ENTREPREN WEEK 3 Module 3

EURSHIP

Name:
____________________________
Section:
____________________________
 Welcome Notes:

WELCOME YOUNG ENTREPRENEURS!!!

Get ready to be challenged. Learn something new
every day by adapting the New Normal.

HOW TO USE THE MODULE?

As you start studying the module, I want you to set aside other task/s that may disturb you while enjoying
the lessons. Read the instructions below to successfully enjoy the objectives of this kit. Have fun!

Follow carefully all the contents and instructions indicated in every page
of the module.
Don’t forget to answer What I Know before moving on to the other
activities included in the module.
Read the instruction carefully before doing each task.
Observe honesty and integrity in doing the tasks and checking your
answers.
Analyze conceptually the post-test and apply what you have learned.
Finish the task at hand before proceeding to the next.
Enjoy studying!
Return this module to your teacher once you are through with it.
If you encounter any difficulty in answering the tasks in this module, do not hesitate to
consult your teacher. Always bear in mind that you are not alone.
 The Potential Market and the Market Need
LESSON
4

At the end of this module, you should be able to:

1. Recognize a potential market and analyze the market need.

You may start your journey in learning about the potential market and the
market need. Are you excited to answer the Pre-test? Smile and Enjoy!

PRE-TEST
DIRECTIONS: To check your prior knowledge about the topic, please analyze the pictures below
and list down at least five (5) potential markets that entrepreneurs should consider
during this COVID -19 pandemic and indicate their needs.

Potential Market Market Need

1. 1.
2. 2.
3. 3.
 4. 4.
5. 5.

As we go further, let us try to recall the competencies in Entrepreneurship.

● Competencies such as risk seeking, assertiveness and vision are considered typical of a successful
entrepreneur (www.ideasforleaders.com).
● Specific techniques and habits must be practiced and developed by all would-be entrepreneurs.
Aside from business competencies, entrepreneurs need interpersonal and self-leadership skills too;
however, these are often overlooked. Entrepreneurial behavior’ can be learned and developed
(www.ideasforleaders.com).
● If you’re an aspiring entrepreneur, there are different career paths you can take to turn your dream
into a reality. Which path you choose will depend on your experience, skills, finances, and flexibility,
as well as your goals for the future (Doyle, A., 2020).

Please answer the question below, Good Luck!

Multiple Choice: Write the letter of the correct answer that best complete the sentence in the space
provided.
_______1. All are core competencies in Entrepreneurship, except:
A. basic bookkeeping/ accounting skills B. communication skills
C. building relations with customer D. building competitive advantage
_______2. Which of the following is not a business competency? This competency covers the outcomes
required to build, _____ and grow a micro/small-scale enterprise – like developing and
maintaining small-scale business, establish customer base, and manage business finances.
A. Establish customer service B. Manage finances
C. Preparing business letters D. Monitoring operations
_______3. Which is not a goal of entrepreneurial competency?
A. Expanding the enterprise B. Expanding markets and clientele
C. Developing individuals and teams D. Enhancing one’s business skill
_______4. All are important aspects of Entrepreneurship as a course, except:
A. Discussion on economic issues and concerns.
B. Explanation of key concepts of competencies in Entrepreneurship.
C. Discussion on the relevance of the course.
D. Exploration of career opportunities.

_______5. Which of the following does not cover a high-performing enterprise?

A. Build and develop the enterprise to be more competitive within a changing business
environment.
B. Creating gaps among employees.
C. Responding to consumers’ demand.
D. Maintaining product quality and accessibility.
The Potential Market
1. 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).
2. A 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).
3. 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.

How to Identify Your Potential Markets (Lake, L., 2019)

● Consider every target demographic that you currently sell to, as well as those you have not yet
targeted. Identify what they have in common with each other, new milestones that they will
encounter in their lives that will impact their buying patterns, and where they overlap or diverge from
your current customers.
Ask yourself these questions that will help you identify both new ways to market your current products or
services, as well as new products and services that you can begin selling.
● What other products do my customers need now?
● What related products will they need in the future?
● Who else could make use of the products I am selling now?
● What demographic information does that new group have in common with my current customers?
● What demographic information does that new group have in common with each other?
For example, a business that makes face masks and PPEs could identify potential markets such as:
● Hospitals and other health related industries whose employees are prone to COVID -19 virus
and other viruses.
● Business industries and other organizations who want to ensure the health condition of their
employees.
● Employees and workers who need to report to work to earn income.
● Households who needs to go out for their necessities.
Note: Depending on the size and age of your company, as well as your industry, you may have a clear
picture of the potential markets that are available.
Reaching Your Potential Market (Lake, L., 2019)
Once you've identified and chosen a potential market to begin targeting, you will need new
marketing strategies in place to communicate with them. Use this profile to identify:
● The demographic information that people in a group have in common.
● The best forms of media to reach them.
● How they prefer to shop and make purchases.
 ● The concerns, struggles, or problems that you can help them overcome.
● What values matter to them, both in everyday life and when shopping.
● The language that resonates with them.

The figure below depicts what is a potential market with respect to the total population and how it
can be converted to a penetrated market:

Available Market
● Prospects who are willing and capable (have sufficient resources) buyers, and have access to a
particular market or service (www.businessdictionary.com).
● 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
● A 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. (www.businessdictionary.com).
The size of a potential market helps a company understand the level of investment it should make
further in the market, while taking into consideration other factors. If the potential market is very small, it
means there is a very small fraction of the total population showing any interest in the product or category.
This means that it is better that the company doesn’t invest further in the product or category because
people won’t buy it. If the size of the potential market is large, it means that there is a huge fraction of the
total population which is showing interest in the product, so further investment can be made on the product
development or modification, marketing, promotions etc. The size of the potential market gives an
estimate of what all a company should do and how much it should invest (MBA Skool Team, 2018).

The Market Need

1. Need
● A 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
(www.businessdictionary.com).
 ● A driver of human action which marketers try to identify, emphasize, and satisfy, and around which
promotional efforts are organized (www.businessdictionary.com).
2. Market
● A Market is a place where two parties can gather to facilitate the exchange of goods and services.
The parties involved are usually buyers and sellers. The market may be physical like a retail outlet,
where people meet face-to-face, or virtual like an online market, where there is no direct physical
contact between buyers and sellers (Kenton, W. & Boyle, M., 2020).
● A market does not refer to a particular place but it refers to a market for a commodity or
commodities. It 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).

Your market consists of (Stull, C., Myers, P.& Scott D.M. (2008) as cited in: https://learn.marsdd.com/):
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.

Define the Market Need for Your New Business

Why is it important to clearly define market needs?
The market now demands that your business align to their needs. In order to properly align your
marketing efforts ‒ and your content, in particular ‒ to what buyers need, you have to have a clear
understanding of the many intricacies, pains and pressures within your market. To achieve such alignment,
the ability to define market patterns, needs, interests, preferences, etc. for a comprehensive view of the
buying process is critical (www.aberdeen.com).

Below are ways to define your market (Lancaster SCORE (2010):

● Consider whether the business offers a new solution to an old problem or complements an
emerging trend.
● Have a clear picture of your target market.
● Determine the benefits that your product or service offers.
● Examine industry data that can confirm whether there is a sustained, growing demand for your
product or service.
● Identify the percentage of market share that it is realistic for you to capture.

The more competition you have, the lower the margins will be.
● Consider how realistic your pricing is. How can you present your product or service to potential
customers so that it appears to be a good value, while still affording you a healthy profit?
 Activities 1: Read and analyze the statements below about “Market”. Determine whether the statement
is TRUE OR FALSE. Write TRUE if the statement is correct and write FALSE if otherwise.
___________1. A market is any place where two or more parties can meet to engage in an economic
transaction—and should only involve legal tender.

___________2. Market includes retail stores and other similar businesses that sell individual items to
wholesale markets selling goods to other distributors but may not be virtual.

___________3. Market refers to the whole area of operation of demand and supply.

___________4. A market signifies any arrangement in which the sale and purchase of goods take
place.

___________5. The market establishes the prices for goods and other services.

Activity 2: Read and analyze the given situations below. Identify whether this refers to existing customer,
prospects, or target market users.

1. Students need to buy a tablet/ laptop for school

requirements.

2. Ana used to buy shampoo.

3. Households living in a remote area.

4. Martha, a call center agent, needs a Wi-Fi.

5. Karlo, a factory worker, needs transportation.

6. Arlene, a student of a public school, needs

mobile data in order to comply with the
requirements in school.

7. Hospitals need facemasks and PPEs.

 8. Mike, a sari-sari store owner, wants to go online
selling.

9. Jeep drivers need to modify their jeeps for public

transportation.

10. Ella needs to buy her vitamin C to boost her

immune system.

Activity 3:
MAKE MEANING- INTERNET ASSSISTED ACTIVITY
DIRECTIONS: Give the meaning of the following word/phrase in each item. You may use the internet to
define the given word/phrase.
1. Customer vs. consumer ____________________________________________________________
_______________________________________________________________________________
2. Demographic group_______________________________________________________________
_______________________________________________________________________________
3. Market share ____________________________________________________________________
_______________________________________________________________________________
4. Market size _____________________________________________________________________
_______________________________________________________________________________
5. Marketing strategies______________________________________________________________

_______________________________________________________________________________

REMEMBER

● 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).
● Available Market are prospects who are willing and capable (have sufficient resources) buyers,
and have access to a particular market or service (www.businessdictionary.com).
● 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 (Kenton, W., 2019).
● Penetrated Market is a set of customers or clients who are already using a particular product or
service (www.businessdictionary.com).
● Need is a 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
(www.businessdictionary.com).
 ● A Market is a place where two parties can gather to facilitate the exchange of goods and services
(Kenton, W. & Boyle, M., 2020).
● Existing customers are people who have already purchased your product.
● Prospects are people who have not yet purchased your product but are considering it.
● Target market users are people in your target market who are not currently looking for a solution.

Considering the ways to define your market, evaluate the situations below using 1 to 5 rating scale, 5 as
the highest and 1 as the lowest. Justify your answer in 1 to 2 sentences only.

Situations Rating Justification

To produce face masks and
PPEs.

To open on-line business for

fashion accessories.

To open a massage center.

To open a computer shop.

To open a carinderia

Identification: Read and analyze the statements below and identify whether this refers to potential market,
available market, target market, or penetrated market.
______________1. Active consumers of a product.

______________2. People who are both willing and capable of buying a particular product or service
in a particular market.
 ______________3. It is the part of the total population that has shown some level of interest in
buying a particular product or service.

______________4. It includes specific customers to whom a company directs its marketing efforts.

______________5. Customers or clients who are already using a particular product or service.

MATCHING TYPE: Match the definitions in Column A with the word/phrase in Column B.

Column A Column B
1. It is a company’s marketing goals and objectives combined into a single A. Market
comprehensive plan.

2. Refers to a person or organization that uses a commodity or service. B. Target Market

3. This is an area or arena in which commercial dealings are conducted. C. Potential Market

4. This is used to give a general idea of the size of a company in relation to D. Need
its market and its competitors.

5. This is one part of the total market for a good or service. E. Demographic group

6. It is also called Total addressable market (TAM). F. Market Strategy

7. A person or business that purchases a commodity or service. G. Market size

8. Circumstances in which something is necessary, or that require some H. Customers

course of action; necessity.

9. The study of the characteristics of human populations, such as size, I. Consumers

growth, density, distribution, and vital statistics.

10. The number of buyers and sellers in a particular market. J. Market share

REFLECTIVE LEARNING
If you’re thinking about starting a business, most likely you have dreamed of one that involves
your interests. But, what does the market need or want? Do you know who is buying what and how much,
or how, where and why they are buying those goods or services already?
Determining the marketability of your start-up business is typically done in the context of
creating a business plan and performing an analysis of your competition. It requires research into areas of
marketability.
As would-be Entrepreneur, you are tasked to identify your dreamed business, one that involves your
interests. Indicate who are your potential market, target market, available market and/or penetrated market.
Write your answer in the space provided.
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
Websites
Available Market. Retrieved from: http://www.businessdictionary.com/ definition/available-market.html

Definition of need. Retrieved from: http://www.businessdictionary.com/ definition/need.html

How to Define Market Needs to Align Content Effectively. Retrieved from:

https://www.aberdeen.com/cmo-essentials/define-market-needs-align-content-effectively/

Kenton, W. (2019). Target Market. Retrieved from:https://www.investopedia.com/terms/t/target-market.asp

Lake, L., (2019). The definition and importance of potential markets. Retrieved from:
https://www.thebalancesmb.com/identifying-opportunity-in-new-

Lancaster SCORE (2010). Define the Market Need for Your New Business. Retrieved from:
https://scorelancaster.wordpress.com/2010/01/18/define-the-, market-need-for-your-new-business/