Business Enterprise Simulation Quarter 3 – Module 3

–
Lesson 1: Determining the Demand and Market
Acceptability
This module was designed and written with you in mind. It is here to help ymaster
the introduction to Business Enterprise Simulation. This module is crafted to allow you
to use it in many different learning situations with the language used recognizing the
diverse vocabulary level of students. The discussion of the topics is arranged to help you
follow and understand the flow of the lessons.
After going through this module, you are expected to:
 Choose appropriate methodology (research, sampling and data processing) in
determining the demand and market acceptability of proposed product;
 Classify data based on the data source it is generated from;
 Identify and list down of ways of generating primary and secondary data for your
business venture.

Lesson 1: Market Research, Sampling, and Data Processing

Accurate and thorough information is the groundwork of all successful business
ventures because it provides a wealth of information about prospective and existing
customers, the competition, and the industry in general. It allows business owners to
determine the feasibility of a business before committing substantial resources to the
venture. Hence, it is important to be able to identify and choose the appropriate
methodology, such as research, sampling, and data processing, to be able to determine
the demand and market acceptability of a proposed product for your business enterprise.

Activity 1: Identify the Mystery Words

As you go through this module, you will meet new business terms and concepts
that will be useful for you. Arrange the jumbled words below to find the mystery words
being described. There are clues provided below to help you identify the mystery words.

It provides relevant data to help solve marketing 1. M A _ K _ T R_S_A_CH

challenges that a business will most likely face.
P _ I M _ R _S _ U R _ _ S

It includes observation networking, interviewing S_M_L_NG

and experimentation.
I_P_T
It is a process used in statistical analysis in which a
D _ T _A _ A L _ S _ S
predetermined number of observations are taken
from a larger population.

It is the first part of the data processing cycle

involves collecting data as well as entering it and
then preparing it for the next part of the cycle.

It is a process of inspecting, cleaning, transforming,

and modelling data with the goal of highlighting
useful information, suggesting conclusions, and
supporting decision making.
 After finding the missing terms above, what ideas do you have about the lesson
that we are about to tackle?

You have encountered research through your journey in senior high school. You
are familiar with the research process as well as the experience of conducting interviews
and surveys with your participants and analyzing the data that you have gathered.

To determine the demand and market acceptability of the product that you want
to venture in, you have to conduct a market research, which is similar to the research that
you are familiar with. Along with this research, you have to make sure that you will use
the correct methodology and gather accurate research data, sampling, and analysis. From
your analyzed data and information, you can formulate conclusions and propose
recommendations for your business venture. Then you can form a business model that
will be useful for your business.

Market Research
Having accurate and thorough information is a vital factor for the success of a
business venture because it provides a wealth of useful information about prospective
and existing customers, the competition, and the industry in general. It allows business
owners to determine the feasibility of a business before committing substantial resources
to the venture.

Entrepreneur Asia Pacific (n.d.) states that market research provides relevant data
to help solve marketing challenges that a business will most likely face--an integral part
of the business planning process. In fact, strategies such as market segmentation
(identifying specific groups within a market) and product differentiation (creating an
identity for a product or service that separates it from those of the competitors) are
impossible to develop without market research (Entrepreneur, n.d.).

Research data may be drawn from both primary data and secondary data:
1. Gathering data from primary sources includes observation networking,
interviewing and experimentation. It means that the person who needs the data
does the gathering himself or herself while gathering data from secondary sources
means that somebody else has gathered the data and you are a secondary user of
said data. Primary data sources include the following:
o Surveys - In survey research, the researcher selects a sample of respondents
from a population and administers a standardized questionnaire to them.
o Experiments - This is an experiment where the researchers manipulate one
variable, and control/randomizes the rest of the variables.
o Observational research - Observational research (or field research) is a type
of correlational (i.e., non-experimental) research in which a researcher
observes ongoing behavior.
2. Secondary sources of data are those that have already been compiled and are
available like those from business directories, demographic data from government
or private agencies, existing market research, and those from the internet.
Secondary data include:
o public documents
o books
o journals and magazines
o internet
o internal data bases

Sampling
If you are to generate primary data through surveys, interviews, or observations,
you have to identify your research sample or the people with whom you are going to
conduct surveys, interviews, or observations with. You can rely on various sampling
techniques and methods to try and capture as wide range as possible the various types of
customers a client is hoping to glean feedback from.

British Library (n.d.) cited sampling as an effective way of obtaining opinions from
a wide range of people, selected from a specific group, in a bid to find out more about a
whole group in general. As a market research tool for entrepreneurs and start-ups
looking to better understand their target market or research the potential for new
business ideas, sampling can be a real benefit.

It would be extremely expensive and time-consuming to gather data from the

entire population of your target market, so by carefully sampling your demographic it’s
possible to build an accurate picture of your target market using common trends from the
results (British Library, n.d.).

Business Jargons (n.d.) provides some of the sampling techniques that you can
employ are:
1. Random Sampling Methods: The random sampling is also called as a probability
sampling since the sample selection is done randomly so the laws of probability can
be applied.
 Simple Random Sampling — the most commonly used sampling technique,
and truly random, this method randomly selects individuals from a list of the
population, with every individual having an equal chance at being selected.
 Stratified Sampling — this method is a conflation of Simple Random and
Systematic Sampling and is often used when there are a multitude of unique
subgroups that require full, randomized representation across the sampling
population.
 Systematic Sampling — rather than randomly selecting individuals from a
population, this method is based on a system of selecting participants. For
example, a market researcher may select from a list of the population every 20th
person. While this allows for a controlled way to select from a target population, it
may be skewed depending on how the original list is structured or organized.
 Multistage Sampling – it is the probability sampling technique wherein the
sampling is carried out in several stages such that the sample size gets reduced at
each stage.
2. Non-Random Sampling Methods. In the case of non-random sampling, the
selection is done on the basis other than the probability considerations, such as
judgment, convenience, etc. The non-random sampling is subject to sampling
variability, but however there is no certain pattern of variability in the process.
 Judgement Sampling – it is the non-random sampling technique wherein the
choice of sample items depends exclusively on the investigator’s knowledge and
professional judgment.
 Convenience Sampling – it is the non-probability sampling technique wherein a
proportion of the population is selected on the basis of its convenient availability.
 Quota Sampling – it is yet another non-probability sampling method wherein
the population is divided into a mutually exclusive, sub-groups from which the
sample items are selected on the basis of a given proportion.
 Snowball Sampling – it is a non-random sampling technique wherein the initial
informants are approached who through their social network nominate or refer
the participants that meet the eligibility criteria of the research under study. Thus,
this method is also called as the referral sampling method or chain sampling
method.

Data Processing
After generating your needed data from your sample, you can now process and
analyze it. Lumen (n.d.) described analysis of data as a process of inspecting, cleaning,
transforming, and modelling data with the goal of highlighting useful information,
suggesting conclusions, and supporting decision making. Data analysis has multiple
facets and approaches, encompassing diverse techniques under a variety of names in
different business, science, and social science domains (Lumen, n.d.).

Data Processing Cycle

The data processing cycle is a sequential one that starts with inputs and often ends
with interpretation of results – however, many organizations add two stages for feedback and
storage:
1. Input – The first part of the data processing cycle involves collecting data as well
as entering it and then preparing it for the next part of the cycle.
2. Processing – During the second part of the cycle, data is manipulated according to
instructions and parameters programmed into the processing application.
3. Output – The form of outputs includes common variations such as results that
are printed or displayed on a computer monitor.
4. Interpretation – Assessing and analyzing results: What does the data mean?
5. Feedback – Comparing output with desired results: How can data be processed better?
6. Storage – Archiving the data (either physically or electronically) for future use.

Steps in Business Data Processing

In a complete data processing operation, you should pay attention to what is
happening in five distinct business data processing steps:
1. Editing – What data do you really need? Extracting and editing relevant data is
the critical first step on your way to useful results.
2. Coding – This step is also known as bucketing or netting and aligns the data in a
systematic arrangement that can be understood by computer systems.
3. Data Entry – Entering the data into software is a step that can be performed
efficiently by data entry professionals.
4. Validation – After a “cleansing” phase, validating the data involves checking (and
preferably double-checking) for desired quality levels.
5. Tabulation – Arranging data in a form that facilitates further use and analysis.

Drawing Conclusions and Formulating Recommendations

Thus, you have to generate your conclusions and recommendations based on the
data you have generated, processed and analyzed. These conclusions and
recommendations are critical in determining success or failure of your business venture.
If an otherwise excellent research is summarized by a weak conclusion or
recommendations, the results will not be taken seriously.

Independent Activity 2: Classify your Data

Group the following data and classify them into primary data or secondary data by
writing them down on the box it belongs.
Internet Internal Database
Experiment Survey
Books Observation
Magazines Journals
Interview Public Documents
Activity 3: The Data Processing Cycle
The data processing cycle is a sequential one that starts with inputs and often ends with
interpretation of results. Based on what you have learned, enumerate and arrange the steps
in processing data.

Activity 4: Steps in Business Data Processing

Identify which among the steps in business data processing is being described by the
following statements:
1. It involves checking (and preferably double-checking) for
desired quality levels.
2. This step is also known as bucketing or netting and aligns the
data in a systematic arrangement that can be understood by
computer systems.
3. Arranging data in a form that facilitates further use and
analysis.
4. This is a step that can be performed efficiently by data entry
professionals.
5. It is the critical first step on your way to useful results.
 Activity 5: SWAK or WHACK?
The following are statements related to means to which one can determine the
demand and market acceptability of a business idea. Write SWAK if the statement is
correct and write WHACK if the statement is incorrect.
1. Having accurate and thorough information allows business owners to determine
the feasibility of a business before committing substantial resources
to the venture.
2. It would be extremely cheap and timely to gather data from the entire population
of your target market.
3. Market research provides irrelevant data to increase marketing challenges that a
business will most likely face.
4. You have to generate your conclusions and recommendations based on the data
you have generated, processed and analyzed.
5. In a complete data processing operation, you should pay attention to what is
happening in six distinct business data processing steps.

Performance task : For What It’s Worth

Write a one-paragraph essay that illustrates the importance of determining the demand and market
acceptability through market research. How can this process affect one’s business?

3. The following are considered

BUSINESS ENTERPRISE as needs EXCEPT:
SIMULATION A. education B. Food
LONG QUIZ NO. 1 C. new high-end cellphone
D. sanitation
Name:__________________________
_
4. Introducing an entirely new
Section:________________________ product to the market is called
__ .
A. alteration C. alteration
MULTIPLE CHOICE. Choose the B. improvement D.
letter of the best answer from improvement
the choices.

5. It is an undertaking by a
1. These are things that are person or a group of persons
essential for us to be able to who are partners, or of
live with dignity and pride stockholders who own a
within the community. juridical entity known as a
A. commodity C. luxury corporation. Its main objective
B. needs D. wants is to earn profit for the owners.
A. aggregate C. government
2. These are considered as B. business D. industry
luxuries and extravagance that
signify wealth and expensive
way of living.
6. It is defined as a good or
A. commodity C. luxery favorable change available to
B. needs D. wants run a specific business in a
given environment at a given
point of time.
 A. business enterprise C. legal factor D. social factor
B. business opportunity
C. business idea 11. The following are considered as
D. business plan economic factors in market scanning
EXCEPT:
A. Company debt C. GDP loss or
7. Good business opportunities growth
and ideas can be generated
from the following sources B. Consumer age D.
EXCEPT: Inflation rates
A. A new product introduced
by the competitor 12. Falling behind on technological
B. Ideas given by the trends, using outdated equipment or
knowledgeable persons software, and examining the
technological barriers your business
C. Unsuccessful stories of faces to enter a new market all fall
known entrepreneurs or friends within this category. This situation
or relatives considers which PESTLE factor?
D. Watching emerging trends A. economic factor C. political
in demands for certain factor
products
B. legal factor D. technological
factor
8. It is defined as the process
of continually and actively
monitoring the external 13. Which of the following should be
environment, in order to considered first by a prospective
identify customer needs, entrepreneur in choosing the right
anticipate competitive actions, location for his/her business?
and identify technological A. the access of the target
changes which will provide new customers
market opportunities or market B. the attractiveness of the store
disruptions. layout
A. business scanning C. the prevailing prices of the goods
B. environmental scanning in the area
C. industry scanning D. type of merchandise
D. market scanning
14. When an entrepreneur improves
9. The firms, which are also and alter products to make it more
known as the “buy and sell” appealing to target customers, he/she
businesses, purchase products is doing an of the product.
and sells the same at a higher A. alteration
price without changing the B. improvisation
form of the products are called
C. innovation
A. manufacturing C. service
D. invention
B. merchandising
D. social service
15.In selecting between two
potential business ideas,
10. An increase in demand of ‘green Martha should consider the
energy’ use can affect the energy following factors EXCEPT:
source you use to power your A. How big is the demand for
equipment and vehicles. This situation the product/service?
is affected by a PESTLE factor known as
. B. How much capital is
needed?
A. economic factor
C. Is the business in line with
B. environmental factor Martha’s interest and
 expertise?

Identification: Which PESTLE

Factor is it?
Determine and classify the
following according to which
among the PESTLE factors it is.
16. GDP growth rate 21.
Climate change
17. Education 22.
Investment
18. Tax policy
23.Safety/Health Law
19. Innovation 24.
Pollution
20Legal system 25.
Robotics

True or False
26. Basic wants are things that are
essential for us and our wellbeing.
27. You can invent a new and
improved product or service to replace
the existing ones.
28. Automation opportunities is
among the economic factors in PESTLE
analysis.
29. Improving or enhancing an
existing product or service is known as
innovation.
30. The knowledge for the needs and
wants can serve as a measure for the
success of your business idea.
31. SWOT analysis is objective.
32. SWOT analysis should distinguish
between where your business in the
past and where it is today.
33. Avoid complexity and over
analysis.
34. Gray areas are acceptable in SWOT
analysis.
35. It is essential to conduct
environmental scanning to identify the
needs and wants of people.