CHAPTER 3:

GETTING TO KNOW
THE MARKET

Prepared by:
MARIFE M. CABUANG
 To create a compelling unique
selling proposition (USP) and value
proposition for a product or service,
it's important to identify what sets
it apart from existing offerings and
communicate that differentiation
clearly to potential customers.
 UNIQUE SELLING
PROPOSITION (USP)

The USP highlights what makes

the product or service unique and
why customers should choose it over
alternatives. This can be a specific
feature, benefit, or characteristic that
is distinct from what competitors
offer.
 EXAMPLE

If you're selling a new type of

energy drink, your USP might be
that it contains all-natural
ingredients and no added sugars,
providing a healthier alternative to
traditional energy drinks on the
market.
 VALUE PROPOSITION

The value proposition goes

beyond the unique aspects of the
product or service to communicate
the overall value it delivers to
customers. It should articulate the
benefits customers can expect and
why those benefits matter to them.
 BUILDING ON THE PREVIOUS
EXAMPLE,

The value proposition for the energy

drink might emphasize how it boosts
energy levels without the crash
associated with high sugar content,
helping consumers stay alert and focused
throughout the day while maintaining
their health and well-being.
 BELOW ARE WAYS TO DEFINE YOUR
MARKET (LANC ASTER SCORE (2010):

• Consider whether the business offers a new solution

to an old problem or complements an emerging
trend.
• Have a clear picture of your target market.
• Determine the benefits that your product or service
offers.
• Examine industry data
• Identify the percentage of market share
• Consider how realistic your pricing is
 MARKET SURVEY

• To start a business, the first thing to do is find out

what is the demand for the product by conducting a
short market survey.

Market surveys are tools to directly collect

feedback from the target audience to
understand their characteristics, expectations,
and requirements.
 SOURCES OF NEW
PRODUCTS/SERVICE

1. Consumer – monitor potential ideas and

needs from customers and formally arrange
for consumers to express their opinions.
2. Existing products and services –
analysis of products and services uncovers
ways to improve offerings that may result in
a new product or service
 SOURCES OF NEW
PRODUCTS/SERVICE
3. Distribution Channels - channel members
can help suggest and market new products
4. Government (Patent Office) – files of
Patent Office can suggest new product
possibilities
5. Research and Development – conduct
research on your market and your customer
needs. This results to the development and
identification of new and improved product and
services.
 METHODS OF GENERATING NEW
PRODUCTS/SERVICES

1. Focus Group –
A moderator leads a
group of 8 to 14 participants
through an open, in-depth
discussion in a directive or
nondirective manner. This is
an excellent method of
generating and screening
ideas and concepts. It allows
people to be stimulated to
greater creativity.
 METHODS OF GENERATING
NEW PRODUCTS/SERVICES

2. Brainstorming – Good ideas emerge when

the brainstorming effort focuses on a specific
product or market area.
Rules of brainstorming:
A. No criticism of ideas or
suggestions.
B. Freewheeling discussion is
encouraged.
C. Quantity of ideas desired.
D. Combinations and
improvements of ideas are
encouraged.
 METHODS OF GENERATING
NEW PRODUCTS/SERVICES

3. Problem Inventory Analysis

Consumers are provided with a
list of problems and are asked to
identify products that have those
problems. Results must be carefully
evaluated as they may not actually
reflect a new business opportunity.
 METHODS OF
CUSTOMER PROFILING

•Demographics
•Psychographics
•Technographics
 DEMOGRAPHICS

• In demographic classification, we
categorize customers into the following:
• Age
• Income classes
• Social classes/Reference groups
• Ethnic backgrounds
• Religious beliefs
• Occupations
 PSYCHOGRAPHICS

•Psychographics defines the

customer’s:
•Motivations
•Perceptions
•Preferences
•Lifestyle
 TECHNOGRAPHICS

• Technographics classifies people according

to their level of expertise in using a product
or a service.
• For example:
• Sports beginners might just want basic equipment.
• Sports regulars may be looking for more
sophisticated equipment.
• Finally, sports professionals would want the best of
the best for competitive purposes.
 GENERATING NEW PRODUCTS
/SERVICES FOR CONVENTIONAL OR
INNOVATIVE BUSINESSES

• Conventional ideas can be taken from

tried and tested business models like
opening up a snack bar in competition
with almost 100 others in a particular city.
• For the innovative businesses, however,
a product can be introduced that is not
yet known to the market.
 CONVENTIONAL BUSINESS
SCENARIO

Below are ways to start conventional business:

• Start a business that you are familiar with,
• Start a business due to the needs of existing
business contacts.
• Gain business inspiration from your hobby or
interest.
• Gain inspiration from an imported item.
• Explore the possibility of import business.
 INNOVATIVE
BUSINESS SCENARIO
Here are some ways to introduce an innovative
business.
• Gain inspiration from the needs and wants of
customers.
• Gain an inspiration from the problems and issues that
bothered you and your peers.
• Study the usual or existing solutions and ventures in
the alternative solutions.
• List down existing products and find out their uses
aside from what was stated
SURVEY OF MARKET SIZE AND VALUE

A different set of questions is needed when assessing

the size of the market for a particular type of product
and the value of the market (the amount of money
spent on that product each month year).
This involves making a number of assumptions and it is
important to consider the following:
• Are the people interviewed really representative of all
potential consumers?
• Was the number of people interviewed enough?
• Were people giving accurate information?
 MARKET SIZE AND
COMPETITION
• Market surveys and the calculation of market
size and value are important to find out
whether the demand for a product really
exists.

Market share – the proportion of the

total market that a new business could
reasonably expect to have
 COMPETITORS

• Competitors are very important to the

success or failure of a new business. The
entrepreneur should recognize that
there are different types of competitors.
• New entrepreneurs must therefore
assess the new business by using
(SWOT) Analysis – strengths,
weakness, opportunities and threats.
 ACTIVITY
•Prepare a SWOT
Analysis of the
product you want
to introduce.
 LET'S CREATE A SWOT
ANALYSIS FOR A FICTIONAL
PRODUCT: A SMART
WEARABLE FITNESS TRACKER
DESIGNED FOR CHILDREN
AGES 6-12.
 STRENGTHS:
• Unique Offering: The product caters to a niche market
segment of children's fitness trackers, which is
relatively underserved compared to adult-focused
fitness wearables.
• Appealing Design: The fitness tracker features a child-
friendly design with colorful aesthetics, playful
animations, and comfortable wearability, making it
attractive and appealing to young users.
 WEAKNESSES:

1.Limited Market Awareness: The market for children's

fitness trackers is still relatively new and may lack
widespread awareness among parents and caregivers,
requiring significant marketing and educational efforts
to generate interest and adoption.
2.Dependency on Mobile Devices: The functionality of
the fitness tracker relies heavily on mobile devices such
as smartphones or tablets for setup, synchronization,
and data tracking, which may pose usability challenges
for some users or require additional parental
assistance.
 OPPORTUNITIES:
1.Growing Health Consciousness: Increasing
awareness of childhood obesity and sedentary
lifestyles presents an opportunity to capitalize on the
demand for products that promote physical activity
and healthy habits among children.
2.Expansion into Educational Market: The integration
of educational features into the fitness tracker opens
up opportunities to collaborate with schools,
educational institutions, and organizations focused on
youth health and wellness, expanding the product's
reach and impact.
 THREATS:
1.Regulatory Compliance: Strict regulations and compliance
requirements related to children's products, privacy laws,
data security, and product safety standards may pose
regulatory hurdles and increase operational complexity.
2.Emerging Technologies: Rapid advancements in
technology and the introduction of competing products
with more advanced features, lower prices, or stronger
brand recognition may pose a threat to the product's
market position and competitiveness.