Entrepreneurship Reviewer PDF

LESSON: ENTREPRENEURSHIP to constraints growth and sustainability of entrepreneurial undertaking, more ENTREPRENEURSHIP than half of the population sees business...

LESSON: ENTREPRENEURSHIP to constraints growth and sustainability of entrepreneurial undertaking, more ENTREPRENEURSHIP than half of the population sees business opportunity in the country and close to 70% believe that they have the ⮚ small business management necessary skills to seize the ⮚ formation of new venture to entrepreneurial opportunities in the economy. generate new ideas On the other hand, there is a high ⮚ creation of livelihood business closure rate mainly due to TY opportunities unprofitable business operations and ⮚ catalyst of economic difficulty in accessing financing to continue business operations. LI development As for the impact of ⮚ problem-solving activity entrepreneurship on the economic BI ⮚ innovation undertaking development of the country, only 10.2% of total early-stage entrepreneurial ⮚ risk taking endeavor activity or startup businesses envision to TA employ more than 5 workers in the next - process of recognizing an opportunity, 5 years, 5.5% offered innovative testing it in the market, and gaining products or services, and 2.7% are in the N resources necessary to go into business service industry. Eighty- two percent, is U into retail or wholesale business, while - creating a new business venture only 2% is in manufacturing and 4.4% is O ENTREPRENEURSHIP IN into services. THE PHILIPPINES CC The trend in entrepreneurship motivation, activity, and aspirations was also, the data showed the same pattern The results of the 2019 -A for a factor-driven economy where poor Philippine APS (Adult Population countries registered a higher percentage survey) and NES (National Experts of the population starting a business. Survey) show the confidence of 12 Philippines. Filipinos sustained their high perception on their capability to be an The results of the 2019 entrepreneur, their belief that there is Philippine APS (Adult Population good business opportunity in the Survey) and NES (National Experts country, and their view that Survey) show the confidence of Filipinos entrepreneurship is a good career in entrepreneurship as a mover to a option. better life and more progressive society. Media has played a very Although government policies, important role in generating more structure, and bureaucracy are seen as interest in entrepreneurship by featuring successful Filipino ⮚ creation of new ways of entrepreneurs and offering programs to encourage the formation and conduct of accessing financing through businesses. equity, ⮚ promotion of export capacity Improvement in the economy dampens to some extent the interest to and ability to integrate in the start a business given the availability of global supply chain, and more jobs during the last 10 years. More ⮚ enhancement of human capital startup businesses are put up because of a better opportunity for financial development for women and the TY rewards and independence rather than youth on entrepreneurship. as a necessity or due to unemployment. There is also a sustained increase in LI established businesses as the economy THE HISTORY OF improved. ENTREPRENEURSHIP BI To support the development of Entrepreneurship has been a small and medium enterprises, policy distinct feature of American culture recommendations are outlined to have TA since the American Revolution, but it more established businesses and to was not until the 1980s that it became a further the activity of Philippine popular topic. enterprises in the global market. N 1960 → Large diversified companies SUPPORTING U ENTREPRENEURSHIP IN 1970 → More government regulation, smaller companies emerge THE PHILIPPINES O 1980 → Volatile economic climate: CC ⮚ identification of industry priority beginning of technology revolution areas where the country can be 1990 → No job security, move to more competitive globally, -A service-based economy influenced by ⮚ evaluation of the regulatory technology environment for startup 12 businesses and ease of doing business, EVOLUTION OF THE TERM ENTREPRENEURSHIP ⮚ development of innovation capabilities of the business Jean Baptiste Say (1800) sector, o Entrepreneurship refers to the ⮚ introduction of entrepreneurship shifting of economic resources and its different forms in all out of an area of lower and into levels of education, higher productivity and greater yield Carl Menger (1871) Howard Stevenson (1992) o Entrepreneurship is, in its o Entrepreneurship is the pursuit essence, the finding and of opportunity beyond the promoting new combinations of resources currently under one's productive factors. control. Joseph Schumpeter (1910) Jeffrey Timmons (1994) o Entrepreneurship involves o Entrepreneurship is the ability to TY obtaining information, create and build a vision from calculation, an act of will and practically nothing. supervision Peter Drucker (1998) LI Harvey Liebenstein (1970) o Entrepreneurship is the process BI o Entrepreneurship is a reduction of starting one's own, new and of organizational efficiency small business. It is also the Isroel Kirzner (1975) process of innovation and new TA venture creation through four o Entrepreneurship is the (4) major dimensions- identification of market N individual, organizational, arbitrage opportunities. environmental, process-aided by U Albert Shapiro (1975) collaborative networks in government, education and O o Entrepreneurship involves a kind institution. of behavior that includes CC initiative taking, organizing and Robert Hisrisch (2001) recognizing social mechanism to o Entrepreneurship involves the turn resources and situation to creation process, requires the -A practical account, and the devotion of the necessary time acceptance of risks and failures. and effort, assumes the accompanying financial, psychic 12 Karl Vesper (1980) and social risks, and receives the o Entrepreneurship is the dynamic resulting rewards of monetary process of creating incremental and personal satisfaction and wealth independence W.Ed Mc Mullan and Wayne A. Long (1990) o Entrepreneurship is the building of new growth organization  WHO IS AN WHERE DO YOU START? ENTREPRENEUR? Think about WHO is going to In the U.S., approximately 4% of want your product/service, what they the adult population is actively involved will PAY for it, what you will NEED to in starting a business at any given time. carry it off, and how you will ΜΑΚΕ One out of every two adults has ΜΟΝEY someday. That is, make a PLAN. tried to start a business at some time in Success depends on positive cash his or her life. flow, growth, and value creation. TY Entrepreneur: A person who Owners and investors who forget organizes and manages an enterprise, that tend to get "naturally deselected" especially a business, usually with LI considerable initiative and risk. Somehow, someday... you are going to have to earn POSITIVE CASH Initiative: Readiness and ability in BI FLOW. initiating action. You need more than a revenue Risk: The hazard or chance of loss. TA model (but you do need that). You need a An entrepreneur is someone VALUE model. who perceives an opportunity and N creates an organization to pursue it. REVENUE MODELS U WHAT DOES IT TAKE TO BE Revenue comes from: SUCCESSFUL? O Selling or licensing a product Selling or licensing a service CC "In entrepreneurship, luck is Creating a transaction pipeline where preparation and opportunity Trading products or services meet." Selling advertising -A Investing "The idea is not what is important. In entrepreneurship; ideas THE IMPORTANCE OF 12 are a dime a dozen. Developing the idea, implementing it, and building a VALUE CREATION successful business are the important things." A successful business is one that delivers value to its customers and "Would-be entrepreneurs who creates value for its owners. are unable to name customers are not ready to start a business. They have only Value is delivered to your customers found an idea and have not yet identified when you do something for them. a market need."  Better Cheaper Creating a new or improved product, process, or service Faster Cooler Different Staying ahead of the competition through constant improvement Contemporary Views on and innovation Entrepreneurship: Lloyd Shefsky — entre means “enter”, pre means “before”, neur means “nerve UNDERSTANDING THE ROLE OF center / idea” ECONOMICS IN ENTREPRENEURSHIP TY Prof. Robert Nelion — a person who is able to look at the environment, marshal Link of Economics and Entrepreneurship resources, and implement action to LI maximize those opportunities. The ultimate aim of Applied Economics is to increase human welfare Karl Vesper — entrep is now concerned by the investigation and analysis of BI in different professions. economic problems of the real world. Jospeh Schumpeter — entrep as doing Business are created ideally to TA things that aren’t generally done in the address persisting market problems ordinary course of business routine. (non-satisfaction of human needs and N wants). However, it is likely that none of U these will work for long, so continuous The 4 Basic economic questions improvement and innovation are are answered by the interaction of O essential. supply and demand. CC Value is created for the owners when: Demand is the schedule of various quantities of commodities which buyers 1. You do more with their money than are willing and able to purchase at a -A they could do with it themselves given price time and place. 2. You invest in productive activities Various factors affecting demand include that earn rates of return greater than the following: 12 their risk-adjusted costs of capital. Income 3. The present value of future cash Population flows exceeds the startup costs. Taste and preferences Price expectation Value is created by: Prices of related goods Exploiting proprietary physical resources Possessing proprietary knowledge or expertise, Law of Demand When supply is equal to demand, price remains constant. This is the ceteris paribus, (all other things market price or Equilibrium Price. It equal), means both sellers and buyers by mutual agreement. as PRICE increases, quantity demanded decreases, and as price Supply and Demand Relationship decreases, quantity demanded increases. Now that we know the laws of Supply supply and demand, let's turn to an example to show how supply and TY is the schedule of various demand affect price. quantities of commodities which producers are willing and able to Imagine that a special edition CD LI of your favorite band is released for produce and offer at a given price, place P1,000.00. Because the record and time. BI company's previous analysis showed that consumers will not demand CDs af a Various factors affecting supply include price higher than P1,000.00, only ten TA the following: CDs were released because the opportunity cost is too high for suppliers Technology to produce more. N Cost of production Number of sellers If, however, the ten CDs are U Prices of other goods Price demanded by 20 people, the price will expectation subsequently rise because, according to O Taxes and subsidies the demand relationship, as demand increases, so does the price. should CC Law of Supply prompt more CDs to be Consequently, the rise in supplied as the supply ceteris paribus (all other things relationship shows that the higher the -A are equal) price, the higher the quantity supplied. as price increases, quantity If, however, there are 30 CDs supply also increases, and as price 12 produced and demand is still at 20, the decreases, quantity supply also price will not be pushed up because the decreases. supply more than accommodates Interaction of The Law of Supply and demand. In fact after the 20 consumers Demand: have been satisfied with their CD purchases, the price of the leftover CDs The law of supply and demand may drop as CD producers attempt to states that when supply is greater than sell the remaining ten CDs. demand, price decreases. When demand is greater than supply price increases.  The lower price will then make LESSON 1: RELEVANCE OF the CD more available to people who had ENTREPRENEURSHIP TO AN ORGANIZATION previously decided that the opportunity cost of buying the CD at P1,000.00 was Development of Managerial Capabilities too high. - this means that one of the EQUILIBRIUM benefits an entrepreneur gets is to develop his managerial skills. When supply and demand are equal (i.e. when the supply function and Creation of Organizations demand function intersect) the economy TY is said to be at equilibrium. At this point, - which means that because of the allocation of goods is at its most entrepreneurship many organizations efficient because the amount of goods will exist. LI being supplied is exactly the same as the amount of goods being demanded. Improving Standard of Living BI Thus, everyone (individuals, - this means that entrepreneurship can firms, or countries) is satisfied with the lift up the economic status of an TA current economic condition. At the given individual. price, suppliers are selling all the goods that they have produced and consumers Means of Economic Development N are getting all the goods that they are demanding. - this means that not only the life of the U entrepreneur is improved but also the Points in Business Opportunity society where the business is located. O Identification CONCEPT OF CC 1. Entrepreneurs see OPPORTUNITIES ENTREPRENEURSHIP DIFFICULTIES (market problems). Derived from French verb -A 2. Entrepreneurs assume that EXISTING "entreprendre," meaning "to BUSINESSES SOLUTIONS aren't undertake." sufficient, thus would need to engage in Entrepreneurs undertake 12 the same business as reinforcement. enterprise risks. Entrepreneurship is the creation 3. Sometimes, entrepreneurs risk in process of an enterprise. engaging in a business without existing Entrepreneurs generate unique demand and thus create NEW DEMAND. ideas for profitable market and societal solutions.  FACTORS AFFECTING 4. Opportunity seeker - an entrepreneur ENTREPRENEURS must have the ability to be the first to see business chances. Personality Factors 5. Proactive – an entrepreneur can a. Initiative - doing things even before control a situation by making things being told. happen or by preparing for possible future problems. b. Proactive - which means he can classify opportunities and seize it. 6. Risk Taker – an entrepreneur has the courage to pursue business ideas. TY c. Problem Solver - which means he can retain good relations with other people. 7. Innovative - the entrepreneur has big business ideas and he does not stop LI d. Perseverance - meaning he will pursue improving and thinking of new things to get done regardless of worthwhile ideas for his business. BI challenges. CORE COMPETENCIES IN e. Persuasion - means that he can entice ENTREPRENEURS TA people to buy even if they don’t want to. Economic and Dynamic Activity f. Planner - he makes plans before doing N things and does not fail to monitor it. Entrepreneurship is an economic activity because it involves the creation U g. Risk-taker - which means that he is and operation of an enterprise with a willing to gamble but he will calculate it view to creating value or wealth by O first. ensuring optimum utilization of limited CC resources. Environmental Factors which include political, climate, legal system, economic Innovative and social conditions and market -A situations. The entrepreneur constantly looks or new ideas, thus he needs to be COMMON COMPETENCIES creative. IN ENTREPRENEURSHIP 12 Profit Potential 1. Decisive - an entrepreneur must be firm in making decisions. The entrepreneur can be compensated by his profit coming from 2. Communicator - an entrepreneur must the operation. have a convincing power. 3. Leader - an entrepreneur must have the charisma to be obeyed by his employees. Risk bearing source of advices to other entrepreneurs and would be business men. The entrepreneur needs to gamble but wise enough to offset the 2. Teacher- a graduate of an risk. entrepreneurship can use his knowledge in teaching. TYPES OF ENTREPRENEURS 3. Researcher - the entrepreneur can be employed as a researcher by an 1. Innovative Entrepreneurs - They are enterprise. those who always make new things by TY 4. Sales - the entrepreneurship graduate thinking of new ideas. They have the can apply as a salesman. ability to think newer, better and more economical ideas. LI 5. Business Reporter - the entrepreneur being expert in the field, can be 2. Imitating Entrepreneurs - They are employed as a business reporter BI those who don’t create new things but only follow the ideas of other LESSON 2:: RECOGNIZE A POTENTIAL entrepreneurs. TA MARKET 3. Fabian Entrepreneurs - They are skeptical about changes to be made in Entrepreneurial Ideas N the organization. They don’t initiate but Ø the creation of an entrepreneurial follow only after they are satisfied. U idea leads to the identification of 4. Drone Entrepreneurs - They are those entrepreneurial opportunities, O who live on the labor of others. They are which in turn results in the opening of an entrepreneurial venture. CC die-hard conservatives even ready to suffer the loss of business. Ø an innovative concept that can be 5. Social Entrepreneurs - They are those used for financial gain that is usually -A who initiate changes and drive social centered on a product or service that innovation and transformation in the can be offered for money. various fields such as education, health, 12 The Entrepreneurial Process of human rights, environment and Creating New Venture enterprise development. 1. Creation of entrepreneurial Ideas CAREER OPPORTUNITIES Figure OF ENTREPRENEURSHIP 2. Identification of entrepreneurial 1. Business Consultant - with the Opportunities expertise of in the field of entrepreneurship, he can be a very good 3. Opening of entrepreneurial Venture  ESSENTIAL IN 1. Changes in the environment ENTREPRENEURS Entrepreneurial ideas arise OPPORTYUNITY SEEKING when changes happen in the external environment.A person with an entrepreneurial drive views these changes positively. Entrepreneurial mind frame External environment refers to this allows the entrepreneur to the physical environment, see things in a very positive and societal environment, and optimistic way in the midst of difficult industry environment where the TY situation. Being a risk - taker, an business operates. entrepreneur can find solutions when 1.1 The Physical environment includes LI problems arise. a. Climate – the weather conditions. Entrepreneurial heart flame BI b. Natural resources – such as minerals, Entrepreneurs are driven by forests, water, and fertile land that occur passion; they are attracted to discover TA in nature and can be used for economic satisfaction in the act and process of gain. discovery. Passion is the great desire of an entrepreneur to achieve his/her N c. Wildlife – includes all mammals, birds, goals. reptiles, fish, etc., that live in the wild. U Entrepreneurial gut game 1.2 The Societal environment includes O the various forces like This refers to the ability of the CC entrepreneur of being intuitive. This also a. Political forces – includes all the laws, known as intuition. The gut game also rules, and regulations that govern means confidence in one’s self and the business practices as well as the permits, firm belief that everything you aspire -A approvals, and licenses necessary to can be reached. operate the business. Sources of Opportunities b. Economic forces – such as income 12 level and employment rate. There are many ways to discover opportunities. Looking at the big picture, c. Sociocultural forces – customs, some have noticed the emerging trends lifestyles and values that characterize a and patterns for business opportunities. society. While others are trying to find out their target market. The following are some d. Technological environment – new sources of opportunities: inventions and technology innovations. 1.3 The Industry environment of the For example, the use of firecrackers to business includes: celebrate New Year’s Eve is strictly prohibited. People without Competitors entrepreneurial interest will view the Customers ordinance as a plain restriction. Creditors However, for an entrepreneur, it is a Employees business opportunity to come up with a Government new product that will serve as a Suppliers substitute for firecrackers. For example, one factor in the 4. People’s interest TY physical environment that can easily change is the climate. The temperature is The interest, hobbies, and very high during summer but very low preferences of people are rich LI during the rainy season. An individual sources of entrepreneurial ideas, with entrepreneurial drive can be like the increasing number of BI extremely imaginative and inventive in Internet Cafés at present could identifying opportunities. He/she can lead to the strong attachment of venture on a business that responds to young people to computers. TA the needs of the people during summer and rainy season. 5. Past experiences N 2. Technological discovery and The expertise and skills advancement developed by a person who has U worked in a particular field may A person with entrepreneurial lead to the opening of a related O interest sees the possibility of business enterprise. business opportunities in any CC new discovery or because of the For example, an accountant who has use of the latest technology. learned the appropriate accounting and management skills and techniques in a -A For example, an individual with prominent accounting firm can start knowledge in repair and installation of a his/her business venture by opening machine engine discovers additional his/her own accounting firm. 12 engine parts that considerably reduce fuel consumption. Forces of Competition Model 3. Government’s thrust, programs, and It is also known as the “five policies forces of competition”. An industry environment is a The priorities, projects, competitive environment. programs, and policies of the Regardless of what product or government are also good services you have, competition is sources of ideas. always present. Competition – it is the act or process of business. This gives a threat to the trying to get or win something. For business. This can be noticed if there is example, the prices are lower when the presence of the following factors: there is a competition among the stores.These are the five forces Substantial capital requirement competing within the industry: Strict government policy Difficulty in accessing Buyers distribution channels Potential new entrants Economies of scale Rivalry among existing firms High cost of product Substitute products differentiation TY High switching cost 1. Buyers 3. Rivalry among Existing Firms LI are the ones that pay cash in exchange for your goods and services. Rivalry is a state or situation BI wherein business organizations are One example is the influence of competing with each other in a the price or in the bargaining strategy. particular market. For example, it TA The buyer has a strong and magnified depends on the marketing strategy of bargaining power. The threat of its your competitor, like giving freebies and bargaining power will be less if the special offers. The intensity of rivalry N following factors are noticed: among existing firms is characterized to the following factors: U There are several suppliers available in the market. Diversity of rivals O The buyer has the potential for Number of competing firms backward integration. Characteristics of the products or CC The cost of switching the services supplier cost is minimal. Increased capacity The product represents a high Amount of fixed costs -A percentage of the buyer’s cost. Rate of industry growth The buyer purchases large portions of the seller’s product 4. Substitute Products 12 or services. Substitute is one that serves the 2. Potential New Entrants same purpose as another product in themarket. For example, the consumers A new entrant is defined as decide to use margarine as a substitute companies or businesses that have the for butter. In case the price of butter ability to penetrate or enter into a increases, preferably the consumer will particular industry. For example, in the gradually switch to margarine. level of capital requirements, if the business requires huge capital, new entrants should decline to join the  A substitute product can give a a consumer should buy a big threat in the industry environment if company's product or use its the following factors are noticed: service used to convince a customer to Switching cost is low purchase a particular product or Preferences and tastes of the service to add a form of value to customers easily change their lives. Product differentiation is highly noticeable In creating Value Proposition, The quality of substitute entrepreneurs will consider the basic products dramatically improves elements: TY The price of substitute product is substantially lower Target Customer Needs/opportunity LI 5. Suppliers Name of the product Name of the enterprise BI The Suppliers are the one that provide something that is needed in Unique Selling Proposition (USP) business operations such as office TA supplies and equipment. In an example refers to how you sell your where supplies and services being product or services to your offered is unstable the intensity of the customer. You will address the N threat is strong in this kind of the wants and desires of your competitive force in the industry customers. U This can be noticed if there is the A. Target Market O presence of the following factors: Determines buyers with common CC The supplier has the ability for needs and characteristics. forward integration Suppliers in the industry are few, Targets prospective customers as a -A but the sales volume is high market segment. Substitute products are not readily available in the market Focuses marketing efforts on a market 12 The switching cost is very high more likely to buy from. The product or service is unique Chooses affordable, efficient, and effective products to reach potential LESSON 3: RECOGNIZE A POTENTIAL clients. MARKET Commonly used methods for segmenting Value Proposition (VP) the markets are follows.: is a business or marketing statement that summarizes why 1. Geographic segmentation – the total Variables to consider: market is divided according to geographical location. Perceptions Knowledge Variables to consider: Reaction Benefits Climate Loyalty Dominant ethnic group Responses Culture Customer Requirements. Density (either rural or urban) Customer requirements are the specific TY 2. Demographic Segmentation – divided characteristics that the customers need based on consumers from a product or a service. LI Variables to consider: There can be two types of customer requirements: Gender BI Age 1.Service Requirement Income ❖ Intangible TA Occupation products that Education customers can feel fulfillment Religion with. N Ethnic group ❖ Elements include on-time Family size delivery, smile service, and easy U payment. 3. Psychological Segmentation – divided ❖ Includes expectations for O in terms of how customers think and customer treatment and ease of believe buying process. CC Variables to consider: 2. Output Requirements: -A Needs and wants ❖ Tangible products with visible Attitudes characteristics. Social class ❖ Output requirements can be Personality traits 12 service-based or product-based. Knowledge and awareness ❖ Examples include on-time arrival Brand concept for a multi-cab and specifications Lifestyle for phone speakers. 4. Behavioral Segmentation – divided C. Market Size according to customers’ behavior pattern as they interact with a company. Market size is the approximate number of sellers and buyers in a specific market.  Entrepreneurs need to know market DATA COLLECTION is the most valuable size before launching a new product or tool in any type of research study. service. Inaccurate data collection may cause mistakes and ultimately lead to invalid Market size estimation involves results. (Edralin, 2016) estimating potential market, estimating customers likely to disliking the product TIPS in COLLECTING DATA or service, and estimating market share. Organize collected data as soon Market size is crucial for raising as it is available funding for a business. Know what message you want to get across and then collect data TY Market research will determine that is relevant to the message the entrepreneurs possible Collect more data customers in one locality LI Create more data Market size is the size of the Regularly run experiments arena where the entrepreneurs Challenge your assumptions BI will play their business. Take note of interesting or significant data LESSON 4: MARKET RESEARCH TA 3 DIFFERENT COLLECTION OF DATA USP TECHNIQUES Some tips for the entrepreneur on how 1. SURVEYS N to create an effective unique selling the most common way to gather U proposition to the target customers are: primary research with the use of Identify and rank the uniqueness of questionnaires or interview O the product or services character schedule. CC these can be done via direct mail, Be Very Specific over the phone, internet (e.g. Keep it short and simple (KISS) Google) or email, face-to-face or on the Web (e.g. Skype or Viber). -A When designing or constructing your MARKET RESEARCH own research questionnaire, remember 12 the following guidelines. (Edralin, 2016) ➔ also called as Marketing Research Process ★ Keep it as simple as possible ➔ the process of gathering, ★ Make sure it is clearly appealing analyzing and interpreting the and easy to read information about the products ★ Cluster or block related or the services to be offered for questions sale to the potential consumers ★ Move from complex questions to in the market (De Guzman, more specific questions 2018) ★ Make sure questions are concise and easily understood  ★ Avoid questions that are difficult It generates the highest response to answer rates in survey research. ★ Make sure response scales used allow the researcher to clarify are consistent with categories indefinite answers and when that are mutually exclusive necessary, seek follow-up information. (Leedy & Ormrod, 2. INTERVIEW 2001, pp.39) is one of the most reliable and Telephone interviews credible ways of getting relevant information from target less expensive and less customers. time-consuming, TY It is typically done in person the disadvantages are that the between the response rate is not as high as LI researcher/entrepreneur and a the face-to-face interview, but respondent where the considerably higher than the researcher asks pertinent mailed questionnaire. BI questions that will give 3. FOCUS GROUP DISCUSSION (FGD) - significant pieces of information about the problem that he will is an excellent method for TA solve. generating and screening ideas also helpful even when the and concepts. business has already started N can be moderated group because the customers’ feedback interviews and brainstorming U provides the entrepreneur a sessions that provide glimpse of what the customers information on user’s needs and O think about the business. behaviors. normally last from 15 to 40 CC minutes, but they can last longer, The following are considerations in the depending on the participants’ use of focus group discussions in market interest in the topic. research: -A in a structured interview, the The length of the session is researcher asks a standard set of between 90 and 120 minutes. questions and nothing more. Conduct focus groups discussion 12 (Leedy & Ormrod, 2001, with 8 to 10 participants per pp.38-39) group. Personal Interviews Assign an expert moderator / facilitator who can manage the traditional method of group dynamics. conducting an interview. Use a semi-structured or allows the researcher to open-format discussion establish relationships with Strive for consistency in the potential participants and group’s composition (for therefore gain their cooperation. example, it may not be advisable  to have business customers and 1. PRODUCT retail customers in the same marketing strategy typically focus group, their needs are very starts with the product. different) (Leedy & Ormrod, marketers can’t plan a 2001, pp.40- 41) distribution system or set a price LESSON 5: 7 P’s of Marketing and Branding if they don’t know exactly what the product will be offered to the MARKET MIX market. refers to any goods or services has been around as early as that are produced to meet the TY trade existed and that is quite consumers’ wants, tastes and long already. preferences. the only difference is that today goods can be categorized into LI everything is well outlined and business goods or consumer keeps evolving even further goods. A buyer of consumer a business mechanism used for goods may not have thorough BI effective marketing of the knowledge of the goods he buys products. and uses. is a set of controllable and TA Services can be divided into connected variables that a consumer services, such as hair company gathers to satisfy a styling or professional services, N customer better than its such as engineering and competitor. accounting U also known as the “Ps” in marketing. O CC 7’PS OF MARKETING MIX ➔ several important frameworks -A which you can utilize for the purpose of marketing your product and services. 12 ➔ a very crucial structure among these is the “7 P’s of Marketing. The framework of “7 Ps of marketing” includes product, place, price, promotion, people, packaging and positioning. Realizing these P’s in the most ideal manner can turn out to be very profitable, however, you should totally see each description of the 7 P’s first.  place matters for a business of any size. It is a crucial part of the marketing mix. the main function of a distribution channel is to provide a link between production and consumption Channel 1 contains two stages between producer and consumer - a TY wholesaler and a retailer. the wholesaler typically buys and LI stores large quantities of several producers' goods and then breaks into bulk deliveries to BI supply retailers with smaller quantities. 2. PLACE for small retailers with limited TA the second P in the Marketing order quantities, the use of Mix. wholesalers makes economic sense. N represents the location where the buyer and seller exchange Channel 2 U goods or services. also called the distribution contains one intermediary. O channel. In consumer markets, this is can include any physical store as typically a retailer. CC well as virtual stores or online retailer is a company that buys shops on the Internet. products from a manufacturer or wholesaler and sells them to end -A It is one thing having a great product, users or customers. sold at an attractive price. But what if: a retailer is an intermediary or ★ Customers are not near a retailer middleman that customers use 12 that is selling the product? to get products from the ★ A competing product is stocked manufacturers. by a much wider range of Channel 3 outlets? ★ A competitor is winning because called a "direct-marketing" it has a team of trained channel, since it has no distributors or sales agents who intermediary levels. are out there meeting customers the manufacturer sells directly to and closing the sale? customers.  example of a pricing strategy is the penetration pricing. It is when the price charged for products and services is set artificially low in order to gain market share. Once this is attained, the price can be higher than before. If you already have a good number of market share then you can slowly increase your TY price. There are several factors that affect a LI small business’ revenue potential. 1. most important is the pricing BI strategy utilized by you as the 3. PRICE owner of the business. third P in the Marketing Mix is 2. A right pricing strategy helps you TA price. define the particular price at the price is a serious component which you can maximize profits on sales of your product or N of the marketing mix. price is the value of money in service. U exchange for a product or 3. you need to consider a wide service. range of factors when setting O price is the amount or value that prices of your offerings. The a customer gives up to enjoy the different pricing strategies with CC benefits of having or using a its definition can be found in the product or service. Thus, table below. customers exchange a certain -A value for having or using the product – a value we call price. In commerce, price is determined by: 12 1. what a buyer is willing to pay, 2. a seller is willing to accept, 3. the competition is allowing to be charged. With product, promotion, and place of marketing mix, it is one of the business variables over which organizations can exercise some degree of control.  The following are the most common medium in promoting a product and this is called promotional mix. A. ADVERTISING Radio Advertising by means of radio gives the advantage of selecting the territory and audience to which the message is to be directed. TY cheaper than TV advertising. Television LI the latest and the fast-developing medium of advertising and is BI getting increased popularity these days. more effective as compared to TA radio as it has the advantages of sound and sight. on account of pictorial N presentation, it is more effective and impressive and leaves a U lasting impression on the mind O of the viewer. Print CC print media carry their messages 4. PROMOTION entirely through the visual mode. -A the fourth P in the Marketing Electronic Mix. refers to the complete set of can advertise electronically 12 activities, which communicate through your company website the product, brand or service to and provide important and the user. pertinent information to clients the idea is to create an and customers. awareness, attract and induce can protect some parts of your the consumers to buy the website through passwords and product, in preference over give access to member others. customers.  can also send advertisements via Many people use the term PR direct e-mail as part of your and advertising interchangeably, promotional strategy. PR involves sharing information with the public using platforms Word of Mouth that do not require a payment, Word-of-mouth advertising is such as social media or through important for every business, as press releases shared with each happy customer can steer magazines and newspapers. dozens of new ones your way. PR professionals package it's one of the most credible information and disseminate it in forms of advertising because a the hopes that it will be TY person puts their reputation on organically shared. The goal of the line every time they make a public relations is to shape public perception of a business, LI recommendation and that person has nothing to gain but presenting a positive image the appreciation of those who through various strategies to its BI are listening. various constituents. Generic C. PERSONAL SELLING TA promotion of a particular Personal selling occurs when an commodity is without reference individual salesperson sells a product, service or solution to a N to a specific producer, brand name or manufacturer. client. Salespeople match the U producers join together to benefits of their offering to the expand total demand for the specific needs of a client. O commodity, thereby helping their Today, personal selling involves own sales. the development of long CC these activities are often standing client relationships. self-funded through assessments Personal selling involves a selling on marketing called check-off process that is summarized in -A programs. the following Five Stage Personal Selling Process. 12 B.PUBLIC RELATIONS OR PR 1. Prospecting 2. Making first contact In public relations, the article 3. The sales call that features your company is 4. Objection handling not paid for. 5. Closing the sale The reporter, whether broadcast or print, writes about or films D. SALES PROMOTIONS your company as a result of any initiative undertaken by an information he or she received organization to promote an and researched. increase in sales, usage or trial of  a product or service (i.e., pesos at a price of initiatives that are not covered 3-for-100-pesos during the by the other elements of the promotional period. marketing communications or E. DIRECT MARKETING promotions mix). a promotional method that Sales Promotion Technique involves presenting information Free Gifts about your company, product, or service to your target customer ★ ways to utilize this particular without the use of an advertising sales promotion technique. A middleman. TY newly opened store, for example, a targeted form of marketing that may offer the first 10 customers presents information of potential free items worth 100 pesos. LI interest to a consumer that has Free Samples been determined to be a likely buyer. BI ★ Providing free samples is a technique used to introduce new Forms of Direct Marketing products to the marketplace TA Brochure Catalogs Fliers Newsletters ★ Samples give the consumer a Post cards Coupons Email Phone calls chance to see how well they like Text messages a product or try something they N otherwise would not normally 5. PEOPLE buy. U fifth P in the Marketing mix is Free Trial People. O Your team, the staff that makes it ★ A free trial is a way for a happen for you, your audience, CC consumer to try a new product and your advertisers are the while eliminating risk. people in marketing. ★ It may be used when a product is consist of each person who is -A unique to the marketplace. involved in the product or Customer Contests service whether directly or indirectly. 12 ★ Contests offer the customer a People are the ultimate chance to win prizes like cash or marketing strategy. store merchandise. They sell and push the product. Special Pricing People are one of the most important elements of the ★ used to offer consumers a lower marketing mix today. This is price for a period of time or to because of the remarkable rise of purchase in multiple quantities. the services industry. For example, a retailer may offer Products are being sold through a product that normally costs 35 retail channels today.  If the retail channels are not A. Natural deterioration: handled with the right people, ★ caused by the interaction of the product will not be sold. products with water, gases and Services must be first class fumes, microbiological nowadays. organisms like bacteria, yeasts The people rendering the service and molds, heat, cold, dryness, must be competent and skilled contaminants and insects and enough so that that the clients rodents. will patronize your service. The marketing efforts of people are to create customer TY awareness, to arouse customer B. Physical protection: interest, to educate customers, to ★ the packaging is also used for close the sale and to deliver the LI physical protection, which product. Therefore, the right include improving shock people are essential in the protection, internal product BI marketing mix in the current protection and reducing shock marketing scenario. damage caused from vibration, TA 6. PACKAGING snagging, friction and impact. sixth P in the Marketing Mix. C. Safety: a silent hero in the marketing N ★ a special kind of protective world. packaging is required for U refers to the outside appearance products that are deemed of a product and how it is harmful to those who transport O presented to the customers. them or use them. These the best packaging should be products include extremely CC attractive enough and cost inflammable gas and liquid, efficient for the customers. radioactive elements, toxic packaging is highly functional. It materials etc. The packaging -A is for protection, containment, should also be done so that information, utility of use and children could not easily use or promotion. dispose them. 12 Five Basic Functions of Packaging D. Waste reduction: 1. Protection: One of the major ★ Packaging also serves to reduce functions of packaging is to the amount of waste especially in provide for the effects of time case of food distribution. and environment for the natural and manufactured products. 2) Containment: This involves merging of unit loads for shipping. It starts with The protection function can be divided spots of adhesives on the individual into some classes. shippers that stick them together, straps of steel and plastic, entire coverings of promote the product that can influence shrinkable or stretchable plastic films customer purchase decision. and paper or corrugated wraps that Packaging Decisions: surround an entire pallet of product. i. Packaging concept: There are some special bulk boxes or pallet bins made from unusually strong ★ defines what the package should corrugated board or fabricated form be or do for the particular plastics or metal, the method of which product in terms of size, shape, depends on the type and weight of materials, color, text, and brand product and its protective needs. The mark and tamperproof ability TY cargo containers made of aluminum used to hold many pallet loads of goods ii. Engineering tests: can be transferred to or from ships, ★ ensure that the package stands LI trains and flatbed trucks by giant cranes. up under normal conditions 3) Information: The packaging conveys iii. Visual tests: BI necessary information to the consumers. The common information that packaging ★ to ensure that the script is provides include general features of the legible and colors are TA product, ingredients, net weight of the harmonious contents, name and address of the iv. Dealer tests: manufacturers, maximum retail price N (MRP). Packaging of medicine and some ★ to ensure that the dealers find U food products is required to provide the packages attractive and easy information on methods of preparations, to handle O recipes and serving ideas, nutritional v. Consumer tests: benefits, and date of manufacturing, date CC of expiry, warning messages and ★ to ensure favorable consumer cautionary information. Sometimes, the response color of the packaging itself provides -A some information. 7. POSITIONING 4) Utility of use: The convenience the seventh P in the Marketing packaging has been devised for foods, Mix is Positioning. 12 household chemicals, drugs, adhesives, When a company presents a paints, cosmetics, paper goods and a product or service in a way that host of other products. This type of is different from the competitors, packaging includes dispensing devices, they are said to be “positioning” prepackaged hot metals, and disposable it. medical packaging. refers to a process used by marketers to create an image in 5) Promotion: Companies use attractive the minds of a target market. colors, logos, symbols and captions to Solid positioning will allow a single product to attract different  customers for not the same If you don’t have answers to reasons. these questions, you should consider conducting formal or informal marketing Three basic concepts for positioning research to reach a better understanding 1. Functional Positions of your target market and the market deal with solving a problem, dynamics around it. providing benefits and getting a Step 2: Identify Your Competitive favorable perception from Advantages investors, stockholders and consumers A competitive advantage is some 2. Symbolic Positions trait, quality, or capability that TY deal with self-image allows you to outperform the enhancement, ego identification, competition. It gives your LI belongingness, social product, service, or brand an meaningfulness and affective advantage over others in fulfilment purchasing decisions. BI 3. Experiential Positions. Competitive advantage may deal with providing sensory or come from and or all of the cognitive stimulation. following: TA Steps of the Positioning Process Price: Something in your production process or supply chain may make it N Step 1: Confirm Your Understanding possible for you to provide comparable of Market Dynamics value at a lower cost than competitors. U At the start of the positioning Features: You may provide tangible or O process, you need a firm intangible features that your understanding of your target competitors do not: for example, more CC market and answers to the colors, better taste, a more elegant following questions: design, quicker delivery, personalized In which product, service, or service, etc. -A market category (also called the “frame Benefits: You may provide unique of reference”) do you plan to use this benefits to customers that your positioning? competitors cannot match. Benefits are 12 Which target segment is your intangible strengths or outcomes your focus for the positioning you are customer gets when they use your developing? offering. For example, time savings, convenience, increased control, What factors do these buyers enjoyment, relaxation, more choices, evaluate when they make a purchasing feeling better about oneself, being more decision? attractive, etc. How do these buyers view your Create a list of the things that make you competitors in the category? different from competitors in positive ways. Then identify which of these marketplace and the amount of factors are also competitive advantages: influence each competitor can the influential factors that help you place on each other. perform better in the marketplace and 4. Develop a positioning strategy cause customers to choose your product, Through the preceding steps, you service, or brand over other options. should achieve an understanding of what your company is, how Step 3: Choose Competitive your company is different from Advantages That Define Your Niche competitors, the conditions of Your list of competitive advantages the marketplace, opportunities represents a set of possible positioning in the marketplace, and how TY strategies you could pursue for your your company can position itself. product, service, or brand. The next step DEVELOPING A BRAND LI is to examine how these factors fit into customer perceptions of your broader NAME competitive set. Your goal is to pick a Branding will ultimately BI positioning approach that gives you a reside(s) in the mind of every unique and valued position in the consumers, thus, it plays a market that competitors are not TA significant role in every business. addressing. Brand Name is a name, symbol, How to Create an Effective Market or other feature that N Positioning Strategy? distinguishes a seller's goods or services in the marketplace. U Create a positioning statement Your brand is one of your that will serve to identify your business greatest assets because your O and how you want the brand to be brand is your customers' over-all perceived by consumers. experience of your business. CC 1. Determine company uniqueness Brand strategy is a long-term by comparing to competitors design for the development of a popular brand in order to -A Compare and contrast differences between your achieve the goals and objectives. company and competitors to A well-defined brand strategy identify opportunities. Focus on shakes all parts of a business 12 your strengths and how it can and is directly linked to exploit these opportunities. customer needs, wants, 2. Identify current market position emotions, and competitive Identify your existing market surroundings. position and how the new Experts believe that a good positioning will be beneficial in brand can result in better loyalty setting you apart from for its customers, a better competitors. corporate image and a more 3. Competitor positioning analysis relevant identity. Identify the conditions of the  As more customers continue to to generate money and do well in the differentiate between emotional world. and experienced companies, a 2) Consistency brand may be the first step forward in your competition The significance of consistency is instead of price points and to avoid things that don’t relate to or product features. improve your brand. Consistency aids to The question is, can you build a brand recognition, which fuels customer brand which truly talks to your loyalty. audience? Branding is a powerful and 3)Emotion TY sustainable high-level marketing There should be an emotional strategy used to create or voice, whispering "Buy me". This means influence a brand. Branding as a LI you allow the customers to have the strategy to distinguish products chance to feel that they are part of your and companies and to build brand. You should find ways to connect BI economic value to both more deeply and emotionally with your customers and to brand owners, customers. Make them feel part of the is described by Pickton and TA family and use emotion to build Broderick in 2001. relationships and promote brand loyalty. Commonly Used Branding Strategies 4) Flexibility N 1) Purpose Marketers should remain flexible U "Every brand makes a promise. too in this rapidly changing world. But in a market in which customer Consistency targets at setting the O confidence is little and budgetary standard for your brand, flexibility allows you to adjust and differentiate CC observance is great, it’s not just making a promise that separates one brand from your approach from your competition. another, but having a significant According to Kevin Budelmann, "Effective identity programs require -A purpose," (Allen Adamson). sufficient consistency to be identifiable, How can you define your but sufficient variation to keep things business purpose? According to fresh and human," so if your old tactics 12 Business Strategy Insider, purpose can don't work anymore, don't be afraid to be viewed in two ways: change. It doesn’t mean it worked in the past it may still work now. a. Functional. This way focuses on the assessments of success in terms of fast 5) Employee Involvement and profitable reasons. For example, the purpose of the business is to make It is equally important for your money employees to be well versed in how they communicate with customers and b. Intentional. This way focuses on represent the brand of your product. fulfillment as it relates to the capability 6) Loyalty Loyalty 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 TY Do not be frightened of competition. Take it as a challenge to improve your branding strategy and LI craft a better value in your brand. BI “Team work makes the dream work” -BTS TA Prepared by: N → Diana Dela Peña U → Danes Portuguez O → Giulliana Ladisla CC -A 12