Q3 Entrepreneurship
Q3 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.
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.
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.
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.
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.
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.
5. Social entrepreneurs-they are those who initiate changes in the various fields such as education,
health, human rights, environment and enterprise development.
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).
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.
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.
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.
Threats of
potential
new
entrants
Bargaining Bargaining
power of Rivalry among power of
suppliers existing firms buyer
Threats of
substitute
products
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.
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) 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.
Who is my
market?
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.
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
4. Benefits
5. Loyalty
6. Responses
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.
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.
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:
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.
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.
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.
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.
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.
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.
The basic entrepreneurial marketing strategies relative to the selected segment are the following:
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.
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.
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.
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.
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.
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.
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.
❖ 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.
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.
❖ 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?
Channel 1:
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:
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.
❖ 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.
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.
❖ 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?