ENTREP

MODULE
 ENTREPENEURSHIP
Entrepreneurship
 It is a proactive process of developing a business venture to make a profit.
 The capacity and willingness to develop, organize and manage a business
venture along with any of its risks in order to make a profit.
Additional Notes: Business is related to what one will do to create profit and
use that profit for his own self. A business is created out of curiosity and ideas
to help people. It creates an own brand and has many different versions.
While entrepreneurship is related to achieving self-satisfaction, having
contribution to the community, becoming known and creation of new value or
product
Service & Product:
Service means doing work for someone (ex. Cafeteria)
Product relates to the raw materials (ex: Pancit Canton)
Entrepreneurship as a self-employment decision
 Entrepreneurship is basically aimed to gear someone towards SELF-
EMPLOYMENT.
 Entrepreneurship generally pertains to engaging in small and medium-sized
business.
 A practicing entrepreneur has probably more bosses than he realizes.
Social and economic benefits of entrepreneurship
1. It produces more jobs that equate to an increase in National Income.
-People who are unemployed will have the opportunities to have a decent
occupation. Small or big businesses when established it produces jobs, when there
are jobs there are people to be employed. When there are employed it follows
production of goods or services and people who created these goods and rendered
services will have to be paid with salaries or wages thus, entrepreneurship creates
wealth not only for sellers, producers but the whole stakeholders in the economy.
The more the businesses the more the taxes and other fees that will be collected by
the government hereby increasing its budget which can be used to finance different
programs across all aspect in the country.
2. It amplifies economic activities of different sectors of society.
A simple eatery or bakery in a rural area and a water refilling station or laundry
shop in an urban area both ignite economic activity regardless of their business
scale. Such mentioned businesses stimulate buying and selling transactions (be it
on cash or credit basis) in an area making the economy alive and endure economic
trials.
3. It introduces new and innovative products and services.
The consistent introduction of new and innovative products and services in the
market are to be credited to the intellectuality, creativity and audacity exemplified
by entrepreneurs to seek opportunities and improve on them. The state of the art
facilities we see around us, the cutting edge technology used on our smartphones
which we devour today, game-changing transportation of any kind, artificial
intelligence, pioneering medical equipment and treatment procedures and even to
the on trend cosmetics products and healthy and nutritious foods.

4. It improves people’s living standards.

-We are taught that science makes work faster and easier, in the same manner
entrepreneurship provides us with our daily living necessities. We can run to the
karinderyas or sari-sari stores nearby when we need to eat or buy for our basic
needs. The salons will cater of our grooming. The book stores or schools supplies
stores will provide us with things we need for our education. The milk tea shops,
samgyup stores, amusement parks and restobars can take care of our leisure or
entertainment activities.
5. It disperses the economic power and creates equality.
-Monopoly is not good for the economy, hence, with the growing interest of people
to become entrepreneurs may eventually lead to the creation of more businesses.
Whereby, reducing the instance where gaining income is only limited to few
people while promoting equal opportunity for all interested party to earn.
6. It controls local wealth and balances regional wealth.
-Oftentimes, the abundance or scarcity of businesses in a particular place dictates
its economic standing. Entrepreneurship ensures that local resources are used
properly and benefits the locality at large. It will also warrant that growth and
development will not only be manifested on urbanized areas in the country.
7. It reduces social conflicts and political unrest.
-When there are no or only few businesses say a sari-sari or supermarket stores,
eatery, dental clinic or salons in your area accept that there will be a tight
competition among people living in your place. This scenario will happen because
such stores cannot supply all your needs. Moreover, it will push prices to rise
which will disadvantage the poor as the rich will have greater access to these goods
or services making the gap between the rich and the poor even bigger.

8. It elicits economic independence and capital formation.

-A country with more entrepreneurs is high likely to become financially
independent and less likely need the help of other countries. As borrowing from
other countries is not always free. We pay for the cost of borrowing, thus, having a
high level of foreign debt is discouraged and having good number of investments
or businesses is highly encouraged. This also applies to families, barangays and
cities. Entrepreneurship creates wealth instead of borrowing wealth.

Who is an Entrepreneur?
 The term entrepreneur has a French origin and was coined from the words
entre, which means “between,” and prendre, which means” to take.”
 An Entrepreneur is a unique individual who has the innate ability and
extraordinary dedication to establish and manage a business, acknowledging
all the risks and reaping its rewards.
 Like other vocations, being an entrepreneur is also a calling.-An
entrepreneur will only expect returns once he or she already added or created
value out of an opportunity.
Entrep Alert!
 There are so many business opportunities that most people neglect. Little do
they know that they only need courage and talent to be able to capitalize on
them.
Entrepreneurs vs. Managers

ENTREPRENEURS MANAGERS
future oriented now-oriented
thrive on chaos thrive on structure
personally responsible merely responsible
achieve attain targets
creator custodian
take risks seeks stability

Notable Filipino Entrepeneurs

1. Tony Tan Caktiong

Known to be the man behind the country’s famous bee, Tony Tan Caktiong is
another rags-to-riches story – from owning a small ice cream franchise, to heading
some of the Philippines’ most famous food chains. Born third of seven siblings,
Tony Tan Caktiong was from a poor family in China who immigrated to the
Philippines in hope that they may have a better life. His family helped each other
out, establishing a restaurant business in Davao which enabled young Tony to
study Civil Engineering in the University of Santo Tomas.
2. Henry Sy Sr.
Henry Sy was born in Xiamen, in China in October 1924. Henry Sy was not born
with the silver spoon in mouth. Since a toddler, he had aimed to become the best
businessman, so went to try his luck in other countries. At the age of 12, he went to
Philippines to change the miserable life of his father in a foreign country. He is
considered to be the best retail magnate who owned well-established 33 SM Malls.
He was also the bank magnate and owns a majority share in China and De-Oro-
EPCI bank. His story is one of the best and inspiring stories because he was the
best entrepreneur and built all SM Malls.He became the biggest banker as well as
richest man in Philippines surpassing both the Ayalas and Lucio Tan. Henry Sy
died at the age of 94. He died on January 19, 2019.
3. Socorro Ramos
Socorro Cancio-Ramos is the matriarch of National Book Store, the Philippines’
leading retailer of books, office supplies, and greeting cards -- a rare example of a
businesswoman who watched her efforts fail multiple times, then rose from the
ashes to succeed with one more try at the same venture.
Socorro or “Coring” as she is fondly called, was born into a family of shopkeepers
who were thrown into poverty after losing the family business. While working for
her brother-in-law, Coring met and fell in love with Jose Ramos. They got married
and the couple founded National Book Store in 1940. Unable to afford extra help,
she worked not only as manager but also as cashier, purchaser, saleslady, janitor,
and helper – all rolled into one.

SUCCESSFUL YOUNG FILIPINO ENTREPRENEURS

Leandro Legarda Leviste
Bilyonaryo Leandro Leviste, the son of Senator Loren Legarda with former
Batangas Governor Antonio Leviste, has no plans on staying under the shadow of
his parents. Leviste, being an achiever all his life, is included in the prestigious list;
Forbes 30 under 30. At the young age of 23, the company he founded, Solar
Philippines, has been generating hundreds of million dollars per year. Retelling his
success story, Leviste said that he saw the opportunity to start up a business in the
poor state of electricity in the Philippines, but remains to be one of the countries
with the highest rates in Asia. Using his savings, he set up Solar Philippines in
2013. He says, in terms of innovation, solar power is nothing new, the more
important thing to focus on is finding a business model that works, in the Forbes
Magazine write up.
Gian Scottie Javelona
At 19, Javelona launched the first mobile app for a school in the Philippines that
covers access to students' records and enrollment forms -- becoming a national
media celebrity in the process. He admitted he started out hacking his own school
systems. He now runs OrangeApps, a cloud-based platform where schools and
universities can manage multiple processes like student enrollment, grades, HR
and payroll.
Five Levels of Entrepreneurial Development (by: Action Coach)
The Self-employed
Self-employed persons are, simply put, not comfortable with the routines of a desk
job. They do not want to conform to a fixed working schedule. They want to do
things in their own way and start to feel agitated when controlled by the power-
that-be. While they can be self-sufficient, their tendency is to become too reliant on
themselves, which leads to exhaustion. They will eventually realize that a
successful business should work for them, not the other way around. If they realize
this, they can move on to the next level.
The Manager
In this level, entrepreneurs feel the need to step up and ask some help from the
people around them. They delegate and hire potential employees to do the work.
However, they may have the tendency to vet more people who do not know the
exact needs and requirements of the job, because entrepreneurs think that the battle
is in the scale and not the profitability. As a result, entrepreneurs may get frustrated
because the business does not go as planned, and some potential problems arise
from how employees operate. When they begin to realize this, entrepreneurs will
start knowing their employees better, assessing their strengths and their areas for
improvement. They will begin to create positions that match the requirements of
the business and the employees’ expertise. Entrepreneurs can now move on to the
next level.
The Leader
Entrepreneurs in this level already enjoy seeing their people flourish, stepping up
and producing great results with minimal supervision. Unlike before where they
are in charge of virtually everything, they can now sleep peacefully at night and
have more freedom and time for themselves. They already recognized key leaders
in their organization. In effect, these key leaders also enjoy the entrepreneurs’ trust
and are satisfied with the outcome of their careers. Entrepreneurs at this stage now
focus on the big picture and strategic direction of their business rather than in
generating sales and operating the business. At this point, entrepreneurs can now
move on to the next level.
The Investor
Investors look for more opportunities for their business to grow. They may either
purchase one or two businesses that can potentially add value to the company, or
sell their established business (as a franchise) to potential entrepreneurs. They will
delegate a suitable manager for such operations and will act as directors. When this
becomes successful, they will now become true entrepreneur.
The True Entrepreneur
True entrepreneurs, based on their experience, now aim for quality and excellence
in their work. They have fully learned, and continue to practice, a four-step process
of thinking:
1. Idealization - entrepreneurs dream enormously and desire to build an ideal
environment.
2. Visualization - entrepreneurs start to create plans to make the dream a
reality.
 3. Verbalization - entrepreneurs share their ideas with other people, knowing
that their vision is already occurring.
4. Materialization - this happens when the vision becomes a reality. In this
stage, true entrepreneur now have an income that keeps on multiplying even
if they do not put much effort.

What’s new?
-The world of entrepreneurship these days has already evolved, and new terms are
coined to suit an entrepreneur’s field or expertise. Here are some of them.
1. Technopreneur - an entrepreneur who puts technology at the core of his or
her business model.
2. Social entrepreneur - one who takes advantage of the country’s social
problems and turn them to profitable institutions with the intention of helping the
disadvantaged community rather than making a profit.
3. Intrapreneur - an entrepreneur in a large company or corporation who is
tasked to think, establish, and run a new big idea or project. Intrapreneurs are
usually the product managers or the business development managers of a company.
4. Extrapreneur - an entrepreneur who hops from one company to another
to act as the innovation champion, providing creative and efficient solutions.
Common Entrepreneurial Competencies
1. Proactive
-Entrepreneurs are reactive rather than passive. They address issues, problems, and
challenges before they come rather than when they already happened. They ensure
that proper research is done, the risk factors are assessed, and plans are executed
on a timely and most efficient way.
2. Agents of change
-Entrepreneurs are innovation champions. They see opportunities in hopeless and
complex situations. They are always enthused to improve and develop new
products and services and introduce them to the market. They don’t settle for
mediocrity and status quo.
3. Risk takers
-Entrepreneurs maxim is to take the risk and be successful. By taking risks,
entrepreneurs do not just grab opportunities left and right; they have to take into
consideration the potential various threats they may encounter. Entrepreneurs
calculate risk; if they think that there is a big chance of succeeding, they push
through with the venture and don’t let the opportunity pass.
4. Have a sharp eye for opportunities
-Entrepreneurs have the talent for recognizing an opportunity even by using the
macro level data only. They know how to assess the net cause and effect of an
opportunity and decide intelligently if a venture should be considered or not.
5. Sociable
-Soft skills such as effective communication skills, teamwork, dependability,
adaptability, conflict resolution, flexibility, leadership and problem-solving are one
of the most important competencies of entrepreneurs as these establish the
relationship with the most important assets of the company-its people and its
customers. Relationship management is the key for employee and customer
retention, which can be achieved by a sociable entrepreneur.
6. Networkers
-A networker knows the key people to connect with. Networking can be a very
intimidating task, for it takes a lot of guts to pull it off. Successful entrepreneurs
gain trust of their valuable network and maintain a long-lasting relationship with
them.
7. Decisive
-Entrepreneurs always have a decision about their business. They do not settle for
gray areas or unclear solutions. They do not leave an issue unsolved without a
disposition. They make sure that all aspects of their business have clear objectives
and strategies. Last, they base their decisions on scientific calculations backed up
by their experience and technical knowledge.
8. Balanced
-The minds of entrepreneurs should have a balance between the analytical and the
creative side. Their brains are always playing with “unique ideas” that no one has
ever thought of yet. Entrepreneurs always have “Eureka!” moments and enjoy
them.
9. Innovative
-The minds of entrepreneurs are rich with big ideas that can add value to their
existing business or could become a game changer in the industry or business
where they belong. They do not stop improving and thinking of new and
worthwhile ideas for their business.

Core Entrepreneurial Competencies

Leaders
-Successful entrepreneurs always have the heart of a leader. They should serve as a
source of inspiration for their employees. They must be very humble,
approachable, friendly, and also know how to listen to people’s concerns. Leaders
act on their responsibilities that were given to them. They use their strengths and
limitations to make the best of a situation. They must also be decisive and know
how to own up to their decisions. They know how to unite the team and bring out
the best in every employee.
Communicators
-Entrepreneurs know how to use all forms of communication to effectively share
ideas and address certain concerns with their customers or employees. Effective
communication not only provides people with a clear view of what the business
offers, they also help prevent mishaps in an organization. Communication channels
between entrepreneurs and their employees or customers should always be open to
ensure the smooth flow of operations in their business.
Specialists
-Entrepreneurs are experts in their chosen business. They are tactical and are very
keen with details. When asked about the specifics of their product or service, they
can easily answer without heavily relying on their people. They understand the
totality and specificity of their business. As a result, they can easily think of
innovating and improving the product or service offerings because they know their
intricacies. They enjoy being in action instead of being behind the scenes.

Problem solvers
-Entrepreneurs possess critical thinking skills and look at problems as challenges
or puzzles that they need to solve. They know how to handle issues in any area of
the business, be it finance, operations, or marketing. They listen to the plight of
their employees on certain problems involving their units, and come up with
strategic solutions. Entrepreneurs are able to solve problems by immersing
themselves in day-to-day activities, knowing what is happening in and out of their
business. Entrepreneurs should also be aware of their employees’ personalities;
they must know how and when to use them to help solve problems. Entrepreneurs
have faith that every problem has a solution no matter how hard it is. They must
also be courageous and know how to face the consequences of their decisions.
“There is nothing more beautiful than someone who goes out of their way to make
life beautiful for others.” - Mandy Hale

ENTREPRENEURSHIP vs EMPLOYMENT
 One question that may get ignored by many people looking to start a new
career, or simply entering the job market for the first time, is whether or not they
want to be an entrepreneur or an employee.
In fact, most people struggle with the difference between the two because
they only saw employment as the choice that was available for them. We are often
encouraged to find a great job, and many of us don’t think about creating our own
employment by becoming a business owner.
Knowing the difference between employment and business mind-set is
crucial to understanding which option would work better for you as an individual,
and how being an employee or a business owner can suit your own personality and
goals.
The technical definition of an entrepreneur is someone who “undertakes
an enterprise.” An entrepreneur is someone who starts a new organization – a
business, or takes on an existing organization with the intent to revitalize it.
Entrepreneurship most commonly manifests in the form of self-employment.
One of the biggest differences between self-employment and employment is
having more control.
Employment is a relationship between two parties, usually based on a
contract – one being an employer and the other being an employee.
The employee will contribute labor and expertise to an endeavor for the
employer and is usually hired to preform specific duties which are packaged
into a job. In this case, the employee has less freedom over their time and
earnings, as it is set by the employer and the organization they are working with.
On the other hand, being self-employed means having more freedom in
deciding the workload and work hours, as well as having less supervision in
terms of how the work is done.
If you are working as a contractor or an independent service provider, you
have the opportunity to decide what clients you want to take on, when you
work, and how you and your future organization (if you decide to expand your
business practice) operate.
Of course, being self-employed is not that simple. Once aspect that
differentiates entrepreneurship and employment is the amount of risk
incurred. An employee has a relatively low amount of risk. In most situations,
the employee is only responsible for his/her work responsibilities during the
designated business hours, and they are often entitled to certain benefits from
the organization. This form of employment is ideal for an individual who wants a
higher degree of stability and predictability within for their career.
Being an entrepreneur means taking on a challenge and working hard to
get through it.
“Getting a new career or building a business is never easy, and not
everybody will support you in your journey,” shares Bill Murray, an independent
financial planner. And he is right: with any business venture, it takes a while to
gain the knowledge, establish yourself as a business owner, and gain the reputation
to attract the clients. “
It can be a long process. They say every business needs at least 2-5 years to
grow and prosper and start getting significant return on investments; and I’m
talking about 2-5 years of dedication and hard work,” adds Bill. “But to be honest
with you, the results are worth the struggle.”

Summary of Pros and Cons of Entrepreneurship vs. Employment

Important
Entrepreneur
Career Factors
 Income generated
passively even when the
entrepreneur is resting
 Opportunity
income unlimited,
1. Income depending on the success
of the business
 Income only earned
when the business is
successful
 Provides jobs; is the
owner of the business and
conducts the talent
selection
 Fully responsible for
serving customers, making
the business
2. Hiring and profitable/sustainable, and  Fully dependent on
Firing, Organi providing employee
zational Setup, satisfaction.
and Major  Has the power to
Key Result disengage nonperforming
Areas employees applying the
due process policy of
disengaging personnel
 Can venture into
expansion of business
such as franchising and
buying other similar
businesses
 Performs all
necessary variable tasks to
establish and manage a
3. Daily startup business, which
Tasks usually takes most of
the entrepreneur’s time;
spend more hours on work
Employee
 Income generated
actively (i.e., on working
hours only); no work = no pay
 Income usually fixed
per month and increases
every year depending on
the employer and
the employee’s performance
 Income earned whether
the business is successful
or unsuccessful
 Seeks for a job; is the
one applying for a job and
is interviewed by
the company’s hiring officer
 Has the goal of satisfying only
the employer or the direct
supervisor
the employer’s performance;
is at risk of losing his or her
job if the company does
not perform well; may find
it difficult to just leave
their below par employer if
this is their only source of
income
 Can only work for the current
employer exclusively
 Has routine tasks and
works on regular or normal
hours
 Follows policies,
procedures, and memoranda
form the employer
 than a regular
employee and sometimes
gets no sleep
 Prepares
policies, procedures,
and memoranda for the
business
 Has a flexible schedule  Has a limited number
and can take unlimited of vacation days imposed
4. Leisure number of vacation days by the employer
Time and (applicable only if the
Vacations business has stabilized
already)

 Careers in Entrepreneurship
Entrepreneurship consists of vast career options depending on the passion and
field of interest of the entrepreneur. The saying “When you love what you do, it’s
as if you are not working” is very much applicable to entrepreneurs who consider
managing their business as enjoyment rather than working exhaustively.
Here are some of the most common small businesses in the Philippines.
 Rice retailing
 Online selling business
 Direct selling business
 Bar, café, and restaurant
 Printing business
 Laundry and dry cleaning business
 Water station and LPG station
 Cellphone loading business
 Street food business
 Spa, gym and nail care business
 Car wash and car care business
 Food cart business

No successful business started huge right away. A business starts with an

idea. Once the business is established, the business owner, the entrepreneur, can
choose to expand and explore franchising, intrapreneurship, and acquisition
(buying another similar business or a new business). Franchising is a business
arrangement wherein the franchisor, who is the owner of the business, acquires
distribution centers through the franchisees or the affiliated dealers.

Entrep Alert!
 Successful entrepreneurs love their job so much; it seems as if they are not
working.
In light of the 2015 ASEAN integration, which includes the opening of free
trade (high-quality products can be exported around the Southeast Asian region),
as an entrepreneur, you should also think of the global scale in creating your
products and providing excellent services to your customers. You should also
be given easier access to financial resources to help your business.
The 2015 AEAN Integration will change the way entrepreneurs establish
and run a business in the Philippines.

RECOGNIZING THE POTENTIAL MARKET

The Entrepreneurial Process
 it is a step-by-step procedure in establishing any kind of business that an
entrepreneur has to undergo. It is composed of four aspects.

1. Opportunity spotting and assessment

 Evaluate the identified opportunity

 Conceptualize and measure the opportunity
 Identify the perceived value of the opportunity to the company and the
customers
 Do cost-benefit analysis of the opportunity including risk analysis
 Match the opportunity with the entrepreneur’s skills and objectives
 Scan the strengths and weaknesses of competitors

2. Developing a business plan

 Come up with a business description and analysis

 Perform industry analysis
 Come up with the marketing plan
 Prepare the operations plan including the organizational plan
 Come up with the financial plan
 Identify strategies and tactics
 Perform monitoring and control

3. Determining the capital needed

 Calculate the intrinsic and extrinsic capital needed

 Calculate the existing capital
 Calculate the difference between the needed capital and the existing capital.
Choose the most cost-efficient suppliers or service providers
 Develop contact and relationship with suppliers and service providers

4. Running the business

  Practice leadership as a way of life
 Recognize critical success factors
 Identify existing and foreseeable problems and issues
 Employ risk-mitigating controls and monitoring systems
 Devise an expansion/sustainability strategy

SCANNING THE MARKETING ENVIRONMENT

This is the starting point of any new venture that involves understanding
and knowing the intricacies of the macroenvironment, microenvironment, and
internal environment.
With this process of scanning the general environment, an entrepreneur can
recognize various opportunities and at the same time understand thoroughly the
arena where then future business will operate.
The process of seeking, screening, and seizing is adapted to create the most
suited product or service for an opportunity.
The general rule is to find the opportunity first before coming up with a
new product or service, not the other way around. This is one of the mistakes
that budding entrepreneurs commit in starting a new venture.
“The credit belongs to the man who is actually in the arena; whose face is
marred with dust and sweat; who strives valiantly, who errs and may fall again
and again, because there is no effort without error or shortcoming.”
-Theodore Roosevelt

S1: OPPORTUNITY SEEKING

Let us deal with the 3S (Seeking, Screening, Seizing) of opportunity
spotting and assessment. This is the framework that most of the promising
entrepreneurs use to finally come up with the ultimate product or service. As a
framework, this is the usual process entrepreneurs go through until they finally
present to the customers what they can offer, whether good/s and/ or service/s.
Businesses evolve and adapt over time and having great ideas is the only first step
in a long journey to a viable venture.
Opportunity is an entrepreneur’s business idea that can potentially
become a commercial product or service in the future.
Opportunity Spotting and Assessment is how you access the environment,
it can be the location of the business or your skills and talent
In business, opportunity is simply an “idea”. It is the entrepreneur who
serves as the catalyst of creating value to customers because he is the one who
thinks of the said opportunity and turns it into a product or service, new or
innovated. And as a reward for being the catalyst, the entrepreneur earns profits

The first step in opportunity spotting and assessment is the most difficult on,
it is the S1 or Seeking Opportunity. It is thinking upon the idea, the most difficult
idea.
As previously mentioned, opportunities are ideas. And as you think and
look around you, there can be a lot of opportunities or ideas, hence, a lot of
products and/or services that can be offered. Entrepreneurs have endless
curiosity to discover new or different ideas and see whether these ideas will
work in the marketplace. In this step, the entrepreneur looks for options/ choices
for his business.
Essentials of Opportunity Seeking
1. Entrepreneurial Heart Flame
It is all about emotional intelligence or EQ, which is often manifested in the
entrepreneurs’ efforts to nurture relationships with customers, employees, and
suppliers. The entrepreneur also looks after the interests of his or her people by
motivating and encouraging them to be the best that they can be. This creates
caring culture within the organization that brings about synergy among the
people working toward a common vision.
2. Entrepreneurial Mind Frame
It allows the entrepreneur to see things in a very positive and optimistic light
in the midst of crisis or difficult situations. In fact, in Chinese writing, the word
crisis is composed of two characters. The first character means "danger"
while the second character means "opportunity". Passion is the great desire to
attain a vision or fulfill a mission. It is about wanting something so much that a
person would be willing to totally devote oneself to the quest. “…people with
passion can change the world for the better.” -Steve Jobs
3. Entrepreneurial Gut Game
 It refers to the ability of the entrepreneur to sense without using the five
senses. This is also known as intuition. The gut game also connotes courage or, in
the local dialect, “lakas ng loob” (strong intestinal fortitude).
There are many ways to uncover or discover opportunities. Some have to do
with looking at the big picture and noticing emerging trends and patterns.
Macroenvironmental sources can be one. Macroenvironment refers to the big
or macro forces that affect the area, the industry and the market which the
enterprise belongs to.
I. Macroenvironmental Sources
STEEPLED is a mnemonic for sociocultural, technological, economic,
environmental, political, legal, ethical and demographic factors. This
represents the general environment where the entrepreneur can identify
business opportunities from.

1. Sociocultural factors represent the general view of a locality’s traditions,

customs, beliefs, norms and perception. This aspect helps the entrepreneur
assess how a person behaves and reacts to marketing and selling activities.
For example, during this pandemic, because of our health consciousness, we
are inclined to buy various fruits and vegetables to keep us healthy.
In education, learning institutions shifted to online learning so students
opted to buy laptops/ Intern connection to continue their studies. It is the
general environment of the business and that environment’s tradition,
custom and beliefs.

Filipinos have an attitude towards imported goods/ services. That’s why we

like products such as chocolates and apparels from USA or other countries
believing they are “original”. Individuals also deemed it necessary to save,
invest or borrow especially during this time. Our attitude towards saving,
investing and borrowing were also reinforced. That’s why individuals and
banks are continuously serving their clients. We have emphasis on safety as
well. That’s why face masks, sanitizers and alcohols are already part of our
household staples. Due to religion and beliefs, a restaurant with dinuguan as
its specialty cannot thrive in Mindanao because it is a Muslim-dominated
place and Muslims doesn’t eat pork. (NOTE: Italicized words in this
paragraph are factors under sociocultural environment.)

2. Technological factors are composed of innovations of an existing

technology. The entrepreneur invests in new technologies but not limited to
advanced machineries/ equipment, new systems and processes. It is evident
that there has been increased usage of smartphones to disseminate important
information such as news, weather, traffic updates, social media, transport
service etc that is why companies keep on upgrading their mobile phone
products. Smart phones apps are also undeniably booming. It includes the
way we promote our products.
3. Economic factors (income, expenses, resources) directly affect any business
venture. Entrepreneurs need to achieve equilibrium on both supply and
demand. All the factors are employment rate, unemployment rate, and
income of expense.

4. Environmental or ecological factors are given premium by entrepreneurs

who desires not only to generate profits but also to save the planet and
prolong lives. There is a growing awareness in the world about our natural
resources, ecosystem, habitat, animals and plants. We can observe that
restaurants are no longer using straws to curb their carbon footprint.
Establishments are advocating the use of ecobags instead of the usual plastic
bags. Many are encouraging people to use tumbler instead of plastic cups.
We can also see advocates of banning single-use plastics. All of these are
geared towards a better, greener world. It is where the resources are raw
materials are being taken.

5. Political factors are mostly made by government policies and

administrations. It defines the governance system of the country or the local
area of business. The K12 was made possible by the Aquino Administration
while the Build, Build, Build Program is a continuing initiative of President
Duterte. While books and learning materials may have been the main goods
of K12 implementation of the former, the latter may have various
construction materials as its foremost products in the said infrastructure
project. Generally speaking, it includes the policies.

6. Legal factors are laws and regulations that can restrict or allow business
activities. With the community quarantine at hand, the IATF notified
businesses that may (skeletal or full capacity) or may not operate.
Businesses prior operations must acquire necessary permits, licenses and
approvals. Generally speaking, it includes the policies.

7. Ethical factors serve as an entrepreneur’s guide in morally running the

business. Advertising and sales practices are taken into account that’s why
prior television ads have to be ethical. Movies are rated by MTRCB so that
customers are aware and protected. Accepted accounting standards must be
followed. Sales must be completely reported to avoid tax problems. Strictly
speaking, kid products should be advertised for kids in a way that can be
applicable for kids and not for adults.

8. Demographic factors are the characteristics of the people. A

growing population needs a greater supply of prime commodities (rice,
fruits, vegetables, electricity, water etc). For senior citizens, adults and
babies, these categories may need different food supplements as they have
varying age distribution. Males and females (gender) have different wants/
needs. While females have to buy for make-up, males need not to. Elites can
book for a hotel suite while the middle class can only afford to stay in a
simple, twin room (social classes). Children of rich families can enter
 private schools while those who have enough may opt to go to the public
ones. A bigger family in number (family size) needs more food, water,
essentials etc. (NOTE: Italicized words in this paragraph are factors under
demographic environment.). This includes the characteristics of the people,
the growing population and the social class. The social classes are lower
class (no source of income), middle class (average income) and high class
(own a lot of cars and houses).

NEEDS AND WANTS

Let’s say that Keicee is hungry. He needs something to eat. He needs food.
Keicee wants a burger. Take note that his need became a want already because he
specified what he needs. However, Keicee only have PHP 5.00 in his pocket.
Keicee can only demand for a turon.
For an instance, Leni is thirsty. She needs something to drink. She needs a
drink. Leni wants a pineapple juice. Take note that her need became a want already
because she specified what she needs. She found out that she has Php 150 in her
purse. Leni can demand for a milk tea.
Take note that demand can increase or decrease depending on the
purchasing power of an individual.
II. Industry
It is the source of the business. Therefore an entrepreneur should be aware
of trends, new discovery and knowledge.
III. Futuristic Opportunities
An example is credit card which can be used in the future for sari-sari stores
and other markets.
IV. Micromarket
It includes the company, suppliers, marketing channel firms, target market,
competitors.
“Before the customer is won over, there is first a battle for the mind. Next,
there is a battle for the heart. Finally, there is a battle for the wallet.”
A. Competitors can also be another source of opportunity. Entrepreneurs can
innovate their existing products/ services and competitively position these
after. They are benchmark in creating our products.
B. Talents, hobbies, skills and expertise which is about loving what you do
C. Location
D. Customer Preferences, Interests and Perception
E. Unexpected opportunities are also a source. Who would have thought that
videos taken by closed-circuit televisions (CCTV) would make waves in the
news headlines as one of the best evidences in a crime?
 F. Business opportunities can also come from the entrepreneur. The
entrepreneur’s talents, hobbies, skills and expertise can be a profitable
opportunity. You can sell pastry products if you’re good at baking. You can
offer meals if you have the “chef” skills. You can sell your paintings and
crafts. You can put into sale the plants, fruits and vegetables you cultivated.
G. Entrepreneurs see opportunities in a problem/ irritant. High electricity bills?
Households are shifting now in using solar panels to save money in the long
run. Tired of uncomfortable public transportation? Transportation Network
Vehicle Services (Grab) are here. An example of irritant is the absence of
water filling station.
Methods of Generating Ideas
These are the methods that can be employed by the entrepreneur in
generating new ideas:
Have you ever heard FGD or Focused Group Discussion (FGD)? It is a
process of mining customer and noncustomer experience and insights about a
product/ service. In an FGD, the moderator handles an open, free-flowing and
in-depth discussion with a group of people. The participants talk about the
product/ service and provide suggestions/ comments to improve it. Through this,
we can generate our ideas, improve existing ideas and create new ideas. There is
the presence of facilitator and a mediator
We also have Brainstorming as another way to get novel insights. I think
you’re aware of this activity. It is solving a problem by sharing our ideas.This is
an undertaking that allows participants to share creative ideas with the rules:
 No destructive criticism.
 More ideas are preferred.
 Improvement of others’ ideas is allowed.

Next method is the Brainwriting or Internet brainstorming. This is exactly the

same with Brainstorming except that the channel used is not face-to-face, but in
writing or online. Results of this method usually take longer as the answers depend
on the participants’ availability in answering the questionnaire online. It is
writing through online
The last method is the Problem Inventory Analysis. This is similar with FGD
except that the participants are already given an inventory of product or
service problems. The participants will identify compelling problems about a
product/ service and give possible solutions. We state a problem, and offer a
solution.
S2 - OPPORTUNITY SCREENING

This is the process of cautiously selecting the best opportunity. The selection
will depend on the entrepreneur’s internal intent.

Internal Intent is the reason behind for the entrepreneur’s self while External
Intent is the reason behind for the customer.
 A. Internal intent
 This is the main objective that the business will accomplish in the
entrepreneur’s life. In simpler words, the entrepreneur’s internal intent is to
make his business profitable and sustainable in the long run.

B. Risk appetite
 This refers to the entrepreneur’s tolerance of business risks. An entrepreneur’s
risk appetite can be either risk taker or risk averse.
 Risk taker - one who likes taking risks
 Risk averse - one who dislikes/ avoids risks
 The higher the risk, the higher the return

C. Time
 Time is also of the essence. Time must be devoted to worthwhile opportunities.
Vision answers the question “Where will the business be?”

Mission answers the question “What is our business?”, “Why the business does
exists?”

USL VISION

USL is a global learning community recognized for science and technology

across all disciplines, strong research, and responsive community engagement
grounded on the CICM mission and identity for a distinctive student experience.

USL MISSION

USL sustains a Catholic academic community that nurtures persons for

community, church and society anchored on CICM’s Missio et Excellentia.

Take note that the vision statement is future-oriented while the mission
statement focuses at the present moment.

The entrepreneur should say “NO” to an opportunity if it does not contain any
of these business opportunity elements:

In S2, opportunity metrics are critical success factors. These are the following:
market potential, financial feasibility, management team and personal resources.

1. Has superior value to customers

2. Solves a compelling problem, issue, a need or want
3. Is a potential cash cow
4. Matches with the entrepreneur’s skills and resources

Market potential As an entrepreneur, ask yourself if there is a favorable

number of possible customers who might buy your
product or avail your service. Also, will this number of
 possible customers increase over the course of time?

Asking ourselves of the possibility of the possibility of

having customers or the number of customers will
increase.

It is important to consider the sales potential of the

products/ services you want to offer. Will the opportunity
Financial feasibility provide you profits? Does it have good chances of
expansion or growth?

Will there be profit? Will it increase or decrease?

Assess as well if your employees are truly dedicated,

driven and united. Are they highly skilled to provide
quality products/ services? Do they have industry and
technical experience? Are they willing to learn? Do they
possess utmost integrity?
Management team
Leading the employees because management is all about
motivating our employees. Motivation can impact
performance.

Even when you finished your objective when your

employees are unmotivated, you failed.

Evaluate your own self as the entrepreneur. Do I have the

drive to pursue this opportunity until the end? Am I
willing to spend time, effort and money to make this
opportunity work? Am I ready to sacrifice my existing
Personal resources lifestyle, endure hardship and forego my usual comforts to
succeed in this business opportunity?

Will I sacrifice my time, will I devote myself in the

business?
 With all of these taken into account in Screening Opportunity, out of the
numerous opportunities under S1 Seeking Opportunity, you must be able to filter/
scrutinize every detail and eventually, come up with a short list of a few very
promising opportunities.

S3 - SEIZING THE OPPORTUNITY

By now, the entrepreneur has an idea as to where he or she will locate the
business and how he or she will market the product/ service. This is the “pushing
through” with the chosen opportunity. Of course, the chosen opportunity is the most
profitable and feasible among other opportunities. After the long and rigorous
process, the entrepreneur is now ready to make the best out of the chosen opportunity.
We have chosen the opportunity and we are refining and beautifying it.

INNOVATION

It is the process of positively improving an existing product or service. It is

a key driver for economic growth. Innovation is inevitable as the word constantly
changes. Richard Branson said “Business opportunities are like buses, there’s always
another one coming.” Therefore, products and services must also adapt to these
changes as it is the only way to be ahead of others your competitors in particular.
Doing such benefits not only you but most importantly you customers and the society
at large.

TYPES OF INNOVATION ACCORDING TO THE DEGREE OF

DISTINCTIVENESS

1. BREAKTHROUGH INNOVATION - includes inventions, occurs infrequently

as these establish the platform on which future innovations in an area are
developed. (Internet, computer, airplane).

2. TECHNOLOGICAL INNOVATION - occurs more frequently than

breakthrough innovation, these are technological advancements of an existing
product or service (Wi-fi, laptop, jetplane)
3. ORDINARY INNOVATION - occurs ordinarily (adding twists in cooking a
meal, Telco providers changing their surfing/ call-and-text promos)

In the seeking process, one opportunity stood out from a number of sources.
This opportunity was tested according to its attractiveness and feasibility in the
screening process. The last process, called the seizing process, involves refining
and developing this opportunity. The refining process is called product or service
planning and development process. It has five key stages.

1. The idea stage is the phase where the entrepreneur determines what are the
feasible products and/or services that will perfectly suit the opportunity.
Feasible products and/or services must be of value to both consumers and the
entrepreneur. Market evaluation is usually carried out to assess whether new
product/ service ideas will be accepted by the market. Products and/or services
that are unappealing to the market should be eliminated at this stage. For example
an entrepreneur would want to take advantage of the mandatory wearing of face
mask as a health protocol. He may thought of offering washable face masks. It is
thinking of products in the business opportunity or which best fits the opportunity.

2. Once a product/ service has been identified and was seen to be acceptable, it will
go through the concept stage. The idea will undergo a consumer acceptance test
wherein the initial reactions of the primary target market will be taken into
account. Conversational interviews are conducted to understand consumer
preference on a product’s physical characteristics and attributes or a service’s
physical evidence and characteristics. Both favorable and unfavorable comments
will be used to devise/ create an acceptable product or service. For instance, the
market will be asked but not as to the idea of offering a washable face mask, the
kind of material to be used, its design, its price and its method of payment.
Consumer acceptance test is involved which is the asking of students and
customer. It is the initial deduction

3. For the next stage, product development stage, actual reactions from prospective
customers are determined. Actual product samples or actual services will be given
or rendered to the panel of potential customers. The participants’ task is to
critique the actual product or service and record both the positive and
negative qualities. To put into context, the actual washable face mask will be
presented by the entrepreneur to his/her consumer panel and the latter will give
their respective feedback. The actual washable face mask presented in this stage is
 the result after the entrepreneur considered the kind of material to be used, its
design, its price and its method of payment in the concept stage. The actual
product that will be presented in the business can be critiqued.

4. Test marketing stage is the last stage. This stage validates the work done from
the first three stages. This is the validation to measure the success of a product
or service. Actual sales results will be the foundation of the consumers’
acceptance level. This will also be the basis in commercializing the product or
service. The washable face mask, in this case, will be offered to the market. When
favorable sales are recorded, the said product is deemed profitable and can be
commercialized. Otherwise, there may either be a need to improve the product or
to go back in the first stage. It validates as it already tried to open the business, if
the profit is high, it is approved and if the profit is low and the expenses succeed
the income, it is not approved

5. Commercialization

 Actual opening of the business

Recognizing the potential market is really one of the most difficult tasks to do. It
involves tedious research and analysis to ensure success. This process is very crucial,
especially for budding entrepreneurs whose capitalization comes from hard-earned
money. They will not just let their fruits of labor be put to vain. Once the 3S of
opportunity spotting and assessment have been diligently done, the entrepreneur
should now be ready to prepare a comprehensive business plan that covers
marketing, operations, and financial plans.

“The entrepreneur always searches for change, responds to it and exploits it as an

opportunity.”

-Peter F. Drucker
THE MARKETING PLAN
After the comprehensive processes of seeking, screening, and seizing the
opportunity, it is now time for the entrepreneur to focus on the chosen business and dig
deeper. Entrepreneurs must write a business plan.
What is a Business Plan?
 It is a comprehensive paper that outlines the basic concept underlying a business
and describes how the concept will be realized--- specifically, what problem will be
solved. A business plan is an entrepreneur’s game plan to take the startup plunge.
The business plan should lay out your basic idea for the venture, where you are now,
where you want to go and how you intend to get there.
 It is the blueprint to keep the entrepreneur on the right track. It gives a sense of
purpose to the business. It provides guidance, influence, leadership and
communication of ideas, goals and means to the partners, employees and others.
Part of the business plan is the marketing plan. Before we define what is a marketing
plan, we have to define first what is marketing.
What is Marketing?
As defined by the American Marketing Association, It is the activity, set of
institutions, and processes for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners, and society at large.
What is a Marketing plan?
Marketing plan is a report that outlines your marketing strategy for the coming
marketing year, quarter or month. Typically, a marketing plan will include:
 An overview of your business’s marketing and advertising goals.
 A description of your business’s current marketing position.
 A timeline of when tasks within your strategy will be completed.
 Key performance indicators you will be tracking.
 A description of your business’s target market and customer needs.
Before focusing on the topics of value proposition and unique selling proposition, you
must first know the marketing process. In a nutshell, marketing is all about knowing
the customers. Therefore, the marketing process starts with identifying the customers'
needs where you are tasked to create a meaningful value proposition. Next, you study
what the customers want or desire for you to build a unique selling proposition. From
there, it is imperative to identify the most strategic market or group to tap.
What is Value Proposition?
 A value proposition simply states why a customer should buy a certain product
or avail a service.
 It is the major driver in customer purchase for service availment.
 It needs to be direct in addressing the problems of the customers and should
differentiate itself from the competitors.
Tips on creating effective Value Proposition
 Make your value proposition straight to the point. It must be concrete/specific.
There are no complications.
 Highlight the value of your product/ service.
 Adapt to the language of your market. Ensure that your target market
understands clearly what you are trying to say.
 Add credibility-enhancing elements. Include testimonials from customers,
partners or stakeholders. Several management certifications such as the ISO seal
and international/national accreditations can make your product/ service more
reliable/ trustworthy.
What is Unique Selling Proposition?
 This refers to how you will sell the product or service to your customers. After
creating your value proposition, you must figure out how to advertise or promote
your product/service.
 You can do this in promotion strategies, pricing, physical attributes or human
resources.
Tips on creating effective Unique Selling Proposition
 Identify and rank the uniqueness of the product/ service attribute. This will
compel customers to buy from you and not from your competitors. This will be
elaborated as I will walk you through the 7Ps or the Marketing Mix.
 Be very specific. Emphasize what makes your product/ service a different and a
better one. By being specific and honest, you don’t give your customers the
feeling that they are being fooled.
 KISS. Keep it short and simple.
Entrep Alert!
“The value proposition and the unique selling proposition will only work
effectively when customers feel the true benefits of the product/ service being offered.”
Know your Customers
After the general scan and research performed during the course of preparation for
the value proposition and the unique selling proposition, it is now time to dig deep and
understand the target customers through marketing research.
What is Marketing Research?
 It is a comprehensive process of understanding the customer’s intricacies and
the industry they revolve in.
 Results from the marketing research is an entrepreneur’s major investment as this
will lead him in designing the right marketing mix. To accurately describe your
customers, marketing research is the right tool to use.
What is Market Size?
It is simply the size of the area where the entrepreneur’s business will play. It
is the approximation of the total number or buyers and sellers in a particular
market. The entrepreneur is required to determine the market size first to gauge the
vastness of the market where he intends to join. So that he may assess if there is
customer potential or any established competitor/s.
What is direct/ indirect competitor?
 Amihan, Alena and Danaya are selling swords while Pirena is offering shields.
 Amihan, Alena and Danaya are direct competitors while Pirena is an indirect
competitor.
 Direct competitors offer the same products/ services.
 Indirect competitors don’t offer exactly the same product type but still compete
with the business indirectly.
What are Customer Requirements?
 Customers are the lifeblood of the business for without them, no business can
thrive. You can sell the best-tasting food, most fashionable apparels or latest
gadgets but without your customers, you cannot grow.
 Customer is always right is a mantra in business because their thoughts, feelings
and experiences shape the business.
 Customer requirements are specific features and characteristics that the
customers need from a product or service. For example, in buying shoes, some
would buy because of the style/color, some due to cheaper price, others because of
quality. In restaurants, some would go to carinderias for taste-like-home foods,
some go to fast food chains for fast service, others go to fine dining because of
cozy ambiance.
“We were young, but we had good advice and good ideas and lots of enthusiasm.”
-Bill Gates, Microsoft Corporation
PRIMARY AND SECONDARY TARGET MARKET

Most entrepreneurs believe in the misconception that they can serve all type of
customers or, if not, a wide range of customers. Little do they know that this thinking
may lead to failure. Entrepreneurs must focus only on customers whom they can serve
beneficially because they will be wasting resources if they will target all, or worse, target
none.

The entrepreneur can tap a primary target and a secondary target market as
resources are limited during the start-up stage. With this, the probability of success is
higher as the entrepreneur can focus to sell to the identified customer groups.

MARKET INTELLIGENCE

 This includes customer profiling which drives the entrepreneur on what correct
strategies and tactics to employ. This can only be obtained through a meticulous
market segmentation process.

MARKET SEGMENTATION

 It is the process of grouping similar or homogeneous customers according to

demographic, psychographic, geographic (location) and behavior.
 It is an entrepreneurial strategy designed primarily to divide the whole market into
smaller segments.
 Since the entire market cannot be readily served because the customers are
heterogeneous, the entrepreneur has to find ways to cater to homogeneous customers
only. This is usually done by market segmentation.

DEMOGRAPHIC SEGMENTATION

 It is also called socioeconomic segmentation.

 It is the process of grouping customers according to relevant socioeconomic variables
such as age, religion, gender, occupation, income range, social class and ethnicity.
 It is the most widely used and easiest method to segment the market.
 Dividing a market into groups based on demographic variables

SOCIOECONOMIC/DEMOGRAPHIC VARIABLES

1. In Gender and Age group, this is the reason why different milk brands cater to
different age groups. There are milk for babies, for adults and for senior citizens. Male
teenagers prefer or demands trendy clothes, rubber shoes, barber shops and gyms
while single females prefer or demands beauty products, bags, spa and beauty salons.

2. Religion and Ethnicity is also a factor. There are restrictions in various religions and
beliefs and as an entrepreneur, you have to consider this. Do not offer
products/services that doesn’t approve of their said beliefs. In a Roman Catholic
community, they celebrate Christmas so Christmas products are profitable. But in a
community which doesn’t celebrate it, do not do so.

3. Income and Social Class are other variables. These represent the purchasing power of
individuals which means that if one have higher income, most probably he belongs to
a higher social class. If one have lower income, most probably he belongs to a lower
 social class. Higher social classes especially the rich and the middle class to include,
can afford luxury while the lower class (unfortunate) can only afford the simplest, sad
to say. Some eat at carinderia due to limited budget, some at fast food chains because
of higher budget and some eat at fine dining simply because they can afford it.
Dividing a market according to income variable involves the high, middle and low
income. Companies target higher income groups with luxury good and convenience
services. While many companies target middle and low income groups with discount
stores.

4. Occupation must also be taken into account. We have the blue- and white-collar jobs,
respectively. Blue collar jobs are professions which require more of physical strength
while white-collar jobs demand for greater critical thinking skills. Make sure to
position effectively your products/ services to them. If there are a lot of businessmen
in your area, you can put up a coffee shop wherein they can meet their clients/
partners. If there are a lot of farmers, you can offer fertilizers. If there are a lot of
fishermen, you can offer boats/ motor. Factory foremen, doctors, taxi drivers,
engineers and teachers also determine what kinds of goods/ services will the buy/
avail.

PYSCHOGRAPHIC SEGMENTATION
 It is a process of grouping customers according to their perceptions, way of life,
motivations and inclinations.
 Psychographic segmentation is how marketers learn to position their products so
that compatible customers can “discover” them. It’s how brands find the right
customer match based on customer attitudes and lifestyles.
 You may not realize it, but psychographic segmentation is the primary driving
factor in your life.
 Psychographics deal with people’s attitude, values, personalities and lifestyles.
Psychographic segmentation identifies the different ways different people are
motivated.

PSYCHOGRAPHIC CATEGORIES
a. Self-achievers are goal-oriented and most pro-active when it comes to their
wellness. They stay on top on their health with regular check-ups, screening and
research
b. Balance seekers are also proactive but they like to weigh their options before
making decisions. Physicians are their useful resources but not their only sources.
c. Priority jugglers prioritize their families and others firsts but are often reactive
when it comes to their own health care. They may not take time to invest on their
own well-being
d. Direction takers look to their physicians and health care professionals for
guidance. But may not adhere to medical advice when it doesn’t fit with their
routine
e. Wilful endurers are the least engaged in their health. Resistant to change
unhealthy eating habits. They live for the moment and goes to the doctor when
absolutely necessary

1. Perception is a process wherein an individual receives an external stimulus using the

five senses: seeing, hearing, smelling, touching and tasting. Perception affects
consumer behavior in the sense that if we see an appetizing meal of a restaurant in a
 post, somehow we end up craving for it and ultimately buying it. If we see a
fashionable top, we also do the same. If we hear a bell, immediately, we think of ice
cream or ice drop. If we hear the tune of Nestle cart, immediately, we think of its
frozen products such as ice cream. If we hear “Taho!” being shouted, we knew that a
soy delicacy is coming right to us. We are into light materials when it comes to
fabrics that is why, we feel and touch first the material of the apparel as we fit it to see
if we are comfortable wearing it. That is the use of sense of touch. In tasting, of
course, we want mouth-watering and delicious meals. If the taste is not good to us, we
will not try that food again.

2. Motivation goes to the roots of customer’s needs and wants. This can either be
physiological or psychological. Physiological motivation includes the person’s needs
such food, shelter and clothing. Psychological motivation involves the person’s
preferences. His food can be those from fancy restaurants. His shelter can be a
condominium unit. His clothing must be branded. Psychological motivation focuses
on likes or dislikes.

3. Way of life is also a variable. You can live simply with the basic things around you or
the other way around. Whichever it is, there are goods/ services which an individual
buys/avails depending on his way of life. One can be contented with a phone and PC
while some prefers phone, tablets and laptops. Some eats vegetables and fruits while
some prefers meat.

4. Customers’ inclinations involve preferring one product over another as a result of

gaining a refreshing experience when using the product. Children often go to school
where they parents studied out of other good schools because of the quality education
they’ve got from the said institution. We do our grocery shopping in one mart we like
best. We buy our medicines from the pharmacy we trusted. We buy the shampoo our
hair feels out of other products. We dine at our favorite restaurant.

GEOGRAPHIC SEGMENTATION

 It is simply grouping customers according to their location.

 It can be as small as street, a barangay, a town, city, province or region.
 Area of residence affects how people buy goods and/or avail services.
 The starting point and the simplest point in segmenting the market.
 This segmentation helps the company in the market in a logical basis.

 Meat products especially are offered widely in Luzon and parts of Visayas. While in
other Visayan areas and the Mindanao, this good can be offered because of religious
beliefs. As you can see, geography encompasses the culture and lifestyle of people
and it can say what are the only feasible goods/ services in a certain location.
 In Baguio and Tagaytay, bulalo and nilaga can be profitable specialties because of the
cold weather residents experience.
 In Tuguegarao City, people love pansit batil patong and cold desserts are also a thing.

BEHAVIORAL SEGMENTATION
 It is the process of grouping the customers according to their actions. These behaviors
are activated occasions, desired benefits, loyalty and usage of products and services.
 To that end, the entrepreneur need to study the customers’:
a.) attitude toward his/her product, service, or brand in general
b.) use of your product or service and response to that service
 c.) overall knowledge of your brand and products
d.) purchasing tendencies
BASIS
1. Buyer’s purchase decision role – initiator, influencer, decider, buyer and user
2. Product or Brand usage
3. Occasions – examples are Valentine’s Day
4. User Status – first time users, regular users, former users, potentials users and non-
users. A non-user may turn into first-time user into a regular user through the
family cycle or influence.
5. Usage Rate – light, medium or heavy users.

1. Occasions massively affect our buying behavior. As Filipinos, we are fond of

celebrations. We buy gifts for the holidays. We become extra special on Valentine’s Day.
Birthdays and graduations entice customers to go to buffet restaurants or hotels or resorts
to celebrate. Barangay and town fiestas are also big. We prepare a lot of foods and
festivities. Ten various viands, for an instance, is still few for us when there is something
to celebrate. The karaoke is reserved a month or a week before the event. During these
times, it’s as if we have unlimited purchasing power.
2. Using customer’s desired benefits helps the entrepreneur determine the exact needs of
the customer. Wash and dry services are old. Wash, dry and press is the new normal.
Haircut is out. Haircut with free massage is in.
3. Loyalty is the result of maintain satisfied customers. An entrepreneur’s goal is to
inform, persuade, and remind customers to buy the good/ avail the service consistently.
Loyalty programs and rewards are created to get customers buy/ avail from us only.
According to Richard L. Oliver, it is a deeply held commitment to re-buy or re-
patronise a preferred product or service in the future despite situational influences and
marketing efforts having the potential to cause switching behaviour.
George H. Brown divided the brand loyalty status into four groups:
a. Hard Core Loyals – buy the same brand all the time
b. Split Loyals – loyal to two or three brands
c. Shifting Loyals – loyals who shift from one brand to another
d. Switchers – show no loyalty to any brand.
4. Usage of products or availment of service describes to the entrepreneur how often a
product is being used or the service is being availed. There can be customers who can be
considered light users, medium users and heavy users depending on their purchase and/or
availment frequency. When it comes to rice, fruits and vegetables or to prime
commodities, many of us buy often. Chocolates, sweets and pasta are not bought just
sometimes.
TECHNOGRAPHIC SEGMENTATION

 It is a market research analysis tool used to identify and profile the characteristics and
behaviors of consumers through the process of market segmentation. Traditionally
market researchers focused on various demographic, psychographic, and lifestyle
schemes to categorize and describe homogeneous clusters of consumers that comprise
possible target markets. With the advent of personal computers and home video in the
late 1980s and the explosion in Internet use, personal digital assistants, BlackBerries,
video games, cell phones, etc. in the 1990s, information and communication
 technologies have emerged as a central focus and defining force in a wide range of
occupations and lifestyles.
 Technographic segmentation was developed to measure and categorize consumers
based on their ownership, use patterns, and attitudes toward information,
communication and entertainment technologies.
 The concept and technique was first introduced in 1985 by Dr. Edward Forrest in a
study of VCR users, it was elaborated upon in the article "Segmenting VCR Owners"
published in the Journal of Advertising Research. The article suggested that the
profiling of technology consumers "should be based on an amalgam of variables
which might best be referred to as 'technographic'... which focuses on the
motivations, usage patterns, attitudes about technology... as well as measures of a
person's fundamental values and lifestyle perspective."
MARKET AGGREGATION

Market aggregation happens when an entrepreneur prefers to deal with a broader

market because the product/service he offers such as rice, bread, fruits, vegetables,
haircut and transportation is suited for an undifferentiated market. Meaning, all or almost
all, regardless of segments, need these goods/ services.

TALKING TO YOUR CUSTOMERS

 Important market information can only be obtained by conducting a good market
research. The more the entrepreneur knows about his relevant market, the more
customers can be properly segmented and reached, products can be positioned, brands
can be promoted, prices can be set and locations can be selected.

 Qualitative research includes identifying the written or spoken opinions of

customers.
 Quantitative research involves analyzing the customer’s preferences by
using statistics (such as those in surveys).

THE INTERVIEW
 It is one of the most reliable and credible ways of getting relevant information from
the target customers. Why do we say so? Because it is a face-to-face contact
between the researcher/entrepreneur and a respondent. The interviewer is the one
asking questions while the interviewee is the one responding/answering to it. The
interview can be: structured or unstructured.
 A structured interview employs a specific set of questions such as
questionnaires answerable by yes or no, multiple choice and choose-the-best.
This means to say that the interviewer before facing the interviewee, have
already prepared his/her queries. This produces quantitative data.
 An unstructured interview is an informal type of interview and does not follow a
specific set of questions. The interviewer may ask all possible questions until
he is satisfied and the respondent can answer freely. The interviewer usually
records the conversation, reviews it and summarizes the findings. This produces
qualitative data

THE FOCUSED GROUP DISCUSSION

 It is commonly used to capture qualitative results. As previously discussed, it is a
process of mining customer and noncustomer experience and insights about a specific
product/service.
 ⫸With FGD, the entrepreneur is able to gather customers’ views towards a good/
service, perceptions and impressions on new product/service, innovations of older
product/ service, suggestions on promotions and pricing and initial feedback on
advertisements. The FGD is led by a moderator whose task is not that of an
interviewer who asks questions rather he encourages the participants (should be
homogeneous as much as possible) to talk about listed topics prior the FGD. He
ensures that all angles are covered; the discussion doesn’t go far from the topics and
avoids biases and unnecessary reactions. If actual product is shown or actual
service is performed, the FGD can be an effective way to elicit realistic reactions
from the participants and the entrepreneur should pick the most relevant insights
from them.
 The FGD includes the following: objectives (purpose on why the FGD is conducted);
participants (what is the total number and on what market segment do they belong);
venue and logistics (where will the FGD be conducted and what food/resources needs
to be prepared); and moderator (who will conduct the FGD).

OBSERVATION
It is one of the preferred and practical methods of generating ideas because the
researcher marks the behavior of the people or of objects or of events without necessarily
requiring them to participate in the said process. The entrepreneur simply watches and
examines the customers’ behavior in their raw state without biases and pretentions
consequently providing for a faster process and more accurate results.
Observation is reliable because it allows the entrepreneur to see the real and
actual behavior of the customers rather than hearing what they need to say. This can be
performed by the human or machine observer.

Human Observation
 The human observer records the information as it occurs or happens using the five
senses.

A. Customer Purchase Patterns - this observation technique aids the entrepreneur in

understanding the buying behavior of customers (how often do they buy the good or
avail the service)
 Application in printing business: The human observer will count and rank the type
of printing jobs requested by the customers per month (e.g. calendars, posters, student
publications, invitations, calling cards, tarpaulins etc.). The objective is to determine
at which months should the business prepare for peak volumes and what type/s of
printing material.
 Application in salon: The human observer will list what type of services (hair
rebond, color/ dye, skin care, spa etc.) is mostly availed per month and on what
occasion/s. The objective is to determine at which months should the salon prepare
for mostly availed and what materials needs to be prepared before the peak occurs.

B. Mystery Shopping - This is a common practice of service businesses today where

the researcher pretends as a customer of his own business or the competitor’s. This is
to assess and confirm if customer service is well-performed.

 Application in laundry business: the human observer will bring his laundry bag to a
competitor and validate if the service provider counts the pieces of clothes and if the
same will be delivered completely.
Machine Observation

A. Video cameras or closed-circuit television (CCTV) - these are positioned within the
business premises and records the customers in their purchase or service behavior.

 Application in gym business: the machine observer will record as to what gym
equipment are used often by gym members. The objective is to understand if there is a
need for queuing for the equipment used frequently and on what time will this
queuing start. This will also help the owner if he should add more equipment being
used frequently and remove equipment used rarely.

B. Traffic counters - these are used to determine foot traffic and vehicular traffic in a
certain area. It focuses on the flow/ movement of people. The entrepreneur will locate
sensibly the placement of a tarpaulin, signage or billboard for marketing purposes.
This also provides for a strategic location of the business.

 Application to a convenience store: this helps determine what kinds of people

(students/ professionals/ residents) are passing by the area and what possible products
can be positioned to them.

C. Web analytics - this is an online tool that tracks the performance of a web site as to
the number of visitors, the contents they usually access, geographical locations of the
visitors and the number of hours they spend on the web site. This gives the
entrepreneur a report on how his web site performs and how this drives awareness and
sales for the business.

 Application to online stores: As the entrepreneur already have an idea as to the

number of visitors, the contents they usually access, geographical locations of the
visitors and the number of hours they spend on the web site, he will use this to
improve the said online store. The entrepreneur will work in reaching more
customers, improving product lines and informing the customers about their promos
during the time most customers visit the said web site.

D. Barcode scanners - these machines help researchers in understanding the purchase

behavior of customers by reading the product codes and generating relevant sales
information.

 Application to a supermarket: through the information gathered by barcode

scanners, owners will know what customers buy, how many times they buy and how
much do they buy.

E. GPS (Global Positioning System) Technology - allows tracking of pedestrians and

vehicles exposed to out-of-home advertisements.

 Application to a fast food restaurant: owners will strategically locate their signage
so that it will be seen by more pedestrians and vehicles. “Jollibee Buntun, 5 km
ahead”

SURVEY

It is the process of getting answers from a sample of respondents derived from a

population. A survey is very simple and practical to run since it requires preparation of
predetermined questions answerable by definite responses using equitable scales. This is
advantageous because it is systematized, easier to analyze and yields definitive results to
be interpreted.

 Traditional surveys are done via telephone, face-to-face interaction or mail/postal

service.
 Modern surveys are done using the Internet via emails, web sites and social media
sites.

In preparation for the actual survey, the entrepreneur needs to consider the number of
respondents and blueprint of the questionnaire.

 A sample is a percentage of a population carefully chosen by the researcher to

generally represent the said population. We need to deal with sample only because if
we are to get the entire population, it will take a lot of time, efforts and resources in
conducting the survey.
 Sampling error is a range of inaccuracy to which the sample might vary from the
particular population.
TIPS ON THE CREATION OF QUESTIONNAIRE BLUEPRINT
 Be specific – The questions must be direct and the answers are concrete.
 Be flexible with the respondent’s convenient way in accomplishing the
questionnaire – As a researcher, you must be ready on floating your questionnaire.
While some can do it online, others prefer the traditional one.
 Each question is necessary and repetitive – Exclude irrelevant questions. Ascertain
that all questions intend to accomplish the objectives of the survey.
 Put yourself in the shoes of the respondents – Respect begets respect.
 Questions are coherent – The questionnaire is systematic or organized. General
questions first followed by specific questions. If you want to ask about pricing, ask
necessary questions on pricing. Do not ask about pricing first then the second question
is about promotions while the third and fourth one is about the product and place,
respectively.
 The questionnaire should look professional – The questionnaire is neatly presented,
divided into strategic parts and properly numbered. This is to ensure that respondents
take the questionnaire seriously and that as a researcher, you really mean business.