM in

CORE 1 - Assess Market Opportunities

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Competency-Based Learning Materials

Assess Market Opportunities

Welcome to this Competency Based Learning Material for the Module

You are required to go through a series of learning activities in order to

Recognition of Prior Learning (RPL)

 Actual experience on the job;

 Most probably, you trainer will be your supervisor. He/She will be

 You will have plenty of opportunities to ask questions and undergo

 Talk with more experienced colleagues and ask for guidance.

 Answer self-checks at the end of end section to test your own

No. Unit of Competency Module Title Code

CBLM in Date Developed:

MODULE TITLE : ASSESSING MARKET OPPORTUNITIES

NOMINAL DURATION : 40 hours

SUMMARY OF LEARNING OUTCOMES:

CBLM in Date Developed:

Learning Activities Special Instructions

1. Do not write anything on the

CBLM in Date Developed:

Marketing is the process of planning and executing the conception,

Every business need to successfully market their products and

Marketing refers to all activities a company does to promote and sell

a. Traders- is an individual who engages in the buying and selling

b. Trader agents- A trade agent is an entrepreneur who works as an

c. Institutional buyers- refers to a company or organization that

CBLM in Date Developed:

1. Market it is where the consumer and buyers never meet.

PROCEDURE IN CONDUCTING INFORMAL INTERVIEW

 The researcher tries to remember his or her conversations with

 Informal interviewing goes hand-in-hand with participant

 While in the field as an observer, informal interviews are casual

When to use Informal Interviews

SAMPLE OF BUYER INTERVIEW QUESTION

1. What do you like most about being a buyer?

B. Buyer interview questions about background and experience

CBLM in Date Developed:

a. To what extent do customer needs affect your purchasing

Performance Objective: Upon formulating your own question.

Supplies/Materials : paper, pen and tape

After reading this information sheet you should be able to select

CBLM in Date Developed:

If the buyer is relying on bank financing, get a commitment

Direction: Write TRUE if the statement is correct and FALSE if the

Learning Activities Special Instructions

4. Answer the Self-check 1.2-2 Refer your answer to Answer Key

It is defined by the continuous movement of items through the

PRODUCT FLOW AND VALUE ADDITION

CBLM in Date Developed:

The amount of time spent on value adding activities in a process can be

Direction: Write TRUE if the statement is correct and FALSE if the

1. Flow production is also known as continuous production. It enables

2. Product flow is the distribution channel that is viewed as a unified

What is a Value-Added Activity?

b. Sorting- is any process of arranging items systematically, and has

d. Processing- is a series or set of activities that interact to produce a

In business, consolidation or amalgamation is the merger and

CBLM in Date Developed:

1. It is any action taken that increases the benefit of a good or

Cost of Goods Sold (or Cost of Sales)

Cost of Goods Sold does not include general expenses such as wages

Gross profit is an initial profit on the product we are selling, before

The gross profit figure is seen as an indicator of how well a trading