Republic of the Philippines

Department of Education
Region VIII
Division of Southern Leyte
STA. PAZ NATIONAL HIGH SCHOOL
Pasanon, San Francisco, Southern Leyte

ENTREPRENEURSHIP – QUARTER 1 WEEK 2 & 3

Lesson
Recognize a Potential Market
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After completing this module, you need to:
 Learn and understand the sources of opportunities for business.
 Determine the essentials in the entrepreneur’s opportunity seeking
 Identify market problems and propose potential products or services
that will meet the market needs.
 Know the problem in which a business opportunity arises from.
 Identify, screen and proposed solution to meet the problem
 Select the best product or service that will meet the market’s need with a
consideration of generating profit.

In the previous lesson, you already know about the difference between
businessman and entrepreneur. Knowing all the entrepreneurial concepts
will not assure a person of becoming a successful entrepreneur and not all
business people are entrepreneurs. Some says being an entrepreneur is a
calling; a lot of qualities must be possessed to be considered successful and
sustainable. So, if you are given a great opportunity to venture into the field
of entrepreneurship, it may be a long process to undertake and the
willingness to take a risk. Also, you’re not only the one who’s in progress but
at the same time, you’re helping for the development growth of our economy.

Entrepreneurial Ideas
The creation of an entrepreneurial ideas leads to the identification of
entrepreneurial opportunities, which in turn results in the opening of an
entrepreneurial venture.
The entrepreneurial process of creating a new venture is presented in
the diagram below. (Aduana, 2017)

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 Creation of Identification of Opening of
entrepreneurial entrepreneurial entrepreneurial
Ideas Opportunities Venture

Figure 1. The Entrepreneurial Process of Creating New Venture Essentials in

Entrepreneur’s Opportunity Seeking

These are the basic foundation that the entrepreneur must have in
seeking opportunities:
Entrepreneurial mind frame. This allows the entrepreneur to see
things in a very positive and optimistic way in the midst of difficult situation.
Being a risk - taker, an entrepreneur can find solution when problems arise.
Entrepreneurial heart flame. Entrepreneur's driven passion, they are
attracted to discover satisfaction in the act and process of discovery.
Passion is the great desire of an entrepreneur to achieve his/her goals.
Entrepreneurial gut game. This refers to the ability of the entrepreneur
of being intuitive. This also known as intuition. The gut game also means
confidence in one’s self and the firm believe that everything you aspire can
be reached.

Sources of Opportunities
There are many ways to discover opportunities. Looking at the big
picture some have noticed the emerging trends and patterns for business
opportunities. While others are trying to find out their target market. Some
are the following sources of opportunities:
1. Changes in the environment
Entrepreneurial ideas arise when changes happen in the external
environment. A person with an entrepreneurial drive views these changes
positively. External environment refers to the physical environment,
societal environment, and industry environment where the business
operates.
1.1 The physical environment includes
a. Climate- the weather conditions.
b. Natural resources- such as minerals, forests, water, and
fertile land that occur in nature and can be used for
economic gain.
c. Wildlife- includes all mammals, birds, reptiles, fish, etc., that
live in the wild.
1.2 The Societal environment includes the various forces like
a. Political forces- includes all the laws, rules, and regulations
that govern business practices as well as the permits,
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 approvals, and licenses necessary to operate the business.
b. Economic forces- such as income level and employment rate.
c. Sociocultural forces- customs, lifestyles and values that
characterize a society.
d. Technological environment- New inventions and technology
innovations.
1.3 The industry environment of the business includes:
a. Competitors
b. Customers
c. Creditors
d. Employees
e. Government
f. Suppliers
For example, one factor in the physical environment that can easily
change is the climate. The temperature is very high during summer but
very low during the rainy season. An individual with entrepreneurial drive
can be extremely imaginative and inventive in identifying opportunities.
He/she can venture a business that responds to the needs of the people
during summer and rainy season.

2. Technological discovery and advancement

A person with entrepreneurial interest sees possibility of business

opportunities in any new discovery or because of the use of latest
technology.
For example, an individual with knowledge in repair and installation of
a machine engine discovers that additional engine parts that considerably
reduce fuel consumption.
3. Government’s thrust, programs, and policies

The priorities, projects, programs, and policies of the government are

also good sources of ideas.
For example, the use of firecrackers to celebrate New Year’s Eve is
strictly prohibited. People without entrepreneurial interest will view the
ordinance as a plain restriction. However, for an entrepreneur, it is a
business opportunity to come up with a new product that will serve as a
substitute for firecrackers.
4. People’s interest
The interest, hobbies, and preferences of people are rich source of
entrepreneurial ideas. Like the increasing number of Internet Café at present
could be led to the strong attachment of young people to computers.

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 5. Past experiences
The expertise and skills developed by a person who has worked in a
particular field may lead to the opening of related business enterprise.
For example, an accountant who has learned the appropriate
accounting and management skills and techniques in a prominent
accounting firm can start his/her business venture by opening his/her own
accounting firm.

Forces of Competition Model

It is also known as the “five forces of competition,” An industry
environment is a competitive environment. Regardless of what product or
services you have, competition is always present.

Competition – it is the act or process of trying to get or win something.

For example, the prices are lower when there is a competition among the
stores. These are the five forces competing within the industry:
1. Buyers - The buyers are the one that pays cash in exchange to your
goods and services. For example, the influenced of the price or in the
bargaining strategy. The buyer has a strong and magnified bargaining
power. The threat of its bargaining power will be less if the following factors
notice:
 There are several suppliers available in the market.
 The buyer has the potential for backward integration.
 The cost of switching the supplier cost is minimal.
 The product represents a high percentage of the buyer’s cost.
 The buyer purchases large portions of the seller’s product or services.
2. Potential new entrants - A new entrant is defined as the one who
enters something. For example, the level of capital requirements, if the
business requires huge capital, new entrants should decline to join the
business. This gives a threat to the business. This can be notice if there is
the presence of the following factors:
 Substantial capital requirement.
 Strict government policy.
 Difficulty in accessing distribution channels.
 Economies of scale.
 High cost of product differentiation.
 High switching cost
3. Rivalry among existing firms - Rivalry is a state or situation in which
people or groups are competing with each other. For example, it depends on the
Marketing strategy of your competitor, like giving freebies and special offers. The
intensity of rivalry among existing firms is characterized to the following factors:
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 a. Diversity of rivals.
b. Number of competing firms.
c. Characteristics of the products or services.
d. Increased capacity.
e. Amount of fixed costs.
f. Rate of industry growth.

4. Substitute products - Substitute means anything that takes the

place or function of another. For example, the consumers decide to use
margarine as a substitute for butter. In case the price of butter increases,
preferably the consumer will gradually switch to margarine.

A substitute product can give a big threat in the industry environment if the
following factors are notice:
a. Switching cost is low.
b. Preferences and tastes of the customers easily change.
c. Product differentiation is highly noticeable
d. The quality of substitute products dramatically improves.
e. The price of substitute product is substantially lower.

5. Supplier - The Suppliers are the one that provide something that is needed
or wanted. For example, if the supply and services being offered is unstable or
keep. The intensity of the threat is strong in this kind of the competitive force in
the industry. This can be notice if there is the presence of the following factors:
 The supplier has the ability for forward integration.
 Suppliers in the industry are few, but the sales volume is high.
 Substitute products are not readily available in the market
 The switching cost is very high.
 The product or service is unique.

Definition of Terms
Opportunity seeking - Process of considering, evaluating, and pursuing market-
based activities that are accepted to be beneficial for the business.
Entrepreneurial process - can be defined as the steps taken in order to begin a
new enterprise. It is a step-by-step method; one has to follow to set up a
business.

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Entrepreneurial ideas - an innovative concept that can be used for financial gain
that is usually centered on a product or service that can be offered for money.
Essentials of entrepreneur’s opportunity seeking - These are the basic
foundation that the entrepreneur must have in seeking opportunities, such as
entrepreneurial mind frame, heart flame and gut game.
Sources of opportunity - can be attain by assessing and looking at changes in
the environment; technological discovery and advancement; government’s thrust,
programs, and policies; people’s interest, and past experiences.
External environment - refers to the physical environment, societal environment,
and industry where the business operates.
Government - refers to the local government (municipality, city, or provincial) or
the national government and its branches.
Competition – it is the act or process of trying to get or win something.
Substitute – anything that takes the place or function of another.
New entrants – the one who enters something.
Suppliers – are the one that provide something that is needed or wanted.
Buyers – are the one that pays cash in exchange to your goods and services.

Rivalry – is a state or situation in which people or groups are competing with

each other.

Assessment
Direction: Encircle the letter of your choice.
1. It is the process of considering, evaluating, and pursuing market-based
activities that are believed to be advantageous for the firm.
A. Opportunity seeking C. Opportunity screening
B. Opportunity seizing D. Sources of opportunity

2. This is essential to opportunity seeking which allows the

entrepreneur to see things in a positive and optimistic light in the
midst of crisis or difficult situations.
A. Entrepreneurial mind frame C. Entrepreneurial heart flame
B. Entrepreneurial gut game D. Entrepreneurial heart frame

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3. It is the ability of entrepreneur that can sense without using the five
senses, also known as intuition.

A. Entrepreneurial mind frame C. Entrepreneurial heart flame

B. Entrepreneurial gut game D. Entrepreneurial heart frame
4. One of the essentials of entrepreneur’s opportunity seeking that refers
to the driven passion of an individual.

A. Entrepreneurial mind frame C. Entrepreneurial heart flame

B. Entrepreneurial gut game D. Entrepreneurial heart frame
5. What variable of societal environment includes income level and
employment rate?

A. Economic forces C. Political forces

B. Sociocultural forces D. Technological forces

For questions 6 and 7 refer to the following statements:

A. Preferences and tastes of the customers easily change.

B. The buyer has the potential for backward integration.
C. The cost of switching the supplier cost is minimal.
D. Product differentiation is highly noticeable.
6. Which are the factors of the substitute product that pose a great
threat in the industry environment?
A. A, B, C, D C. A and D
B. A and C D. B and C
7. Which are the factors that influenced the buyer to have a less threats
because of the bargaining power?
A. A only C. A and D
B. A and C D. B and C
8. They are the one that pays cash in exchange to your goods and services.
A. Buyers C. sellers
B. Competitors D. suppliers
9. The intensity of rivalry among existing firms is characterized to the
following factors except one:

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 A. Diversity of rivals.
B. Number of competing firms.
C. Characteristics of the products or services.
D. The product represents a high percentage of the buyer’s cost.
10. The following are the forces competing within the industry except one:
A. Potential new entrants and Substitute Products
B. Buyers and Suppliers
C. Rivalry among existing firms
D. Needs and Wants
11. Which of the following good sources of entrepreneurial ideas
determine the interest, hobbies and preferences of people?
A. Changes in the environment C. People’s interest
B. Technological discovery D. Past experiences
12. Societal environment includes the following, except:
A. Economic forces C. Political forces
B. Sociocultural forces D. Natural resources
13. Which among the following is the result of identifying entrepreneurial
opportunities?
A. Creation of entrepreneurial ideas C. Sources of opportunity
B. Opening of entrepreneurial venture D. Entrepreneurial process
14. What entrepreneurial idea will you recognized, if you consider the
new discovery and advancement of technology as source of
opportunity?
A. Changes in the environment
B. Technological discovery and advancement
C. Government’s thrust, programs, and policies
D. People’s interest

15. Source of entrepreneurial idea where expertise and skills

developed by a person from its previous work can lead to the opening
of a related business enterprise.
A. Government’s thrust, programs, and policies
B. Past experiences
C. People’s interests
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 D. Technological discovery and advancement

Lesson
Recognize and Understand the Market
2

This lesson is divided into two topics:

1. Describe the unique selling proposition and value proposition that
differentiate one’s product/service from existing products/services.
2. Determine who the customers are in term of
a. Target market
b. Customer requirement
c. Market size

Activity1. Identify whether Unique Selling Proposition or Value Proposition on

one’s product/service.
Example: Langhap Sarap Example: Unique Selling Proposition
1. Safeguard ______________________________
2. Love ko to ______________________________
3. Supermarket ______________________________
4. Surf ______________________________
5. Bukas kahit anong oras ______________________________

Value Proposition (VP) is a business or marketing statement that

summarizes why a consumer should buy a company's product or use its
service. This statement is often used to convince a customer to purchase a
particular product or service to add a form of value to their lives. In creating
Value Proposition, entrepreneurs will consider the basic elements:
 Target Customer
 Needs/opportunity

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  Name of the product
 Name of the enterprise/company
There are many competitors in the market to establish superiority to
them. Entrepreneurs should think some alternative and how it works better. An
important aspect in Value Proposition must be truthful that will establish
credibility to the consumers.
Example: Potential value proposition is most common in small
businesses of your locality.
Aling Charing Sari-sari Store open only from 6:00 am to 6:00 pm, but
Aling Charing noticed that there are customers who go nearby town to look for
a convenience store at around 10:00 pm to 6:00 am. She believes that this is
a great opportunity for her store to operate 24/7. In this example, proposed
value proposition: “Charing Sari-sari Store, opens 24/7”.
The business describes sari-sari store – a basic retail store. The
assurance from this value proposition is because of the phrase “opens 24/7”,
Aling Charing Sari-sari Store opens 24/7, which make it different from other
competitors.

Unique selling proposition (USP) refers to how you sell your product
or services to your customer. You will address the wants and desires of your
customers.
As entrepreneur, you think of marketing concept that persuade your
target customers. The following questions you may ask in doing this, What the
customers want? What brand does well? What your competitor does well?

Some tips for the entrepreneur on how to create an effective unique selling
proposition to the target customers:
 Identify and rank the uniqueness of the product or services character
 Very Specific
 Keep it short and simple (KISS)
As entrepreneur, present the best feature of your product or services
that are different from other competitors. Identifying the unique selling
proposition requires marketing research that you will learn from the other
modules. In promoting your products or services, make sure that it is very
specific and put details that emphasize the differentiator against the
competitors. Keep it short and simple and think of a tagline that is easy to
remember. Right now, the proposed unique selling proposition: “Charing Sari-
sari Store, opens 24/7”.
Readers get confused between value proposition and unique selling
proposition. The two propositions are used to differentiate the products from
competitors. For example, Jollibee is known to have a Filipino taste burger.
This brand has a unique selling point because of its tagline “Langhap Sarap”
Unique Value Proposition and Value Proposition are two most famous
tools used to explain why prospect customers buy each product and services.
Base on each definition, we learn that USP and VP are frameworks of each
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 business industry. The two propositions are valuable for the entrepreneurs.
After you understand the value proposition and the unique selling proposition, now it’s
time to understand the target market, customers requirement and market size.

A. Target Market
Market Targeting is a sage in market identification process that aims to
determine the buyers with common needs and characteristics. Prospect
customers are market segment that entrepreneurial venture intends to serve.
In targeting a specific market, it will exclude people even if it will not fit
your criteria. Rather, target marketing allows you to focus your marketing
money and brand message on a specific market that is more likely to buy from
you than other markets. Product is more affordable, efficient, and effective
way to reach potential clients and generate business.

Commonly used methods for segmenting the market are follows.

1. Geographic segmentation – the total market is divided according to
geographical location.
 Variable to consider
a. Climate c. Culture
b. Dominant ethnic group d. Density (either rural or urban)
2. Demographic Segmentation – divided based consumers.
 Variable to consider
a. Gender e. Education
b. Age f. Religion
c. Income g. Ethnic group
d. Occupation h. Family size
3. Psychological Segmentation- divided in terms for customers think
and believe.
 Variable to consider
a. Needs and wants b. attitudes
c. social class d. personality traits
e. Knowledge and awareness f. Brand concept
g. Lifestyle
4. Behavioral Segmentation- divided according to customers behavior
pattern as they interact with a company.
 Variable to consider
a. Perceptions d. Benefits
b. Knowledge e. Loyalty
c. Reaction f. Responses

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 B. Customer Requirements

Customer requirements are the specific characteristics that the

customers need from a product or a service.
There can be two types of customer requirements:
1. Service Requirement
2. Output Requirement
Service Requirement:
Intangible thing or product that is not able to be touched but customer
can feel the fulfillment. There are elements in service requirement like on-time
delivery, service with a smile, easy-payment etc. It includes all aspects of how
a customer expect to be treated while purchasing a product and how easy the
buying process goes.
Output Requirements:
Tangible thing or things that can be seen. Characteristic specifications
that a consumer expects to be fulfilled in the product. Costumer that will avail
services as a product, then various service requirements can take the form of
output requirements. For example, if the consumer hires a multi cab, then on-
time arrival becomes an output requirement. Customer buys gadgets (phone
speaker), the specification like the loudness and clarity are the output
requirements.

C. Market Size
Entrepreneur’s most critical task is to calculate the market size, and the
potential value that market has for their startup business. Market research will
determine entrepreneur possible customers in one locality.

What is Market Size?

Market size is like a size of arena where the entrepreneurs will play
their business. It is the approximate number of sellers and buyers in a
particular market. Companies are interested in knowing the market size before
launching a new product or service in the area. In determining the market
size, entrepreneur will conduct a strategic marketing research from reliable
sources using the following method. First step is to estimate the potential
market – approximate number of customers that will buy the product or avail
your services. Second step is to estimate the customers who probably dislike
to buy your product or avail the services. Third step is for the entrepreneur to
estimate the market share, that means plotting and calculating of the
competitor’s market share to determine the portion of the new venture. Market
size become the most important if you ever need to raise funding for your
business.

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What I Can Do
As an entrepreneur, you are planning to have a business. Use these following
questions as your guide.
1. What product you want to sell?
2. Apply the concept of value proposition and unique selling proposition.
Make a tagline for your chosen product?
3. Who is your target market?

Assessment
Multiple Choice: Select the best answer.
1. What is the relationship between unique selling proposition and
value proposition.
a. a framework of each business industry
b. meet your competitors needs wants.
c. persuades another to exchange money for a product service’s
d. connected with only one particular thing.
2. The following variable to consider in behavioral segmentation, except.
a. perception c. reaction
b. brand concept d. benefit

3. What is the function of Value Proposition?

a. use to power up sales
b. convince customer to purchase a particular product or services.
c. customers buying habits
d. provide value to your customers
4. Give example in promotion using Value Proposition and Unique
Selling proposition.
a. with the slogan “Langhap Sarap”
b. ordinary sari-sari store
c. multinational business
d. fruit shake stand
5. _ will determine entrepreneur possible customers in
one locality.
a. Market design c. market research
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 b. Market strategy d. market size
6. The term behavioral segmentation refers to:
a. divided based on consumers
b. divided in terms for customers think and believe.
c. divided according to geographical location.
d. divided according to customers behavior pattern as they interact
with a company.
7. What is market size?
a. tangible things that can be seen.
b. Size of arena where the entrepreneur will play their business
c. The most important part to the success of the company
d. another variation of segmentation marketing.
8. Considered favorable indicators for doing business in that particular
location.
a. structure of the segment
b. capability of the business
c. size and growth of the segment
d. segmentation marketing
9. Select type of customer requirement
a. service requirement c. service responsibility
b. service oriented d. service fulfillment

10. This refers to how you sell your products or services to your customer.
a. Value proposition c. Selling proposition
b. Unique selling proposition d. Marketing concept

11. Tips for the entrepreneur on how to create an effective unique

selling proposition to the target customers, except.
a. Identify and rank the uniqueness of the product or services
characteristic.
b. Very specific
c. Keep it short and simple
d. Completeness of proportion
12. Geographic segmentation refers to:
a. Divided according to geographical location
b. Divided based consumers.

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 c. Divided in terms for customers think and believe
d. All of the above
13. Service requirement _ thing or product not able to touch but
customer can feel the fulfillment.
a. Tangible c. Service
b. Intangible d. Output
14. Tangible things that can be seen refers to what?
a. Service requirement c. customer requirements
b. Output requirement d. Entrepreneur’s output
15. What is the first step in conducting a strategic marketing.
a. Estimate the potential market
b. Estimate the customers who probably dislike buying your product
c. Estimate the market share
d. Estimate business funding.

ADDITONAL ACTIVITY:
Give at least 5 products being advertised or promoted on television. Evaluate
each one according to its USP, VP, method of segmentation used, customer requirements,
and who are target customers.
Product Method of Customer Target
Name USP VP Segmentation Requirements customers
Ex. Langhap Filipino Service &
Jollibee Sarap taste Psychological Output All people
burger
1.

2.

3.

4.

5.

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Prepared by:

JULIUS M. EMUESTO
Subject Teacher
#09668925794
FB: Jaw Use

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