Entrepreneurship Reviewer PDF

ENTREP REVIEWER **What is ENTREPRENEURSHIP?** - process of creating incremental wealth through the efforts of individuals who find new and useful ways to employ resources that lead to the creation of new products, services or technologies" (UP ISSI, 2012) **Entrepreneurship is...**...

ENTREP REVIEWER **What is ENTREPRENEURSHIP?** - process of creating incremental wealth through the efforts of individuals who find new and useful ways to employ resources that lead to the creation of new products, services or technologies" (UP ISSI, 2012) **Entrepreneurship is...** - the act of creating a business or businesses while building and scaling it to generate a profit - an important driver of economic growth and innovation - what people do to take their career and dreams into their hands and lead it in the direction of their own choice. - about building a life on your own terms. No bosses. No restricting schedules. And no one holds you back. - French word *"entre",* to enter and *"prende"* to take - someone who starts a new business, recognizes opportunities, organizes something new that will provide value to customers, and willingly accepts the financial risk associated with the new business venture. **What is ENTREPRENEUR?** **An entrepreneur is\...** A person who sets up a business with the aim to make a profit and creates a new business, bearing most of the risks and enjoying most of the rewards. An innovator, a source of new ideas, goods, services, and business/or procedures. Playing a key role in any economy, using the skills and initiative necessary to anticipate needs and bring good new ideas to market. **Importance of Entrepreneurship** 1\. Entrepreneurship generates new wealth in an economy. 2\. Entrepreneurship decreases poverty. 3\. It creates opportunities, ensures social justice, instills confidence and stimulates the economy. 4\. Entrepreneurship improves productivity 5\. Entrepreneurs create jobs. 6\. Entrepreneurs innovate. 7\. Entrepreneurs create innovation and social change 8. Entrepreneurs give to society **WALT DISNEY -**The man who has affected generations to come with his cartoon creations, was once considered a failure. Disney was fired by the editor in 1919 from his job at the Kansas City Star paper because he "lacked imagination and had no good ideas." However, the man who brought us Mickey Mouse and a slew of other characters didn't stop failing there. **COLONEL SANDERS**- Sanders worked many jobs including fireman, tire salesman, insurance salesman, and of course, a cook. He brewed up his secret chicken recipe between 1939-1940 when he figured out how to pressure fry the chicken in a faster and more consistent product all the time. He was at the age of 50 when that happened. **HENRY FORD**- Many people know Henry Ford for the Ford Motor Company, one of the most successful automotive companies of all time. However, what they don't know is that Ford failed two times before that abruptly resulted in bankruptcies, prior to successfully launching the present incarnation of his company. **BILL GATES**- Although Gates failed at his first business, it didn't discourage him from trying again. He didn't want to give up because the sheer notion of business intrigued him. He was cleverly able to put together a company that revolutionized the personal computing marketplace. And we all know just how successful that was for him. **Nature and Development of EntrepreneurshipORIGIN** - Stems from French - Means between-taker or go-between **MIDDLE AGES** - Actor and person - In-charge of large scale production **17th Century** - Person bearing the risks of profit (loss) **Development of Entrepreneurship Theory1725** - Richard Cantillon - Person bearing risk is different from one supplying capital **1803** - Jean Baptiste Say - Separated profits of entrepreneur from profits of capital **1876** - Francis Walker - Distinguished between those who supplied funds and received interest **1934** - Joseph Schumpeter - Entrep.is an innovator & develops untried technology **1961** - David McClelland - Entrep. is an energetic, moderate risk-taker **1964** - Peter Drucker - Entrep. maximizes opportunities **1975** - Albert Shapero - Entrep. takes initiative, organizes some social and economic mechanism & accepts risks of failure. **1980** - Karl Vesper - Entrep. seen differently by economists, psychologists, business persons and politicians **1983** - Gifford Pinchot - Intrapreneur is an entrepreneur within an already established organization. - Robert Hisrich - Entrep. is the process of creating something different with value by devoting the necessary time and effort, assuming the accompanying financial, psychological, and social risks, and receiving the resulting rewards of monetary and personal satisfaction. **Who is an Entrepreneur?** - Takes risk - Start something new - An innovator - Developing something unique - An entrepreneur is defined as, \"a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk\". **CHARACTERISTICS OF AN ENTREPRENEUR** - An entrepreneur is somebody who has IDEAS and makes this ideas happen or come to life - An entrepreneur must have some BUSINESS SKILLS , skills of organizing and running a business - An entrepreneur is somebody who assumes and calculate RISKS and is willing to invest his resources in a business undertaking he himself conceptualized. - An entrepreneur DESIRES TO MAKE PROFIT, spot opportunities and turn these opportunities into profitable business ventures. - Other important characterics of an entrepreneur :- creativity- independence- hardwork- perseverance- need of luck **ROLES OF AN ENTREPRENEUR**Perceives opportunities in the environmentTake risksMobilizes capitalIntroduces innovationOrganize labor and productionMakes decisionPlans aheadSells his product for a profit**Traits of an entrepreneur**Identify and Evaluate the Opportunity Develop a Business Plan.Resources Required.Manage the enterprise. **What is entrepreneurship?** Process Creating Something new Assuming risks Rewards - ability of an individual to determine and come up with the proper combination of the resources available in his environment and transform this into an output of either goods orr services, and obtain a fair profit at he price the entrepreneur sets. - capacity and willingness to develop, organize and manage a business venture along with any of its risks in order to make a profit. - The word \'entrepreneur\' derives from the french expression \'to take up.\'\ \ \'Entrepreneur\' refers to the trait of taking up new ideas, products and concepts in the marketplace. **The Entrepreneurial Decision Process**Entalls movement From present lifestyle To forming new enterprise **The entrepreneurial process**Identify and Evaluate the Opportunity.Develop a Business Plan.Resources Required. Manage the enterprise. **CONTRIBUTIONS OF ENTREPRENEURSHIP TO THE ECONOMY** - Entrepreneuship employs the various resources present in the economy - Entrepreneurship need manpower for their business operations - It is said that entrepreneurship is the backbone of the economyEntrepreneurs has the ability to innovate goods and services - Entrepreneurs has the ability to gain international popularity and prestige for their country - Entrepreneurs are willing to take risks , risks that society will otherwise hesitant to take - Entrepreneurs also profoundly inspire budding and potential entrepreneurs **Principles of Entrepreneurship1. Be a Solution Provider** You must note that entrepreneurship is not about profitability at first but it's about providing solutions.\ \ "Look for a way to make life easy for others"**2. Have a Vision\ **\ "Vision is the art of seeing what is invisible to others". Have a defined purpose and pursue it.\ "Successful entrepreneurs are those that were able to transform their vision into reality"**3. Choose the Right Team\ \ **When assembling your team, it is imperative to gather a team with the same mindset and attitude towards achieving a common goal. Your team must be motivated and dedicated.\ \ "Good team work builds speed"**4. Viable Product/Service\ \ **Your business should easily be accessible to your target customers. Always give your customers room for feedback or suggestions on how your product/service can be better.\ \ "Good products most times sell itself"**5. Capital\ **\ Good business plan always draw investors. Capital should be your least worry when you have a solution. Entrepreneurship is all about solution. When your idea is great, you can easily get investors or government loan.\ \ "Capital isn't scarce, vision is" **6. Accountability\ **\ As an entrepreneur, you are accountable to the success or failure of your business, not your employees, investors or advisors.\ \ "Accountability breeds responsibility"**7. Growth and Marketing\ \ **Every successful business grew over the years. Success in business is not a one-time event; it is an on-going process. You must give room for growth. Do not be content with the success of yesterday; always strive to beat your own record.\ \ "Without continual growth and progress, such words as improvement, achievement, and success have no meaning"**8. Know Your Customer\ \ **Your customer base determines the life of your business.\ \ "Always treat your customers as special guests"**9. Priorities\ \ **For success in business, you must categorize things in order of importance. Set your priorities based on your goals and do not deviate. Your investors should not make you lose focus on your dream. Your target should always be defined.\ \ "Things which matters most must never be at the mercy of things which matter least".**10. Never Give Up\ **\ If you persist, you will have no choice than to succeed. In entrepreneurship, persistence and determination is supreme.\ \ "Never, Never, Never Give Up"**Business Plan**formal document that clearly defines a business idea and its feasability. It is often used for planning a new venture, a business expansion, and reviewing a businesses sucess or failure. It is most often used as a tool for investors, bankers, venture capitalists, and angels in acquiring startup capital. **Target Customers and the Main Value Proposition** **Target Customers** - must be of sufficient size, sufficient paying capacity, and have sufficient interest to purchase the product being offered by the enterprise.**Main Value Proposition** - is the unique selling proposition of the enterprise **Market Demand and Supply, Industry Dynamics and Macro Environmental Factors** - The business plan should estimate the total market supply and demand for the product offerings to include the other segments of a bigger market. - The Business plan should determine the major critical factors that influences the market demand and supply. **Market Potential and ProspectsMarket Potential**- is based on the estimated number of possible customers who might avail of the product or service. **Factors to consider of a buying customer**1. Their purchasing power or disposable income2. Their proximity or accessibilty to the goods or services3. Their individual desires and preferences4. Their age or generational grouping5. Their social, cultural, or ethnic background6. Their peer group preferences7. Their gender8. The season of the year9. Their personal identification with trend setters10. Their educational attainment11. Their technical proficiency and product expertise12. Their motivational impetus13. Their lifestyle preferences14. Their susceptibility to certain advertising and promotional appeals**Concepts about Product and Servicesproduct** can be defined as anything that we can offer to a market for attention, acquisition, use or consumption that could satisfy a need or want. **SERVICE** is an intangible item, which arises from the output of one or more individuals **The Difference of Product and Service PRODUCTS** - **i**t is tangible - It may be an asset sometimes. Eg. Fridge, tv set - Quality standards can be attained - Physical possession is possible - It can be stored - It can be transported. - Assembling is very important. - The producer and the seller may be different persons. - Skill of the seller alone cannot determine sale. - Production and distribution need not take place simultaneously. - Packing plays a crucial role in the marketing of any product. - Both Brand name and Trade name are important in the marketing of any product. - Labelling is an integral part of marketing. It is required as per law. **SERVICE** - It is Intagible - it involves expenditure without any tangible return benefit. - It is very difficult to attain quality standards - Physical possession is not possible. - It cannot be stored - It cannot be transported. - Assembling has no relevance at all. - The producer of service is the seller too, e.g., medical and legal services. - Skill of the service provider is the deciding factor in most cases, e.g., legal, catering and medical services. - Production and distribution of service will have to be done simultaneously, e.g., provision of electricity. - It has no relevance in the marketing of service. - Brand mark and Trade name are important in the marketing of services. - It has no relevance **Assessing Competition**In order to asess one\'s strengths and weaknesses, there must be a comparison made with the closest competitors. Profiling these competitors will help the enrepreneur gauge their strengths and weaknesses and it will enable them to create a strategy.**Estimating Market Shares and Sales**Entrepreneur must define the market coverage or reach he or she wants to serve. The entrepreneur must determine the broad market segments within the area or total targeted population **The Potential Market and the Market Need** **The Potential Market** **Potential market** is the part of the total population that has shown some level of interest in buying a particular product or service. **Potential market is also called Total addressable market (TAM) (MBA Skool Team, 2018).** **Potential market** is the part of the market you can capture in the future. It includes the demographic groups that are not currently your customers but could become customers in the future (Lake, L, 2019).**Market potential** is the total demand for a product in a given business environment (Bhasin, H., 2018). **The Importance of Potential Markets (Lake, L., 2019)\ **\ Potential markets are an important part of a business\'s future growth.\ \ Ensure the future of your business by identifying new customers.\ \ Think proactively about ways for your business to grow and change. Show the potential of your business to investors or collaborators.\ \ Increase your revenue.\ \ Create a plan B that will weather changes in the economy or market.**Available Market-** Prospects who are willing and capable (have sufficient resources) buyers, and have access to a particular market or service.- Defined as the number of people who are both willing and capable of buying a particular product or service in a particular market (MBA Skool Team, 2020).**Target Market** - Refers to a group of potential customers to whom a company wants to sell its products and services. - 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. (Kenton, W., 2019). **Penetrated Market** - set of customers or clients who are already using a particular product or service. A **penetrated market** means that the potential users of a product or service are aware of it, and in many cases are active consumers of it. **The Market Need** 1. **Need** motivating force that compels action for its satisfaction. Needs range from basic survival needs (common to all human beings) satisfied by necessities, to cultural, intellectual, and social needs (varying from place to place and age group to age group) satisfied by necessaries 2. **Market** a place where two parties can gather to facilitate the exchange of goods and services. refers to an arrangement whereby buyers and sellers come in close contact with each other directly or indirectly to sell and buy goods (Shaikh, S., retrieved 2020).**Existing customers:** People who have already purchased your product. **Prospects:** People who have not yet purchased your product but are considering it.**Target market users:** People in your target market who are not currently looking for a solution. **WHAT IS MARKETING?-** a process that depends on customer's needs & demands. - Needs & demands are dynamic that changes time to time so marketing definition change according to time period. **Marketing** has been defined as a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. **What is a Marketing Mix?-** The tools available to a business to gain the reaction it is seeking from its target market in relation to its marketing objectives- 7Ps -- Price, Product, Promotion, Place, People, Packaging and Positioning- Traditional 4Ps extended to encompass growth of service industry **Marketing Strategy** consists of selecting a segment of the market as the company's target market and designing the proper "mix" of the product/service, price, promotion, and distribution system to meet the wants and needs of the consumers within the target market. 1. **PRODUCT**- Is something that is viewed as capable of satisfying a need or a want.- It can be an object, service, activity, person, place, organization or idea.- It is often identified with their brand names to distinguish them from other products in the market. **Four General Types** 1. **Breakthrough products** --offers completely new performance benefits, more convenient and easy to use ,create new demand and needs a higher level of customer education and orientation.2**. Differentiated products**- try o claim new space in the mind of the customer different from the space occupied by existing products 3. **Copycat products**- needs aggressive advertising may add to market demand but a greater cost than the leading brand4. **Niche products**- products with lower reach, lower visibility, lower prices and lower top of mind. 2. **PRICE** - Means the money value of a product or service expressed in terms of peso and or centavos.- It depends on the business objectives set by the enterprise. 1.Profit maximization2. Revenue maximization3. market share maximization4. Attainment of the desired prestige or quality leadership5. Penetration, survival, or liquidation6. Scarcity pricing or market skimming7. Cost recovery8. Subsidy pricing9. Marginal pricing A. Introductory or promotional Pricing- launching a new product B. Discount Pricing- may be give to loyal and regular customers to maintain their patronageC. Profit-Oriented ObjectivesTarget return- set a specific level of profitProfit maximization- charging higher pricesD. Sales-oriented ObjectivesE. Status-quo Objectives 1\. Differential pricing strategies2. Competitive pricing strategies3. Product-line pricing strategies4. Psychological and image pricing strategies5. Distribution-based pricing strategies 3. **PLACE** \- The third of the four Ps, Place, involves matters on how to make a product or service available to the public. - It is the science and system behind getting the producers to their end consumers. - It may well be one of the most complex design decisions to make for a firm. - Place implies that they either (a) set up their own distribution network, or (b) rely on the capabilities of other parties.- The primary purpose of place is to get the products from the producer to the hands of the end users. Sometimes this would be via direct selling or even online selling. Sometimes sales people may be involved. Sometimes a whole chain of distributions may be needed, ranging from wholesalers to jobbers and retail sellers. This P is therefore also concerned about options and strategies for setting up the distribution system. **Choice of location must be based on the following:**1**.** Image and location conditions.2. Exact fit to target customers.3. Clustering of competitor establishments.4. Future area development.5. Fiscal and regulatory requirements. 4. **PROMOTION** \- explicit communication strategy adopted by an enterprise to elicit the patronage, loyalty and support from customer and other stakeholder. **Promotion encompasses by the ff:**1. Direct communication2. Indirect through quality of product3. Indirect through packaging attractiveness4. Indirect by communicating to people5. Indirect by location 6. Pricing strategy - Promotion is the element in an organization's marketing mix that serves to inform, persuade and remind the market about the organisation and/or its products. **PROMOTIONAL MIXPersonal selling:** the presentation of a product to a prospective customer by a firm's sales executive.**Advertising:** paid, non-personal mass communication, in which the sponsor is clearly identified.**Sales promotion:** demand-stimulating activity designed to supplement advertising and co-ordinate personal selling.**Publicity:** a non-paid form of advertising that uses mass communication to stimulate demand.**Public relations:** a planned communication effort by an organisation to contribute to generally favourable attitudes and opinions toward an organisation and its products.**1.Advertising** - The activity or profession of producing information for promoting the sale of commercial products or services.**2. Branding** - An identifying symbol, words, or mark that distinguishes a product or company from its competitors. Usually brands are registered (trademarked) with a regulatory authority and so cannot be used freely by other parties. For many products and companies, branding is an essential part of marketing. **Brand-** is a name, term , design or symbol or other feature that distinguishes an organizational rivals in the eyes of the customer.\ \ **Brand equity-** is used to describe the value of having the well known brand name based on consumer perception **BRANDS** **Brand** Is a word, mark , symbol or a combination of them used to identify the marketers product of service.**BRANDMARK** is a non-registered design, symbol or product logo.**BRANDNAME** is a something which can be vocalized or spoken.**TRADENAME** is a registered company name.**TRADEMARK** is a brand registered under the Philippine Patent Office and therefore given legal protection. **TRADEMARK** can be recognized with the presence of any of the following **Words of symbols on product labels or package:**1. REG. phil pat off \-\-\-- meaning registered under the Philippine patent office2. R means registered3. \* \-\-\-- asterisk mark4. C -- copyright under5. Trademark under**IMPORTANCE OF BRANDING FOR SELLERS** 1\. BRANDING SIMPLIFIES SALES PROMOTION.2. BRANDING ENCOURAGES REPEAT SALES3. BRANDING PROVIDES PROTECTION AGAINST SUBSTITUTION.4. BRANDING MINIMIZE COMPARISONS.5. BRANDING AIDS IN SEMENTATION.6. BRANDING FACILITIES THE INTRODUCTION OF ITEMS.7. BRANDING AFFORDS GREATER PRICE STABILITY.8. BRANDED MERCHANDISE ARE PREFERRED BY MANY MIDDLE MAN. **Characteristics of good brand names**1.It must be easy to remember.2.It must suggest something about product benefits or use.3.It must be distinctive 4.It must be legally protected. **PROMOTION** **Endorsement** - A written or public statement by a celebrity, business or professional group extolling the virtues of a product and recommending the use of the product to the public. A product endorsement from an authoritative figure is a key element in business advertising and marketing campaigns.**Competitive advantage** -- promotion differentiate your product with your competitors. And provide edge in business.**TRIMP**-television,radio,internet, mobile and print media 5. **PACKAGING** - the first distinction of a product. A product could be easily recognized by it's appearance. **Purposes of packaging-** Provides product identification- Differentiate the product from its competitor- Lengthen the lifespan physically protects and extends usefulness of the product- Becomes environmental issue- Price of the product - It identifies the product, describes its features and benefits, and complies with government rules on specifying its contents, weight, chemical composition, and potency. - It differentiates the product from its competitors and even from its other brand offerings. - Packaging lengthens the lifespan, physically protects and extends the usefulness of the product. - Packaging has become an environmental issue by itself. - The aforementioned purposes of packaging have increased the cost of packaging and, therefore, the price of the product. **Reasons for packaging**a. product protectionb. for promotion c. profit possibilities **Packaging strategies**1. Family packaging 2. Reuse packaging 3. Multiple packaging 6. **POSITIONING** - Means placing/putting the enterprise in a particular target market.- A process of a marketers use to determine how to best communicate their products attributes to their target market based on their need , competitive pressure, available communication channels and carefully crafted messages. - It outlines what a business should do to market the product- Creates an image for product based on intended audience **Why is it necessary to do product positioning? Enterprise perspective** -- to address needs of the chosen target market**Competitive perspective**- to differentiate and distinguish itself from its competitors**Customer's perspective**- to let customer perceive the enterprise and its product and services in their mind.**How to do product positioning ?** - Enterprise can establish product positioning by starting own product creation or with their customer's outcome expectationThe competitive landscape of enterprise can be clearly mapped out by :**Latitude** --lays out what is important to the customer segments from their differing points of view.**Longitude** --in the marketing map represents the product features and attributes of competitors in the market place - The enterprise should be mindful of the main value proposition( MVP) to its customer relative to the its competitors - The enterprise must have endeavour to build a brand of each product for the ff:- To differentiate product to other product- Avoid commodity image- To fill space to customer mind 7. **PEOPLE** - People are the ultimate marketing strategy. - People sell and push the product. - People distribute, promote, price and sell the product. - To create customer awareness. - To arouse customer interest. - To educate customers as they evaluate their buying choices. - To close the sale and deliver the products.