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Q3 Entrepreneurship

The document provides an introduction to entrepreneurship and entrepreneurs. It defines an entrepreneur as someone who starts and manages their own business, taking on financial risks to do so. The document outlines several key features of entrepreneurship, including that it provides valuable goods/services, creates wealth, and involves risk-taking. It also discusses benefits of entrepreneurship like job creation and economic activity. Factors that influence entrepreneurship are described, like personality traits and environmental conditions. Common skills of entrepreneurs are decision-making, communication, leadership, and innovativeness. Different types of entrepreneurs are defined. In closing, the document notes career opportunities related to entrepreneurship.

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0% found this document useful (0 votes)
47 views19 pages

Q3 Entrepreneurship

The document provides an introduction to entrepreneurship and entrepreneurs. It defines an entrepreneur as someone who starts and manages their own business, taking on financial risks to do so. The document outlines several key features of entrepreneurship, including that it provides valuable goods/services, creates wealth, and involves risk-taking. It also discusses benefits of entrepreneurship like job creation and economic activity. Factors that influence entrepreneurship are described, like personality traits and environmental conditions. Common skills of entrepreneurs are decision-making, communication, leadership, and innovativeness. Different types of entrepreneurs are defined. In closing, the document notes career opportunities related to entrepreneurship.

Uploaded by

jerome sumpucan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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ENTREPRENEURSHIP

SENIOR HIGH SCHOOL DEPARTMENT


TEACHER: MRS. RHEA MAE G. SUPAN

LESSON 1: INTRODUCTION TO ENTREPRENEURSHIP

WHAT IS ENTREPRENEUR AND ENTREPRENEURSHIP?

The term entrepreneur originates from the French word “entreprendre” which means “to
undertake”. It connotes a business paradigm which signifies starting a new business undertaking.
Entrepreneurship comes from the word Entrepreneur.

• Entrepreneur – refers to a person who strongly advocates and correctly practices the concepts
and principles of entrepreneurship in operating and managing the self-owned entrepreneurial
venture.

• Entrepreneurship – is the art of observing correct practices in managing and operating a self-
owned wealth-creating business enterprise by providing goods and services that are valuable to
the customers.

SALIENT FEATURES OF ENTREPRENEURSHIP

• It is an art of correct practices.

Entrepreneurship is an art and not a science. It is not fixed and absolute rules, while science is. As
such it will continue to change. Change denotes movement and innovation. Innovation is creating new
ideas. Entrepreneurship therefore is not a static or stagnant. It continuously grows, develops, improves
and expands.

• It is a wealth-creating venture.

This feature sounds simple, but this has been the most misconstrued one because of the word
wealth.
In most instances, ordinary small businesspeople equate wealth with the term profit. In the
parlance of accounting, profit is said to represent excess of income or revenue against cost and expenses.
Wealth is the abundance of money, property, and power. Profit, therefore in its strict sense, is not equal to
wealth.

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ENTREPRENEURSHIP
SENIOR HIGH SCHOOL DEPARTMENT
TEACHER: MRS. RHEA MAE G. SUPAN

• It provides valuable goods and services.

The owner of a business, in most instances, is engaged in the sale of good and sales of goods and
services. Valuable goods and services mean it simply put these goods and services to highly satisfy the
target buyers in terms of quality and price. Quality is the ability of the product to meet and satisfy customer
needs.
The entrepreneur defines value from the perspective of the buyers and not only from his/her
perspective. It may happen that what is valuable to the entrepreneur may not be value to the consumers.
The term value is subjective. What is valuable to someone may not be valuable to others.

• It entails opening and managing the self-owned enterprise.

This feature highlights two important elements, the concept of opening a self-owned enterprise and
the concept of managing it. The entrepreneur opens his/her own business under the principle of
entrepreneurship. It must be self-owned to qualify as an entrepreneurial venture.
A business is considered self-owned when the person managing its daily activities is also its
owner. This is a straightforward requirement of entrepreneurship.
Businesses that are being managed by others for the benefit of the owners do not fall within the
sphere of entrepreneurship. Such businesses are operating under the concept of intrapreneurship.

• It is a risk-taking venture.

The basic concept of risk in entrepreneurship can be expressed in this statement: Risk is inherent
in entrepreneurial venture.
Risk is simultaneously born with the venture. Risk cannot be detached from any entrepreneurial
venture and the only way to remove risk is to close the venture. However, closing the business means
losing the dream and the desire of the entrepreneur to become successful and lead an improved life.
Hence, closing the business is not the ultimate answer in handling its inherent risk. The risk in
entrepreneurship is called business risk.

Hence, an entrepreneur faces the business risk instead of avoiding it. He / She cannot eliminate
something ingrained in entrepreneurship; instead, he/she finds ways to minimize the effects of the risk.

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ENTREPRENEURSHIP
SENIOR HIGH SCHOOL DEPARTMENT
TEACHER: MRS. RHEA MAE G. SUPAN

Societal and Economic Benefits of Entrepreneurship

1. Entrepreneurship produces more jobs that equate to an increase in national income. Small businesses
produce jobs and create wealth.
2. Entrepreneurship amplifies economic activities of different sectors of society.
3. Entrepreneurship introduces new and innovative products and services.
4. Entrepreneurship improves people’s living standards.
5. Entrepreneurship disperses the economic power and creates equality.
6. Entrepreneurship controls the local wealth and balance regional development.
7. Entrepreneurship reduces social conflicts and political unrest.
8. Entrepreneurship elicits economic independence and capital formation.

Benefits of Learning Entrepreneurship to Students

1. It prepares students for an uncertain future.


We cannot predict the future, just like what is happening today because of the pandemic. Knowing
entrepreneurship will teach you crucial skills that will help you to respond to uncertainties, skills like
problem-solving, teamwork and accepting failure or committing mistake as part of our growth.

2. It will give you a room for creativity and collaboration.


Entrepreneurship introduces innovative products; thus, it can teach you on how to be creative and
will promote collaboration among your friends, classmates and other people with the same skills
and interests. It will make you think outside the box and will boost your self-esteem.

3. It teaches you on how to solve a problem and it helps you to assess and uncover your skills.
Learning entrepreneurship will develop your problem-solving skill by identifying the problem in the
market. As you go along searching for the problem or need, you will get to know more of yourself
and uncover your potential skills. It will teach you on how to persevere just to solve the problem.

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ENTREPRENEURSHIP
SENIOR HIGH SCHOOL DEPARTMENT
TEACHER: MRS. RHEA MAE G. SUPAN

FACTORS AFFECTING ENTREPRENEURSHIP


1. Personality Factors which include:

a) Initiative- which means doing things even before being told


b) Proactive-which means he can classify opportunities and seize it.
c) Problem Solver- which means he can retain good relations with other peopled
d) Perseverance-meaning he will pursue things to get done regardless of challenges e.
e) Persuasion- means that he can entice people to buy even if they don’t.
f) Planner - meaning he makes plan before doing things and do not fail to monitor it.
g) Risk-taker - which means that he is willing to gamble but he will calculate it first.
2. Environmental Factors which include political, climate, legal system, economic and social conditions
and market situations.
Common Competencies in Entrepreneurship
1. Decisive- an entrepreneur must be firm in making decisions.
2. Communicator- an entrepreneur must have a convincing power.
3. Leader-an entrepreneur an entrepreneur must have the charisma to be obeyed by his employees.
4. Opportunity seeker- an entrepreneur must have the ability to be the first to see business chances.
5. Proactive- controlling a situation by making things to happen or by preparing for possible future
problems.
6. Risk Taker- they have the courage to pursue what is their business ideas.
7. Innovative- the entrepreneurs have big business ideas and they do not stop improving and thinking of
new worthwhile ideas for their business.
Types of Entrepreneurs
1. Innovative entrepreneur- they are those who always make new things by thinking of new ideas.
2. Imitating entrepreneurs- they are those who don’t create new things but only follow the ideas of other
entrepreneurs.
3. Fabian entrepreneurs- they are those skeptical. They don’t initiate but follow only after they are
satisfied.
4. Drone entrepreneur- they are those who lives on the labor of others. They are die-hard conservatives
even ready to suffer the loss of business.

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ENTREPRENEURSHIP
SENIOR HIGH SCHOOL DEPARTMENT
TEACHER: MRS. RHEA MAE G. SUPAN

5. Social entrepreneurs-they are those who initiate changes in the various fields such as education,
health, human rights, environment and enterprise development.

Career Opportunities of Entrepreneurship


1. Business Consultant- with the expertise of the entrepreneur he can be a very good source of advices
to other entrepreneurs and would be business man.
2. Teacher- a graduate of an entrepreneurship can be use his knowledge in teaching
3. Researcher- the entrepreneur can be employed as researcher by an enterprise.
4. Sales- the entrepreneurship graduate can apply as salesman.
5. Business Reporter- the entrepreneur being expert in the field, he can be employed as business
reporter.

LESSON 2: Recognize a Potential Market

Entrepreneurial Ideas

The creation of an entrepreneurial ideas leads to the identification of entrepreneurial opportunities, which in
turn results in the opening of an entrepreneurial venture.

The entrepreneurial process of creating a new venture is presented in the diagram below. (Aduana, 2017).

Creation of Identification of Opening of


Entrepreneurial Entrepreneurial Entrepreneurial
Ideas Opportunities Venture

Essentials in Entrepreneur’s Opportunity Seeking

Entrepreneurial mind frame - this allows the entrepreneur to see things in a very positive and optimistic
way in the midst of difficult situation. Being a risk - taker, an entrepreneur can find solution when problems
arise.

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ENTREPRENEURSHIP
SENIOR HIGH SCHOOL DEPARTMENT
TEACHER: MRS. RHEA MAE G. SUPAN

Entrepreneurial heart flame - entrepreneur's driven passion, they are attracted to discover satisfaction in
the act and process of discovery. Passion is the great desire of an entrepreneur to achieve his/her goals.

Entrepreneurial gut game - this refers to the ability of the entrepreneur of being intuitive. This also known
as intuition. The gut game also means confidence in oneself and the firm believes that everything you
aspire can be reached.

Sources of Opportunities
1. Changes in the environment - Entrepreneurial ideas arise when changes happen in the external
environment. A person with an entrepreneurial drive view these changes positively.
• External environment refers to the physical environment, societal environment, and industry
environment where the business operates.
1.1 The physical environment includes:
a) Climate- the weather conditions.
b) Natural resources- such as minerals, forests, water, and fertile land that occur in
nature and can be used for economic gain.
c) Wildlife- includes all mammals, birds, reptiles, fish, etc., that live in the wild.

1.2 The Societal environment includes the various forces like:


a) Political forces- includes all the laws, rules, and regulations that govern business
practices as well as the permits, approvals, and licenses necessary to operate the
business.
b) Economic forces- such as income level and employment rate.
c) Sociocultural forces- customs, lifestyles and values that characterize a society.
d) Technological environment- new inventions and technology innovations.
1.3 The industry environment of the business includes:
a) Competitors
b) Customers
c) Creditors
d) Employees
e) Government
f) Suppliers

2. Technological discovery and advancement - A person with entrepreneurial interest sees possibility
of business opportunities in any new discovery or because of the use of latest technology.
3. Government’s thrust, programs, and policies - The priorities, projects, programs, and policies of the
government are also good sources of ideas.
4. People’s interest - the interest, hobbies, and preferences of people are rich source of entrepreneurial
ideas.
5. Past Experiences - the expertise and skills developed by a person who has worked in a particular field
may lead to the opening of related business enterprise.

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ENTREPRENEURSHIP
SENIOR HIGH SCHOOL DEPARTMENT
TEACHER: MRS. RHEA MAE G. SUPAN

THE FIVE FORCES OF COMPETITION MODEL IN INDUSTRY ENVIRONMENT

Threats of
potential
new
entrants

Bargaining Bargaining
power of Rivalry among power of
suppliers existing firms buyer

Threats of
substitute
products

1. Bargaining power of buyers


• The buyers are the one that pays cash in exchange to your goods and services. The buyer has
a strong and magnified bargaining power. The threat of its bargaining power will be less if the
following factors notice:
a) There are several suppliers available in the market.
b) The buyer has the potential for backward integration.
c) The cost of switching the supplier cost is minimal.
d) The product represents a high percentage of the buyer’s cost.
e) The buyer purchases large portions of the seller’s product or services.
2. Treats of Potential New Entrants
• A new entrant is defined as the one who enters something. For example, the level of capital
requirements, if the business requires huge capital, new entrants should decline to join the
business. This gives a threat to the business. This can be notice if there is the presence of the
following factors:
a) Substantial capital requirement.
b) Strict government policy.
c) Difficulty in accessing distribution channels.
d) Economies of scale.
e) High cost of product differentiation.
f) High switching cost
3. Rivalry among Existing Firms
• Rivalry is a state or situation in which people or groups are competing with each other. The
intensity of rivalry among existing firms is characterized to the following factors:
a) Diversity of rivals.

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ENTREPRENEURSHIP
SENIOR HIGH SCHOOL DEPARTMENT
TEACHER: MRS. RHEA MAE G. SUPAN

b) Number of competing firms.


c) Characteristics of the products or services.
d) Increased capacity.
e) Amount of fixed costs.
f) Rate of industry growth.
4. Threats of Substitute Products
• Substitute means anything that takes the place or function of another. A substitute product can
give a big threat in the industry environment if the following factors are notice:
a) Switching cost is low.
b) Preferences and tastes of the customers easily change.
c) Product differentiation is highly noticeable.
d) The quality of substitute products dramatically improves.
e) The price of substitute product is substantially lower.
5. Bargaining Power of Suppliers
• The Suppliers are the one that provide something that is needed or wanted. This can be notice
if there is the presence of the following factors:
a) The supplier has the ability for forward integration.
b) Suppliers in the industry are few, but the sales volume is high.
c) Substitute products are not readily available in the market.
d) The switching cost is very high.
e) The product or service is unique.

LESSON 3: Recognize and Understand the Market

Value Proposition

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

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ENTREPRENEURSHIP
SENIOR HIGH SCHOOL DEPARTMENT
TEACHER: MRS. RHEA MAE G. SUPAN

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

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)

Unique Value Proposition and Value Proposition are two most famous tools used to explain why prospect
customers buy each product 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.

THE MARKET IDENTIFICATION PROCESS

Market Identification Process: Marketing Strategies

Stage Stage Stage


1 2 3

Market Market Market


Segmentation Targeting Positioning

Who is my
market?

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ENTREPRENEURSHIP
SENIOR HIGH SCHOOL DEPARTMENT
TEACHER: MRS. RHEA MAE G. SUPAN

STEP 1: MARKET SEGMENTATION

Market segmentation is an entrepreneurial marketing strategy designed primarily to divide the market into
small segments with distinct needs, characteristics, or behaviour.

The entire market is composed of different segments with various characteristics, behaviour, culture,
traditions, and needs. Since it cannot be served because the customers are heterogeneous, the entrepreneur has to
find ways to serve homogeneous customers only. This is usually done by market segmentation.

The commonly used methods of segmenting the market are:

GEOGRAPHIC SEGMENTATION
In geographic segmentation the total market is divided according to geographical locations in the Philippines like
regional units, cities, provinces, municipalities, and even barangay units. When the entrepreneur divides the total
market into a smaller segment using geographical segmentation, the following variables must be considered:
1. Climate
2. Dominant ethnic group
3. Culture
4. Density whether rural or urban
5. Classification of the geographical unit

DEMOGRAPHIC SEGMENTATION
In demographic segmentation the market is divided based on the demographic variables of the consumers. The
common demographic variables are the following:
1. Gender
2. Age
3. Income
4. Occupation
5. Education
6. Religion
7. Ethnic group
8. Family size

PSYCHOLOGICAL SEGMENTATION
In psychological segmentation the market is divided in terms of what the customers think and believe. It is based on
the following variables:
1. Needs and wants
2. Attitude
3. Social class
4. Personality traits
5. Knowledge and awareness
6. Brand concept
7. Lifestyle

BEHAVIORAL SEGMENTATION
In behavioural segmentation the market is divided based on the following variables:
1. Perceptions
2. Knowledge
3. Reactions

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ENTREPRENEURSHIP
SENIOR HIGH SCHOOL DEPARTMENT
TEACHER: MRS. RHEA MAE G. SUPAN

4. Benefits
5. Loyalty
6. Responses

STEP 2: MARKET TARGETING

After the segmentation process, which is the first stage of market identification, the entrepreneur moves to
the second stage called market targeting.

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.
B. CUSTOMER REQUIREMENTS
Customer requirements are the specific characteristics that the customers need from a product or a service.
B.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.
B.2. Output Requirements: Tangible thing or things that can be seen. Characteristic specifications that a
consumer expects to be fulfilled in the product. Customer that will avail services as a product, then various
service requirements can take the form of output requirements.
C. 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.

Market targeting is a stage of market identification process that is intended to determine the set of buyers with
common needs and characteristics. They are the market segment that the entrepreneurial venture will serve.
In market targeting phase, the entrepreneur has already divided the total market and is now in the process of:
1. Evaluating each market segment; and
2. Selecting the target market segment or segments to serve.

STEP 3: MARKET POSITIONING

The term positioning simply refers to the act of occupying a certain place. In the field of entrepreneurship, it
may either refer to the act of placing the business in a specific place in the industry or placing the product in a certain
place in the market. There are conceptual differences between business positioning and product or market
positioning.
Business positioning simply refers to the process of determining the place of the business in the industry.
The entrepreneur must conduct industry analysis of the different forces that are strong in the industry in order to
determine the correct position of the proposed venture.
On the other hand, market positioning, refers to the process of arranging a product to occupy a clear,
distinct, and desirable place in relation to other competing products in the mindset of target consumers.

DIFFERENTIATING MARKET POSITIONS

Since the foremost objective of market positioning is to have a distinct place in the minds of the target consumers,
the concept of differentiation becomes inherent and directly linked to the process.
The process of determining the market position of the product includes the following steps:

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ENTREPRENEURSHIP
SENIOR HIGH SCHOOL DEPARTMENT
TEACHER: MRS. RHEA MAE G. SUPAN

1. The entrepreneur determines whether the market position is differentiated from others.
2. The entrepreneur evaluates the advantages or benefits of every possible market position.
3. The entrepreneur decides the market position.

EVALUATING THE BENEFITS OF EVERY MARKET POSITION

Once target position in terms of price and quality dimensions has been evaluated, the entrepreneur determines the
advantages, benefits, and attributes of the product.

There are no specific rules on how many attributes or benefits that the product must have. It is highly suggested,
however, that must have at least one attribute which is considered distinct from other products. The entrepreneur
must strongly promote said attribute or benefit to the consumer.

Similarly powdered milk products may put emphasis on the attributes or benefits to be promoted:
1. Identifiable. The benefit or attribute is easily associated to the product. The customers can easily identify
any benefit that can be derived from the product.
2. Beneficial. The attribute provides valuable benefits to the target consumers.
3. Distinctive advantage. The attribute is distinct to the product and can hardly be copied by the competitors.
4. Efficient and rewarding. The cost in attaching the attribute or value to the product is not higher than the
expected benefits in terms of profit.

DECIDING ON MARKET POSITION

The last phase of market positioning after differentiating the product from others in terms of benefit or attributes is to
make a decision on where to position the product.There are two basic dimensions that must be seriously considered
in deciding the market position of the product. These are price and quality.

Moreover the entrepreneur may consider the following guide questions in deciding the market position of product:
1. Will the product be sold at a higher price due to its attributes and benefits?
2. Will the product be sold at the same price of the competitor in spite of its benefits?
3. Will the product be sold at the same price of the competitor because they have similar benefits?
4. Will the product be sold at a lower price because it offers less benefit?
5. Will the product be sold at a higher price even if it offers less benefit?

Normally a product sold at a lower price is expected to be inferior quality and offers less benefits, while a product sold
at a higher price is expected to be of better quality and offers more benefits.

MARKET SEGMENT EVALUATION


Entrepreneur must conduct a proper and critical evaluation of every segment. He/she must consider the following
important factor:
1. Size of the segment and its expected growth.
2. Existing and probable structure of the segment
3. Capability of the business

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ENTREPRENEURSHIP
SENIOR HIGH SCHOOL DEPARTMENT
TEACHER: MRS. RHEA MAE G. SUPAN

Size and Growth of the Segment

How large is the segment or what is the growth of the segment are the two frequently asked questions every
time a new business is to be opened. The size and the growth of a segment are considered favorable indicators to do
good business in that particular location. Hence, entrepreneurs tend to flock in it. However they fail to consider that
when there are too many players in a particular segment, doing business in it becomes too competitive.

Structure of the Segment

Another important factor that the entrepreneur must consider in evaluating which segment to serve is the
existing and expected structure of the segment. The entrepreneur may use the five forces of competition of Michael
Porter in evaluating the present and future structure of the segment.

The entrepreneur must properly address the following questions:

1. What is the level of competition in the market segment? Are there strong and aggressive competitors?
2. Are there existing and potential substitute products? Are the barriers on the substitute products strong?
3. Who are the present and potential buyers in the segment? Are the bargaining powers of the buyers strong in
the segment?
4. How strong are the bargaining powers of the suppliers in the segment?

The structure of each segment varies. The entrepreneur must study the different barriers that will lessen the forces of
competition in every segment.

Capability of the Business


Another factor that must be deeply evaluated by the entrepreneur is the internal environment of the
business, including its resources. Does the business have the required business competency to take the advantage
of the existing opportunity? The answer must be a resounding yes; otherwise the entrepreneurial venture may not be
able to succeed in its chosen market.

MARKET SEGMENT SELECTION


The number of segments to serve determines the appropriate entrepreneurial marketing strategy to use.
Generally the entrepreneur can select one segment or all segments of the total market with different entrepreneurial
marketing strategies.

The basic entrepreneurial marketing strategies relative to the selected segment are the following:

Individual or One-on-One Marketing


In the individual or one-on-one marketing strategy, the business provides a product that is suited or fitted to
the particular need of the consumers. It is based on the concept that the consumers have different needs and wants.
For example, tailoring and dress shops use the one-on-one marketing strategy since they make clothes for
specific people based on their respective requests. Furniture manufacturers also adopt the one-on-one marketing
strategy for clients who order customized furniture.

Differentiated Marketing
Differentiated marketing is a variation of the segmentation marketing strategy. Here the entrepreneur covers
several segments of the total market and designs a particular product for each segment based on the market
segment evaluation and the capability of the business.

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ENTREPRENEURSHIP
SENIOR HIGH SCHOOL DEPARTMENT
TEACHER: MRS. RHEA MAE G. SUPAN

For example, the different toothpaste and milk products in the market are intended for different segments.
Each type of toothpaste and milk products is prepared to serve a different set of customers from several segments.

Concentrated Marketing
Concentrated marketing or sometimes called niche marketing is another variation of segmentation
marketing where the business selects only few segments but intends to serve a large number of customers in the
chosen segments. This set of customers is the niche.

Mass or Undifferentiated Marketing


Undifferentiated marketing strategy espouses that the customers have common needs and wants. The
entrepreneur does not have to differentiate them according to their needs and wants but rather assumes that his/her
product will cater to all types of customers in general.
For example, an entrepreneur engaged in the production of refined white sugar does not necessarily have to
segment the whole market but rather mass produce sugar for the whole market. It is a staple commodity that is used
by people regardless of gender, age, and socioeconomic status.

LESSON 4: Branding

BRANDING STRATEGY

Branding strategy starts with the formulation of a brand name for the first single product that the business
intends to make. The situation becomes more complicated when the business starts to offer additional product.
Though most entrepreneurial endeavors engaged in manufacturing start with a single product, it eventually adds a
new product line in response to entrepreneurial opportunities that present themselves.

Examples of Brand Name:

Fast Food – Mcdonalds, KFC, Mang-Inasal


Hospital – JBL Hospital
Drinks – Nestea, Lipton
Cloth – Culture, Markus
Shoes – Milanos. Salvatorre
Bags – Tuscany, Hermes, Jansport

BRAND NAME
It is a name, symbol, or other feature that distinguishes a seller's goods or services in the marketplace. Your
brand is one of your greatest assets because your brand is your customers' over-all experience of your business.

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ENTREPRENEURSHIP
SENIOR HIGH SCHOOL DEPARTMENT
TEACHER: MRS. RHEA MAE G. SUPAN

BRANDING
It is a powerful and sustainable high-level marketing strategy used to create or influence a brand. Branding
as a strategy to distinguish products and companies and to build economic value to both customers and to brand
owners, are described by Pickton and Broderick in 2001.

Commonly Used Branding Strategy

1) Purpose
"Every brand makes a promise. But in a market in which customer confidence is little and budgetary observance
is great, it’s not just making a promise that separates one brand from another, but having a significant purpose,"
(Allen Adamson).
2) Consistency
The significant of consistency is to avoid things that don’t relate to or improve your brand. Consistency aids to
brand recognition, which fuels customer loyalty.
3) Emotion
There should be an emotional voice, whispering "Buy me". This means you allow the customers have chance to
feel that they are part of your brand. You should find ways to connect more deeply and emotionally with your
customers.

4) Flexibility
Marketers should remain flexible to in this rapidly changing world. Consistency targets at setting the standard for
your brand, flexibility allows you to adjust and differentiate your approach from your competition. According to
Kevin Budelmann, "Effective identity programs require sufficient consistency to be identifiable, but sufficient
variation to keep things fresh and human" so if your old tactics don't work anymore, don't be afraid to change. It
doesn’t mean it worked in the past it may still work now.
5) Employee Involvement
It is equally important for your employees to be well versed in how they communicate with customers and
represent the brand of your product.
6) Loyalty
It is an important part of brand strategy. At the end of the day, the emphasis on a positive relationship between
you and your existing customers sets the tone for what potential customers can expect from doing business with
you.
7) Competitive Awareness
Do not be frightened of competition. Take it as a challenge to improve your branding strategy and craft a better
value in your brand.

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ENTREPRENEURSHIP
SENIOR HIGH SCHOOL DEPARTMENT
TEACHER: MRS. RHEA MAE G. SUPAN

LESSON 5: The Marketing Mix

Marketing Mix is a set of controllable and connected variables that a company gather to satisfy a customer
better than its competitor. It is also known as the “Ps” in marketing.

Originally, there were only 4Ps, but the model has been continually modified until it became 7P’s. The original 4
P’s stands for product, place, price, and promotion. Eventually, three elements have been added, namely:
people, packaging and positioning to comprise the 7 P’s.

The 7P’s of Marketing

❖ PRODUCT
This is defined as “anything that can be offered to a market for attention, acquisition, use or consumption that
might satisfy a want or need.

Two types of Products:


1. Consumer Products (convenience products, shopping products, specialty products, unsought products).
2. Industrial Products (capital goods, raw materials, component parts, major equipment, accessory equipment,
operating supplies, and services).

Classification of Consumer Products:


1. Convenience goods are products that consumers buy repeatedly without much thought.
2. Shopping goods are products shoppers typically spend more time researching and comparing before they
buy. Unlike convenience goods, these are rarely impulse purchases.
3. A specialty good is the only product of its kind on the market. This means consumers don't usually feel the
need to compare and deliberate as much as they would with shopping products.
4. Unsought products are goods that people aren't usually excited to buy. These products have utility, but
they're usually not fun purchases.

Classification of Industrial Products:


1. Capital goods - are industrial products that are directly used in production. Capital goods consist of
installations and accessory equipment. Buildings, plants, and machinery are examples of installations.
2. Raw Materials - these are industrial goods that will be used in the making of other products. Included in this
category are natural resources such as forest products, minerals, water, oceanic products, and agricultural
products and livestock.
3. Component Parts - unlike raw materials, parts usually have been processed before being used in the
finished product. Although they may not be visible, parts are left intact and assembled into the total product.
4. Major Equipment - this category comprises industrial products used to make, process, or sell other goods.
These include machinery, typewriters, computers, automobiles, tractors, engines, and so on.
5. Accessory Equipment - normally, they are relatively expensive and have a useful life over one year. Major
equipment is not limited solely to the production process.

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ENTREPRENEURSHIP
SENIOR HIGH SCHOOL DEPARTMENT
TEACHER: MRS. RHEA MAE G. SUPAN

6. Operating Supplies - supplies include operating supplies like office stationery, repair, and maintenance
items. Supplies can be treated as convenient products of the industrial market as they are purchased with
minimal effort.
7. Services - business services include maintenance and repair services, factory premise cleaning, office
equipment repair, and business consultancy services. These services are generally provided through
contracts by small producers and manufacturers of the original equipment.

❖ PRICE
It answers the question—how much? This is also the amount of money that the customer must pay to get the
products or services that he wants. This is also defined as the value that the entrepreneur assigns to a product
or service after computing its costs.

Types of Pricing Strategies:


1. Market Penetration Pricing - this is the setting up of a low price to new products or services in order to
attract more customers and increase in market share.
2. Market Skimming Pricing - This is the opposite of market penetration pricing because with market
skimming pricing strategy, the entrepreneur sets a higher price for a new product to gain maximum
revenues for customers who are willing to pay for a higher price.
3. Competitive Pricing - this is a common practice among entrepreneurs where they check and refer to the
product price of their competitors.
4. Premium Pricing - this is a method where the entrepreneur sets a very high price for their products and
services to reflect an impression of higher quality and superiority.
5. Cost-Based Pricing - this is a pricing method wherein a mark-up is added over costs or all expenses to
come-up with the agreed price of the product or service.
6. Psychological Pricing - It is the practice of setting prices of products that is slightly lower than a whole
number.
7. Bundling - this is a strategy which is sometimes referred to as product bundle pricing. This is when
entrepreneurs combine two or more of their products and offers the ―bundle‖ at a lesser price.
8. Value-Based Pricing - This is a pricing strategy wherein the entrepreneur determines the willingness to pay
of a target customer for a particular product or service. There are customers who don’t care how much
something costs you to make or your competitors, they care how much value they’re receiving at a
particular price.
9. Product Line Pricing - This is another strategy where the entrepreneur determines the price steps between
numerous products in a product line based on cost differences between the products, competitors’ prices,
and, lastly, customer perceptions of the value of different features.

❖ PLACE
It refers to a location where the business is situated. An entrepreneur would choose a prime location for his
business where the customers could easily visit his store to buy their goods or services. Place would also refer
to the channels of distribution. In this marketing mix, the entrepreneur seeks to answer this – how can we deliver
our products and services to our target customers?

Stages of Distribution Channel:

Channel 1:

Producer Wholesaler Retailer Consumer

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ENTREPRENEURSHIP
SENIOR HIGH SCHOOL DEPARTMENT
TEACHER: MRS. RHEA MAE G. SUPAN

Channel 1 contains two stages between producer and consumer - a wholesaler and a retailer. A wholesaler
typically buys and stores large quantities of several producers' goods and then breaks into bulk deliveries to
supply retailers with smaller quantities. For small retailers with limited order quantities, the use of wholesalers
makes economic sense.

Channel 2:

Producer Retailer Consumer


Channel 2 contains one intermediary. In consumer markets, this is typically a retailer. A retailer is a company
that buys products from a manufacturer or wholesaler and sells them to end users or customers. In a sense, a
retailer is an intermediary or middleman that customers use to get products from the manufacturers.

Channel 3:

Producer Consumer
Channel 3 is called a "direct-marketing" channel, since it has no intermediary levels. In this case the
manufacturer sells directly to customers.

❖ PROMOTION
Most entrepreneurs today are investing a great amount of money for promotion. Do you know why? The main
purpose of promotion is to get the attention of customers which will then lead to their purchase of the product
that is being promoted. This marketing mix may also create interest and curiosity in the minds of buyers and can
also generate loyal customers.

Types of Promotion Strategies:


1. Advertising - it is any paid form of public presentation or announcements of products or services by an
identified sponsor through a medium.
2. Sales Promotion - this is a short-term incentive given to customers to encourage the purchase of a product
or service.
3. Personal Selling - This is one of the most sought after strategies in promotion. Customers find that
personal selling is that the priority of the entrepreneur is on the interactions, relationship and trust built
between sales and the customers or buyers.
4. Public Relations - Also known as PR is the process of creating good relations with the general public and
building a good image.
5. Direct Marketing - This is the strategy where the entrepreneur makes direct connections with carefully
targeted customers to get fast response and make a lasting relationship thus making them your loyal
customers.
6. Social Media Marketing (SMM) - This strategy uses social networking websites such as Facebook,
instagram and twitter as a promotional tool.

❖ PEOPLE
This is an additional element in the basic 4P’s of marketing. People include your employees and how they
handle and take care of your customers’ needs. The most successful entrepreneurs put the right people in the
right job at the right time.

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ENTREPRENEURSHIP
SENIOR HIGH SCHOOL DEPARTMENT
TEACHER: MRS. RHEA MAE G. SUPAN

People who make the products - aside from the management team, there are people down the line who
are responsible for coming up with the products and services of the company.
People who bring the products to the customers - these are the people who are supposed to know what
the customers want and what the best way is for these customers to get what they want.
People who talk to the customers - Companies, no matter how big or small require customer service to
support their products and services. They should have the right kind of people manning their customer
touch points.

❖ PACKAGING
This is how the product is presented to the customers. It is the way your product or service looks from the
outside. Remember that customers enjoy a very good visual presentation of your products or services before
they even buy it. Packaging will set you apart from your competitors.

Other distribution-related packaging considerations include:


Labeling - You may be required to include certain information on the label of your product when it is distributed
in specific ways. For example, labels of food products sold in retail outlets must contain information about their
ingredients and nutritional value.
Opening - If your product is one that will be distributed in such a way that customers will want to--and should be
able to--sample or examine it before buying, your packaging will have to be easy to open and to reclose.
If, on the other hand, your product should not be opened by anyone other than the purchaser--an over-the-
counter medication, for instance--then the packaging will have to be designed to resist and reveal tampering.
Size - If your product must be shipped a long distance to its distribution point, then bulky or heavy packaging
may add too much to transportation costs.
Durability - Many products endure rough handling between their production point and their ultimate consumer. If
your distribution system can't be relied upon to protect your product, your packaging will have to do the job.

❖ POSITIONING
This is the process of communicating the image of a brand into the minds of your customers. The entrepreneur’s
main goal in positioning is to make your products or services stand out against your competitors. This is also the
marketing mix where companies create their Unique Selling Proposition or USP.

The process of determining the market position of the product includes the following steps:
1. The entrepreneur determines whether the market position is differentiated from others.
2. The entrepreneur evaluates the advantages or benefits of every possible market position.
3. The entrepreneur decides the market position.

The entrepreneur may consider the following guide questions in deciding the market position of product:
1. Will the product be sold at a higher price due to its attributes and benefits?
2. Will the product be sold at the same price as the competitor in spite of its benefits?
3. Will the product be sold at the same price as the competitor because they have similar benefits?
4. Will the product be sold at a lower price because it offers less benefit?
5. Will the product be sold at a higher price even if it offers less benefit?

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