APPLIED ENTREPRENEURSHIP differentiator against the competitors.
Keep it short and simple and think of a tagline that is
Quarter 3 – Week 5 & 6
Recognize and Understand the Market / Market Research
Value Proposition (VP) is a business or marketing statement that summarizes why a
consumer should buy a company's product or use its service. This statement is often used to
convince a customer to purchase a particular product or service to add a form of value to
their lives.
In creating Value Proposition, entrepreneurs will consider the basic elements:
 Target Customer
 Needs/opportunity
 Name of the product
 Name of the enterprise/company
There are many competitors in the market to establish superiority to them.
Entrepreneurs should think some alternative and how it works better. An important aspect
in Value Proposition must be truthful that will establish credibility to the consumers.
Example: Potential value proposition is most common in small businesses of your
locality.
Aling Charing Sari-sari Store open only from 6:00 am to 6:00 pm, but Aling Charing
noticed that there are customers who go nearby town to look for a convenience store at
around 10:00 pm to 6:00 am. She believes that this is a great opportunity for her store to
operate 24/7. In this example, proposed value proposition: “Charing Sari-sari Store, opens
24/7”.
The business describes sari-sari store – a basic retail store. The assurance from this
value proposition is because of the phrase “opens 24/7”, Aling Charing Sarisari Store opens
24/7, which make it different from other competitors.
Unique selling proposition (USP) refers to how you sell your product or services to
your customer. You will address the wants and desires of your customers.
Some tips for the entrepreneur on how to create an effective unique selling
proposition to the target customers:
 Identify and rank the uniqueness of the product or services character
 Very Specific
 Keep it short and simple (KISS)
As entrepreneur, present the best feature of your product or services that are
different from other competitors. Identifying the unique selling proposition requires
marketing research that you will learn from the other modules. In promoting your products
or services, make sure that it is very specific and put details that emphasize the
easy to remember. Right now, the proposed unique selling proposition: “Charing Sari-sari
Store, opens 24/7”.
Readers get confused between value proposition and unique selling proposition.
The two propositions are used to differentiate the products from competitors. For example,
Jollibee is known to have a Filipino taste burger. This brand has a unique selling point
because of its tagline “Langhap Sarap”.
Unique Value Proposition and Value Proposition are two most famous tools used to
explain why prospect customers buy each products and services. Based on each definition,
we learn that USP and VP are frameworks of each business industry. The two propositions
are valuable for the entrepreneurs.
A. Target Market
Market Targeting is a sage in market identification process that aims to determine
the buyers with common needs and characteristics. Prospect customers are market segment
that entrepreneurial venture intends to serve.
In targeting a specific market, it will exclude people even if it will not fit your
criteria. Rather, target marketing allows you to focus your marketing money and brand
message on a specific market that is more likely to buy from you than other markets.
Product is more affordable, efficient, and effective way to reach potential clients and
generate business.
Market Segmentation is the process of dividing the whole market of goods/services
in groups of people with similar needs.
Market segment refers to group of individuals, groups or organizations sharing one
or more similar characteristics that cause them to have relatively similar product needs and
buying characteristics.
Commonly used methods for segmenting the market are follows.
1. Geographic segmentation – the total market is divided according to the physical
features of a certain area.
a. Climate
b. Population Size
2. Demographic Segmentation – divided based consumers. This refers to
quantifiable and factual statistics of the population.
a. Gender
b. Age
c. Income
d. Profession
e. Education
f. Religion
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 g. Nationality
h. Civil Status
3. Psychological Segmentation- divided in terms for customers think and believe;
this refers to how consumer see and feel about themselves – hence psycho or “of the the
mind”.
a. Opinions
b. Behaviors
c. Lifestyle
d. Personality
4. Behavioral Segmentation- divided according to how customers behave when
buying a product.
a. Purchase Frequency
b. User Status
c. Usage Rate
d. Loyalty Status
e. Readiness
B. Customer Requirements
Customer requirements are the specific characteristics that the customers need
from a product or a service.
There can be two types of customer requirements:
1. Service Requirement
2. Output Requirement
Service Requirement: Intangible thing or product that is not able to be touched but
customer can feel the fulfillment. There are elements in service requirement like on-time
delivery, service with a smile, easy-payment etc. It includes all aspects of how a customer
expect to be treated while purchasing a product and how easy the buying process goes.
Output Requirements: Tangible thing or things that can be seen. Characteristic
specifications that a consumer expects to be fulfilled in the product. Costumer that will avail
services as a product, then various service requirements can take the form of output
requirements. For example, if the consumer hires a multi cab, then on-time arrival becomes
an output requirement. Customer buys gadgets (phone speaker), the specification like the
loudness and clarity are the output requirements.
B. Market Size
Market size is like a size of arena where the entrepreneurs will play their business. It
is the approximate number of sellers and buyers in a particular market. Companies are
interested in knowing the market size before launching a new product or service in the area.
In determining the market size, entrepreneur will conduct a strategic marketing research
from reliable sources using the following method.
First step is to estimate the potential market – approximate number of customers
that will buy the product or avail your services.
Second step is to estimate the customers who probably dislike to buy your product
or avail the services.
Third step is for the entrepreneur to estimate the market share, that means plotting
and calculating of the competitor’s market share to determine the portion of the new
venture. Market size become the most important if you ever need to raise funding for your
business.
Market Research
The Market Research or Marketing Research Process can be defined as the process
of gathering, analyzing and interpreting the information about the products or the services
to be offered for sale to the potential consumers in the market.
Data Collection is the most valuable tool of any type of research study. Inaccurate
data collection may cause mistakes and ultimately lead to invalid results.
There are different ways to collect the data. The most important methods you can
consider are surveys, focus group discussion and interviews.
 Surveys are the most common way to gather primary research with the use of
questionnaires or interview schedule. These can be done via direct mail, over the phone,
internet (e.g. Google) or email, face-to-face or on Web (e.g. Skype or Viber).
 Interview is one of the most reliable and credible ways of getting relevant
information from target customers. It is typically done in personal between the
researcher/entrepreneur and a respondent where the researcher asks pertinent questions
that will give significant pieces of information about the problem that he will solve.
 Personal interviews are the traditional method of conducting an interview. It
allows the researcher to establish relationship with potential participants and therefore gain
their cooperation. It generates highest response rates in survey research. They also allow
the researcher to clarify indefinite answers and when necessary, seek follow-up information.
 Telephone interviews are less expensive and less time consuming, but the
disadvantages are that the response rate is not as high as the face-to- face interview, but
considerably higher than the mailed questionnaire.
 Focus Group Discussions (FGD) is an excellent method for generating and
screening ideas and concepts. It can be a moderated group interviews and brainstorming
sessions that provide information on user’s needs and behaviors.
4 M’s of Production and Business Model
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 The most serious issues in the whole production system are the inputs and the
transformation process. Their quality determines the quality of the output. The factors
involved in the input and the production process are usually referred to as the Four M’s of
production, namely Manpower, Method, Machine, and Materials.
Manpower
Material OUTPUT
Machine
Method
Manpower. It is about the human labor force involved in the manufacture of
products. It is measured as the most serious and main factor of production. The
entrepreneur must determine, attain and match the most competent and skilled employees
with the jobs at the most appropriate time period. Educational qualifications and
experience, status of employment, numbers of workers required, skills and expertise
required for the job are some of the manpower criteria that must be highly considered by
the entrepreneur.
Material. This is about raw materials necessary in the production of a product.
Materials mainly form part of the finished product. Just in case the resources are below
standard, the finished product will be of unsatisfactory as well.
Machine. This discusses about manufacturing equipment used in the production of
goods or delivery of services.
Method. This discusses the process or way of transforming raw materials to finished
products. The resources undergo some stages before it is finalized and becomes set for
delivery to the target buyers.
Product Description. It is the promotion that explains what a product is and why it’s
worth buying. The purpose of a product description is to provide customers with details
around the features and benefits of the product so they’re obliged to buy.
Prototyping. A duplication of a product as it will be produced, which may contain
such details as color, graphics, packaging and directions. One of the important early steps in
the inventing process is making a prototype.
It is better to test your product prototype to meet customers’ needs and
expectations; and for your product to be known and saleable. Pretesting of the product or
service is similar to a sample of the product or service given to the consumer free of cost in
order that he/she may try the product before committing to a purchase.
Supplier. An entity that offers goods and services to another business. This entity is
among of supply chain of a business, which may offer the main part of the value contained
within its products. Certain suppliers may even involve in drop shipping, where they ship
goods directly to the customers of the buyer.
Value chain is a method or activities by which a company adds value to an item,
with production, marketing, and the provision of after-sales service. The main goal and
benefit of a value chain, and therefore value chain analysis, is to make or support a
competitive benefit.
A supply chain is a structure of organizations, people, activities, data, and resources
involved in moving a product or service from supplier to customer. The main objective of
supply chain management includes management of a varied range of components and
procedures, for instance, storing of raw materials, handling the inventory, warehousing, and
movement of finished product from the point of processing to the point of consumption.
Business model describes the reasons of how an organization creates, delivers, and
captures value in economic, social, cultural or other contexts. The development of business
model construction and variation is also called business model innovation and forms a part
of business plan.
It is a company's plan for how it will make revenues and make a profit. It describes
what products or services the business plans to manufacture and market, and how it plans
to do so, as well as what expenses it will incur.
There are important phases in developing your business model, namely; Identifying
the specific audience; establishing business process; recording a business resources;
developing strong value proposition; determining key business partners; and creating a
demand for today’s generation strategy and be open for innovations.
After developing a business model, we will proceed in developing a business plan.
To be able to successfully complete this module, you need to prepare a business plan and
operate your plan and finally keep records of your business transactions.
Business plan is an important tool for you to have an idea about the future of your
business. Your business plan will be your guide in the moment you will be implementing and
operating your business proposal.
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