Entrepreneurship Market PPT PDF

ENTREPRENEURSHIP MR. ARNALDO D. BERNABE  MARKET IDENTIFICATION Target market - identification broadly involves identifying why a customer would want to buy from you, breaking down the overall market into different market segments based o...

ENTREPRENEURSHIP MR. ARNALDO D. BERNABE  MARKET IDENTIFICATION Target market - identification broadly involves identifying why a customer would want to buy from you, breaking down the overall market into different market segments based on shared characteristics, and then choosing the most feasible, profitable market segment or segments as the target market for your marketing mix.  HOW IS A TARGET MARKET IDENTIFIED? Target markets are generally categorized by age, location, income, and lifestyle. Defining a specific target market allows a company to home in on specific market factors to reach and connect with customers through sales and marketing efforts. Testing a target market often occurs well before a product is released.  MARKET SEGMENTATION The entrepreneur must acquire the required competency in order to gain competitive advantage After assessing his/ her entrepreneurial competency and the business competency of his/her chosen venture, the entrepreneur now determines his / her market or customers. When the product is produced to exploit business opportunity, it is designed specifically for the defined market. This entrepreneurial approach indicates that the business has clearly identified the specific market for each product.  MARKET IDENTIFICATION – is a strategic marketing approach and process that is intended to define the specific customer of the product. There are three strategic marketing approaches that will assist the entrepreneur in defining the specific market of the product. These are 1.Market Segmentation 2.Market Targeting, and  1.MARKET SEGMENTATION – is an entrepreneurial marketing strategy designed primarily to divide the market into small segment with distinct needs, characteristic or behavior The entrepreneur must divide. the total market and focus his/her business strategy to a smaller market that is considered homogeneous or have similar interests, preferences, needs, wants, and other related variables. The identified market segment will be the market that can be served better by the entrepreneurial venture based on its competencies. This entrepreneurial approach is sometimes called niche entrepreneurial marketing. There are no strict rules as to how the market will be divided other than the assurance that the smaller segments must be homogeneous The commonly used methods for segmenting the market are 1. geographic segmentation, 2. demographic segmentation, 3. psychological segmentation, and GEOGRAPHIC SEGMENTATION - In geographic segmentation the total market is divided according to geographical locations in the Philippines like provincial regions, 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 5. Classification of 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 behavioral segmentation the market is divided based on the following variables: 1. Perceptions 2. Knowledge 3. Reactions 4. Benefits 5. Loyalty 6. Responses  POINTS TO CONSIDER IN SEGMENTATION: Market segmentation is strategy that can assist the entrepreneurs in identifying the particular homo generous segment to serve. After all the consumer population in its entirety basically has different attitudes, characters, perceptions, inclination or responses. The following important factors must be considered in segmenting the market. 1. Accessibility of the market segment 2. Size of the market segment 3. Distinction of the market segment  After the segmentation process, which MARKET TARGETING is the first stage of market identification, the entrepreneur moves to the second stage called market targeting. Market Targeting is a stage in market identification process that aims to determine the set of buyers with common needs and characteristic. They are the market segment that the entrepreneurial venture intends to serve. In the market targeting phase, the entrepreneur has already divided the total market and is now in the process of 1.Evaluating each market segment and  MARKET SEGMENT EVALUATION – The entrepreneur, after segmenting the market, does not simply select any market segment to serve. He/She must instead conduct a proper and critical evaluation of every segment While doing so, he/ she must consider the following important factors: 1. Size of the segment and its expected growth 2. Existing and probable structure of the segment 3. Capability of the business SIZE AND GROWTH OF THE SEGMENT – The size of the segment or its growth are the two frequently asked details every time a new business is about to be opened. The size and growth of a segment are considered favorable indicators for doing business in that particular location. Hence, entrepreneurs tend to flock in that area. 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 – A other important factor that the entrepreneur must consider in evaluating which segment to serve are the existing and expected structures of 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. Usually, a highly competitive segment limits the profitability and growth · of a particular venture. The shifting process can easily be facilitated once the switching cost is minimal. The strong bargaining power of the buyer can easily bring the prices of the products down. Similarly, suppliers with powerful forces that can control the price of the product is one particular segment. It will not be good for small entrepreneurs to join a segment like this.  CAPABILITY OF THE BUSINESS - Another factor that must be carefully evaluated by the entrepreneur is the internal environment of the business, including its resources. Does the business have the required competency to take 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 segment.. SEGMENTATION MATRIX - Otherwise the entrepreneurial venture may not be able to succeed in its chosen market segment. Otherwise, the entrepreneurial venture may not be able to succeed in its chosen market segment.  DIFFERENTIATED MARKETING – is a variation of the segmentation marketing strategy. The basic concept of differentiated marketing is for the business to exist in almost all segments but to serve few customers only in each segment. As such several products from the same maker will be available and compete with each other in the market. CONCENTRATED MARKETING - Concentrated marketing or sometimes called niche marketing is another variation of segmentation marketing where the business selects only a few segments but intends to serve a large number of customers in the chosen segments. This set of customers is the niche MASS OR UINDIFFERENTIATED MARKETING - Undifferentiated marketing strategy takes into consideration the fact 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. This type of entrepreneurial marketing strategy is usually applicable when the product is a simple commodity that can actually be used by all types of customers regardless of their differences in geographical location, demographic profile, and psychological and behavioral concerns.  MARKET POSITIONING Market positioning plays a significant role in the practice of entrepreneurship. It is even believed to be the most important aspect of an entrepreneurial venture. The term positioning simply refers to the act of occupying a certain place simply refers to the act of occupying a certain place.  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 (Kotler & Armstrong, 2013). · It is considered the last stage in the product identification process after the entrepreneur has  DIFFERENTIATING MARKET POSITION The process of determining the market position of the product includes the following steps: 1.The entrepreneur determines if the market position is distinct from others. 2.The entrepreneur evaluates the advantages or benefits of every possible market position. 3. The entrepreneur decides on the market position. The first logical step that the entrepreneur must perform in market positioning is to determine that the product is truly differentiated from competitors, primarily in terms of value and benefits that the customers will gain from it. There are two major dimensions that will differentiate the product from its competitors in the market. These are "lower price" and "more benefits" than those being sold at a higher price.  POSITIONING OR PERCEPTUAL MAP Market positioning is usually done with the help of the positioning or perceptual map. The positioning or perceptual map shows the position of similar products competing in the market as perceived by the customers. The different products are represented in the form of cycles and are plotted on the perceptual 1nap as low or high in terms of price and quality. The size of the circle represents the 1narket share of the product.  EVALUATING THE BENEFITS OF EVERY MARKET POSITION – Once the 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 the product must have. It is highly suggested, however, that it must have at least one attribute which 1s considered distinct from other products. The entrepreneur must strongly promote the said attribute or benefit to the consumers.  The following criteria may be considered in identifying the attributes or benefits to be promoted: 1. Identifiable. The benefit or attribute is easily associated with the product. The customers should be able to 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 THE MARKET POSITION The last phase of market positioning after differentiating the product from the others in terms of benefit or attribute 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.  In addition, the entrepreneur may also consider the following guide questions in deciding the market position of the product: l. 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's price in spite of its benefits? 3. Will the product be sold at the same price as the competitor's because they have similar benefit? 4. Will the product be sold at a lower price because it offers less benefits? 5. Will the product be sold at a higher price even if it offers less benefits?