ENTREP REVIEWER.docx

**ENTREP REVIEWER** **Concept of Entrepreneurship & Entrepreneurial Competencies** **THE CONCEPT OF ENTREPRENEURSHIP** - The concept was first established in the 1700s, and it has evolved ever since." To most, entrepreneurship means putting up a business. - In the 20th century, an econom...

**ENTREP REVIEWER** **Concept of Entrepreneurship & Entrepreneurial Competencies** **THE CONCEPT OF ENTREPRENEURSHIP** - The concept was first established in the 1700s, and it has evolved ever since." To most, entrepreneurship means putting up a business. - In the 20th century, an economist named Joseph Schumpeter (1883-1950) studied how the entrepreneurs are motivated to look, innovate, and create new and better ways of doing business. - Business expert Peter Drucker (1909-2005) took this idea even further and described an entrepreneur as someone who searches for things to change - Most economists and businesspeople agree that entrepreneurship is a necessary component in encouraging economic growth. It also gives employment opportunities to the increasing workforce and helps resolve poverty in the society. **What is Entrepreneurship** - It is described as the process of creating something new whether it is a product or a service that brings benefit by devoting the time and energy needed to consider the financial, psychological and social risks, and achieving the possible incentives for financial and personal satisfaction and freedom - Another element that is important in becoming an entrepreneur is **passion.** **ENTREPRENEURIAL COMPETENCIES** 1. **Initiative -** Greeting customers upon entering the door of a fastfood shop and thanking them when leaving. 2. **Sees and acts on opportunities -** Jollibee started its business as an ice cream parlor, found out that Filipinos wanted hamburgers being offered by McDonalds, and later created its own line of hamburger sandwich products. 3. **Persistence -** *KFCs new products come out every three months and test how customers accept it as part of their effort to pull more customers to their restaurants* 4. **Information Seeking -** Seeking information or asking questions to clarify customer's needs and concerns. 5. **Concern for Work Quality -** Jollibee having a standard from measurement of every ingredient up to number of minutes a meal should be served to the customer. 6. **Commitment to Work Contract -** Accepting full responsibility for problems and therefore ready to provide resolution. 7. **Efficiency Orientation -** *Using video presentations product write-ups and posted on social media platforms as marketing tools.* 8. **Systematic Planning *-*** ("Failing to Plan is Planning to Fail".) - Making and formulation plan of actions to follow for smooth operation. 9. **Problem Solving -** *Changing strategies in case of problems to reach organizational goals.* 10. **Self-Confidence -** Show confidence in one\'s ability to carry out tasks, particularly in difficult situations. 11. **Assertiveness -** Communicate to others what they must do and not to. 12. **Persuasion -** Convincing someone to buy a product or service. 13. **Use of Influence Strategies** **CHARACTERISTICS OF AN ENTREPRENEUR:** - **AMBITION** - **ENTHUSIASM** - **CREATIVITY** - **DECISION-MAKING** - **PERSEVERANCE** **Market Segmentation** 1. **What is a Market?** - A environment in which two or more parties participate in the exchange of goods, services, and information is called a market. Ideally a market is a place where two or more people are interested in the buying and selling. - The two parties involved in a transaction are called seller and buyer. - In return for money the seller sells goods and services to the buyer. In the market to be competitive, there needs to be more than one buyer and seller. 2. **What is Segmentation?** - "Segmentation refers to a process of bifurcating or dividing a large unit into various small units which have similar or related characteristics." **Market Segmentation** - Market segmentation is a marketing term dividing the entire market into smaller subsets of customers with specific tastes, demands and expectations. - A market segment is a small unit composed of likeminded individuals within a large market. - One segment of the industry is absolutely different from the other. - A market segment includes individuals with common preferences and thinking along the same lines. - Individuals from the same group react in a manner similar to market fluctuations. **Basis of Market Segmentation Gender** - Marketers are separating the market into smaller, gender-based divisions. Men and women have different desires and expectations, and thus require segmentation. - Companies need different marketing approaches for men which obviously will not work for women. - A woman does not buy a product intended for men and vice versa. - Gender segmentation is significant in many industries such as cosmetics, clothing, jewelry. **Age Group** - Division based on age group of the target audience is also one of the ways of market segmentation. - The products and marketing strategies for teenagers would obviously be different than kids. - Age group (0 - 10 years) - Toys, Nappies, Baby Food, Prams - Age Group (10 - 20 years) - Toys, Apparels, Books, School Bags - Age group (20 years and above) - Cosmetics, Anti-Ageing Products, Magazines, apparels etc. **Income** Marketers divide the consumers into small segments as per their income. Individuals are classified into segments according to their monthly earnings. The three categories are: - High income Group - Mid Income Group - Low Income Group **2. Types of Market Segmentation** **Psychographic segmentation** - Individual behaviors are the basis for such segmentation. The attitude, interest, and value of the individual enables marketers identify them into small groups. **Behavioral Segmentation** - Consumers\' loyalties to a brand help advertisers divide them into smaller groups, each category consisting of individuals loyal to a brand. **Geographic Segmentation** - Geographic segmentation refers to the classification of market into various geographical areas. A marketer can\`t has similar strategies for individuals living at different places. **Sources of Business Ideas & Product Life Cycle** **The Maslow's Hierarchy of Needs** - **Physiological Needs -** This is the first stage in the Maslow's Hierarchy of Needs. Basic needs are the requirements for human existence. If these requirements are not met, the human body cannot function properly - **Safety needs -** The second stage in the Maslow's Hierarchy of Needs. Once physiological needs are satisfied, safety needs take precedence and dictates behavior. - **Social Needs -** Third stage in the Maslow\'s Hierarchy of Needs, also known as the stage for love and belongingness. - **Esteem Needs -** The fourth stage of the Maslow\'s Hierarchy of Needs. Once basic needs have been satisfied, esteem needs become essential to an individual. - Self esteem - Respect - Achievement - Confidence - Recognition - Accomplishment - **Self-actualization Needs -** The fifth and the last stage of Maslow\'s Hierarchy, it is the highest level of the Maslow's hierarchy. This level pertains to what a person's optimum potential is and realizing that potential. **Sources of Business Ideas** Business ideas are thoughts that when implemented can lead to income generalization. Entrepreneurs first come up with ideas from different sources that should lead them to starting a well-planned business. Here are some of the sources of business ideas: 1. **SURVEYS** 2. **TRAINING** 3. **EXPERIENCE** 4. **HOBBIES** 5. **TALENTS** 6. **MARKET GAPS** 7. **EVENTS** 8. **MEDIA** **Life Cycle Through the Stages** **1. At the Introduction stage the product comes to the market and the business looks to get a foothold on the sales ladder by:** - Establishing branding and assuring the market of the quality of the new product. - An initial low pricing policy to get into the market, though with little competition, price may be high initially to recoup development costs. - Selection of a distribution model to get the product onto the market. - Promotion of the product through aiming it at specific target groups such as online forums. **2. After successful Introduction comes the Growth stage. This will look to take developments at the first stage up to another level by:** - Maintaining the quality of the product and adding any extra services or support that becomes obvious during introduction. - Keeping the price at a good level to maintain sales growth. - Increasing distribution and sourcing new, faster ways of getting the product onto the shelves. - Marketing campaigns aimed at a broader audience and at growing market share for the product. **3. With growth established, Maturity is the next stage of the life cycle. The business deals with this by:** - Adding features that will make the product differ from the inevitable competitors that enter the market. - Cutting price to counter competition. - Revising distribution channels and using incentives to encourage stores to stock the original product in preference to newcomers. - New promotions that aim to show differences between products. **4. When the Decline happens, the business will consider:** - Keeping the product on the market but adding or removing features or finding new uses for it. - Reducing costs and production and keeping it just for a niche segment of the market. - Discontinuing the product or selling the production rights to another company. **SWOT Analysis & PESTEL Analysis** **PESTEL: A powerful complement to SWOT** The term 'PESTEL' refers to the domains it considers: Political, Economic, Social, Technological, Environmental and Legal. PESTEL involves identifying the factors in each of these six domains that are relevant for the project being considered." **Conduct a SWOT Analysis** A SWOT analysis is used to determine your internal abilities as well as external factors that may impact your performance. SWOT is an acronym of strengths, weaknesses, opportunities and threats. - **STRENGTHS -** Strengths are internal, positiattributes of your company. These are things that are within your control. - **WEAKNESSES** - Weaknesses are negative factors that detract from your strengths. These are things that you might need to improve on to be competitive. - **OPPORTUNITIES** - Opportunities are external factors in your business environment that are likely to contribute to your success. - **THREATS** - Threats are external factors that you have no control over. You may want to consider putting in place contingency plans for dealing them if they occur. **7P's of Marketing Mix** 1. **PRODUCT** - **Based on use:** - CONSUMERS GOODS - CONVENIENCE GOODS - SHOPPINGS GOODS - SPECIALTY GOODS - INDUSTRIAL GOODS - **Based on durability** - **Durability Goods** - products which are used for a long period - **Non-Durability** - products that are normally consumed in one go or last for a few uses - **Based on tangibility** - **Tangible goods** - can be touched and seen - **Intangible goods** -- can\`t be touch and no shape 2. **PRICE** - PRICING AND FACTORS AFFECTING PRICING DECISIONS - **COST** - **DEMAND** - **COMPETITION** - **MARKETING** - **GOVERNMENT REGULATION** 3. **PLACE** - **TYPES OF CHANNELS OF DISTRIBUTION** (a) Zero stage channel of distribution #### (b) One stage channel of distribution \(C) Two stage channels of distribution #### (d) Three stage channels of distribution ### **FACTORS AFFECTING THE CHOICE OF DISTRIBUTION CHANNEL** - NATURE OF MARKET - NATURE OF PRODUCT - NATURE OF THE COMPANY - MIDDLEMEN CONSIDERATION 4. **PROMOTION** - ADVERTISING - PUBLICITY - PERSONAL SELLING - SALES PROMOTION 5. **PEOPLE** - PEOPLE WHO MAKE THE PRODUCT - PEOPLE WHO BRING THE PRODUCT TO THE CUSTOMERS - PEOPLE WHO TALK TO THE CUSTOMER 6. **PROCESS** - Website user experience - Delivery time - Delivery methods and service - In-store wait time - Communicating with customer support - Aftercare 7. **PHYSICAL EVIDENCE** The final P refers to the physical context and paraphernalia (such as receipts, "thanks for ordering" cards, confirmation emails and PDF invoices) that come along with the product.