Lesson 3 Recognize and Understand The Market Week 23

RECOGNIZE AND UNDER WEEK 23
STAND THE MARKET

RECOGNIZE AND
UNDERSTAND THE MARKET
In previous lesson we learn about the creation of an entrepreneurial
ideas that lead to the identification of entrepreneurial opportunities,
which in turn results in the opening of an entrepreneurial venture. In
opening the new venture or a business, you need to determine the
Unique Selling Proposition (USP) and Value Proposition (VP) of
your product as well as your target market.
VALUE PROPOSITION (VP)
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
VALUE PROPOSITION: TELL
ME WHY I SHOULD BUY FROM
YOU
A value proposition is a promised of the organization to
their customers or market segment. The company has a
promised value on how the customers will benefit to the
company's product or service that will be delivered,
experienced, and acquired.
A value proposition is used by the organization to create
their image and to make the product attractive to the
customers.
A value proposition is considered as a company
innovation of its products and services offered.
MANG INASAL VALUE
PROPOSITION ARE AS FOLLOWS
Mang Inasal promised that their products are quality but
affordable in price. They promised a right value for
money of the customers.
Mang Inasal promised to their customers that they will
provide a native style chicken inasal which has the same
taste or much better compare to expensive restaurants.
Native-style and “nuot-sarap” Chicken Inasal with its
pioneering “unlimited rice”
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.
UNIQUE SELLING
PROPOSITION (USP)
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. As
entrepreneur, you think of marketing concept that persuade your target customers. The
following questions you may ask in doing this, what the customers want? What brand
does well? What your competitor does well?
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)
Example: Jung kook Sari-sari Store open only from 6:00 am
to 6:00 pm, but Jung kook noticed that there are customers
who go nearby town to look for a convenience store at
around 10:00 pm to 6:00 am. He believes that this is a great
opportunity for his store to operate 24/7. In this example,
proposed value proposition: “Jung kook 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”, Jung kook Sari-sari Store opens 24/7,
which make it different from other competitors.
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 differentiator against the
competitors. Keep it short and simple and think of a tagline
that is easy to remember. Right now, the proposed unique
selling proposition: “Jung kook 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.
In the Service of the The Quality
Filipino.
Kapamilya You can Trust.
Pambansang Litsong Hindi raw masarap,
Manok. pero pwede na
Hindi lang
We find ways. pampamilya, pang-
isports pa!
AFTER YOU UNDERSTAND THE
VALUE PROPOSITION AND THE
UNIQUE SELLING PROPOSITION,
NOW IT’S TIME TO UNDERSTAND
THE TARGET MARKET, CUSTOMERS’
REQUIREMENT AND MARKET SIZE.
2 ND
MEETING
SLOGAN MAKING/ TAGLINE
MAKING AND VALUE
PROPOSITION
Direction: on one short Oslo
paper create a slogan and Value
Proposition on your personal
opinion related to the business
you want in the future.
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.
COMMONLY USED METHODS FOR
SEGMENTING THE MARKET ARE
FOLLOWS.
1. Geographic segmentation – the total market is divided according to geographical location.
Variables to consider:
A. Climate c. Culture
B. Dominant ethnic group d. Density (either rural or urban)
2. Demographic Segmentation – divided based consumers.
a. Gender e. Education
b. Age f. Religion
c. Income g. Ethnic group
d. Occupation h. Family size
3. Psychological Segmentation- divided in terms for customers think and believe.
 Needs and wants e. Knowledge and awareness
 Attitudes f. Brand concept
 Social class g. Lifestyle
 Personality traits
4. Behavioral Segmentation- divided according to customers’ behavior

pattern as they interact with a company.
 Perceptions d. Benefits
 Knowledge e. Loyalty
 Reaction f. Responses
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
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 Requirement
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.
C. MARKET SIZE
Entrepreneur’s most critical task is to calculate the market size, and the potential
value that market has for their startup business. Market research will determine
entrepreneur possible customers in one locality.
What is 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 –
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RECOGNIZE AND UNDER WEEK 23

STAND THE MARKET

4. Behavioral Segmentation- divided according to customers’ behavior

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