ENTREP

CHAPTER 4: BUILDING BUSINESS MODELS

“A business model is supposed to answer who your customer is, what value you can create/add
for the customer and how you can do that at reasonable cost”
-Peter Drucker
Business Model- defines the foundation of its company’s core value, proposition, targeting
customers, key resources, and assumed revenue streams.

DIFFERENT TYPES OF BUSINESS MODELS:

1. Manufacturer- is a person or registered company which makes finished products from raw
materials in an effort to make a profit.
Ex. Ajinomoto, Alaska Milk, and Century Pacific Foods.
2. Distributor- an entity or a company that purchases noncompeting products or product lines,
stores them in warehouses, and resells them to retailers or customers.
3. Retailer- is a person or business that purchases goods from the wholesaler or directly from
the manufacturer. They do not produce their own items.
4. Franchise- can be a manufacturer, distributor, or retailer. It is a method distributing products
or services involving a franchisor.
Franchisor- provides access to his business’ proprietary knowledge, processes, business
system and a brand’s trademark or trade name.
Franchisee- pays a royalty and often an initial fee for the right to do business under the
franchisor’s name and system.
5. Brick-and-mortar- it is a model that refers to old-fashioned street-side business that sells
products and services to its customers face-to-face in an office or store that the business owns
or rents.
6. Brick-and-clicks- it is a model where a company combines its online and physical presence.
7. Direct Sales- In this model, products are directly sold to the customers. Selling could be in
the form of face-to-face conversation or small gathering.
8. High Touch- This model uses a lot of human interaction and involvement in order to the
experience highly personalized. This type of business operates on trust and credibility to earn
revenues.
9. Family-Owned- is a family owned and operated by a family. The decision making is
controlled by family members.

Basic Types of Modern Business Models explained:

1. Nickel-and-dime- This model makes use of the lowest price strategy in selling basic product
or service to the customers. However, this model charges extra fees for services such as
meal/ snacks, beverage, and etc.

1
2. Freemium- This model is a combination of free and paid services normally used by tech
companies in the Software as a Service (SaaS) or apps business model. Usually, the basic
services are free but for a limited time or with limited features.
3. E-Commerce- This model is an upgradation of the old-style brick-and-mortar business
model. It focuses on buying and selling of goods or services creating a web-store using the
internet.
4. Subscription- This model offers a long-term contract to customers by paying a fixed amount
every month or year.
5. Aggregator- This is a network model, the company acts as a middleman between two
individual parties.
6. Online Marketplace- In the online marketplace, there is a collection of different sellers into
one platform.
7. Hidden Revenue- In this model the company offers its services for free. The company earns
revenue streams from advertisements which are paid for by identified sponsors.
8. Data Licensing / Data Selling- The internet has given rise to the importance of data.
Data- is the major element in web technology where companies need vital information to
perform its operation and gain profit.
9. Agency-Based- This is a partner company that has specialization in doing non-core business
activities such as advertising, digital marketing, PR, even janitorial and security.
10. Affiliate Marketing- This is a commission-based model where companies make profit by
promoting a partner’s product and convince its followers and users to buy the same. In
return, the affiliate gains a commission for every sales opportunity it referred to their vendor
companies.
11. Dropshipping- In a drop-shipping business, the owner has no ownership of the product or
hold any inventory but he has an E-store. The owner has many suppliers/ wholesaler to sell
their product on the website.
12. Network Marketing- also called multi-level marketing, this model works on direct
marketing and direct selling philosophy. This is a commission-based model where
participants earn income through selling and recruitment of members.
13. Crowdsourcing- This is a model that solicits intellectual information of users on what value-
added concepts be inputted in the product and or service offering.
14. Blockchain- This is a digital ledger that is irreversible and decentralized. No one owns and
monitors this digital database but anyone can contribute to it. This model works on peer-to-
peer interactions and document all on a digital decentralized ledger.
15. Low Touch- In this model there is minimum human assistance or intervention in selling a
product or service.
16. Razor and Blade- It is a business model in which one item is sold at a low price or even
given for free in order to intensify the sales of a complementary good, such as consumable
supplies.
17. Consulting- is composed of experienced and qualified professionals that offers services
based on their line of expertise.

2
18. Social Enterprise- This model aims to put up a business more for creating a positive change
but with profit. The profit though is intended for humanitarian works to improve human
living condition.

Business Model Canvas

Business Model Ontology- Alexander Osterwalder book, the Business Model Canvas consist
of 9 segments for its building block. This comprehensive description of this business model in
his bestselling book “Business Model Generation”.

Four Major Parts of the business canvas model:

1. Infrastructure- includes key partners, key activities, and key resources.
2. Offering- consists of the value proposition.
3. Customers- compromises customer segments, channels, and customer relationship.
4. Finances- takes into account the cost structure and revenue streams.

Key Partners- are the network of suppliers and partners that may provide the business model
more effective.

Four Types of Partnership:

1. Strategic alliances- This partnership is an arrangement between non-competitors to help
each other do an equally advantageous task but retaining their independence.
2. Coopetition- This partnership is an agreement between competitors to help share the risk
that these companies may take.
3. Joint-ventures- This is when two businesses because of their mutual interest agreed to
forma completely different company. A new market or a new geographic area could be the
reasons for combing their resources in a joint venture.
4. Buyer-supplier relationships- These are the most usual type of partnerships in businesses.
Such relationships make certain that there will be a dependable spring of supplies coming
in.

Key Activities- are the most essential activities in achieving a company’s value proposition and
to operate successfully. This is mostly a bridge between value proposition and the customer
segment.

3
Categories of Key Activities:
1. Marketing- Adding value by promoting products and/or services such as advertising a
product to create awareness and hence demand.
2. Sales- This concerns selling a product and/or services.
3. Design- This is about forming designs of various items.
4. Development- This is adding value through developing products and services.
5. Operations- The manufacturing of products and delivery of services.
6. Distribution- This is all about reaching out to the customers to sell to them and
delivering the items to them.
7. Customer Experience- customer service, consulting and customer support are some of
the activities involve here.

Key Resources- describes the most important assets required to make a business model work.
This are resources that allow an enterprise to create and offer a value proposition, reach target
market, maintain good relationships with customer segments, and gain revenues.

Four Categories of Resources:

1. Physical- These are physical assets which are considered tangible resources that a
company make use of to form its value proposition.
2. Intellectual- These are non-physical, intangible resources such as brand, patents,
proprietary knowledge, copyrights, and even partnerships.
3. Human- Employees are the biggest and most vital resources of any company but are
often overlooked.
4. Financial- All businesses have key resources in finance, however some will have
stronger financial resources compared to others.

Customer Value Proposition- is a business’s way of generating value in their product or service
when targeting potential customers. It is a description of the user’s experiences that he will come
to realize upon buying and using of a product.

Value Proposition- is a statement consisting of the reason/s someone should do business with
the company.

Factors considered in the development of the customer value proposition which are:
1. Functional value- The product and or service offers the solution to a particular problem.
The said solution is convenient, better version, easier to use and more.

4
 2. Emotional value- The product and service is pleasant to look at or attractive. Here the
customer is fond of this offering because of sentimental reasons, based from tradition or
the advice of people attached to the customer.
3. Economic value- The product or service offers a financial advantage, promotes energy
conservation, saves time or is innovative.
4. Symbolic value- For the customer the product and or service is valuable because of a
certain type of status given to the customer. This status can be a social responsibility
orientation or based from the brand.

Different Types of CVS:

1. All Benefits- The company in this type of CVS just list all the benefits or solutions that a
product and/or service offering can deliver and serve to target customers.
2. Favorable Points of Difference- The company using this type of CVS tries to
differentiate their solution by conveying its point of difference compared to the
customer’s next-best alternative.
3. Resonating Focus- The company making use of this CVS identifies one or two points of
difference between the its solution and its competitors that provide the best value to the
target customers.

Customer Relationships- are the types of relationship a company forms with its particular
customer segments.

Types of Customer Relationships:

1. Personal assistance- Founded on human collaboration, the customer can communicate
with a real salesperson to provide help during and after the sales process.
2. Dedicated personal assistance- This is the deepest and most intimate type of
relationship that involves assigning a salesperson to an individual customer.
3. Self-service- Basically there is no direct relationship that exists here, although all the
essential things to assist customers help themselves are given.
4. Automated services- This is a combination of customer self-service and automated
processes.
5. Communities- User communities can be used by companies to be more close and
connected with their current and potential customers.
6. Co-creation- Basically, this is an extension of the traditional customer-vendor
relationship.

5
Customer Segments- refers to demographics such as age, ethnicity, profession and/or gender.

Types of Customer Segments:

1. Mass- This is basically an unsegmented market in which products with mass appeal
products such as aspirin, soft drinks, and etc. and the like are offered to every customer.
This segment must be for a bi number of people who has similar problem or need
requirement.
2. Niche- This market speaks of a customer segment with very distinct characteristics and
extremely specified needs. This segment necessitates a highly customized product,
custom made to fit their needs.
3. Segmented- There are businesses that select to offer products and/or services to customer
segments that have very small differences in their need requirements. This segment, the
company forms various customer value propositions based on these small differences in
the customer segments.
4. Diversified- Some companies often select differentiated customer segments. Basically,
these customer segments have very diverse needs and wants.
5. Multi-sided platforms- This type of customer segment is used when customer segments
are reliant with each other, which makes it a necessity to serve both sides of the balance.

Channels- are the touch point through which a company communicates with its target
customers.

Five Phases that a Channel may pass through:

1. Awareness- This is the marketing and advertising phase. Said phase entails educating the
target customers about the features of the product and/or services and how these offerings
shall be of value to them.
2. Evaluation- In this phase, the customer evaluates, read about or uses the product or avail
of the service in order to formulate an honest opinion about it.
3. Purchase- This phase is the actual sales process.
4. Delivery- also known as the fulfillment stage of the process, this is the phase when the
promised value proposition has reached the customers.
5. After Sales- This phase centers in giving customer care and support after purchase.

Different Channel Types:

1. Direct channels- are those that the entrepreneur owns or has control over. This could be
his physical store, website, or sales force.

6
 2. Indirect channel- also known as partner channels, the company makes use of
intermediary and places its products or makes the service obtainable at the partner store.
Wholesalers are considered partner channels.

Value Proposition Canvas- makes certain that a product and/or service takes into consideration
the value and needs of the customers. Developed by Alexander Osterwalder.

Customer pains are situations which either avoid the customer from getting a job done or the
negative experiences, emotions and risks that the customer experiences before, during or after a
job. Said pains include the following:

1. Productivity pains- These pains include the inefficiency of the businesses that a
customer experiences. Majority of customers practice time management that they felt
annoyed when additional steps would occur in the buying process.
2. Support pains- These are pains felt by a customer when he is not assisted during the
buying process.
3. Financial pains- These are pains that involve money in particular that often a customer
spends too much for a product and/or service when his intention really is to spend less.
4. Process pains- These pains those that create friction to buyers because of the substandard
processes of the business.

Customer jobs- describe the functional, social and emotional tasks, customers are trying to do,
challenges they are attempting to resolve and needs they desire to satisfy in their personal and
professional lives. Known also as jobs-to-be-done (JTBD) shifts the focus from a hypothetical
or aggregate user to what actual users want to accomplish by using the product.

Types of these jobs:

1. Functional jobs- These are the regular and particular jobs that a customer is trying to do
and is working towards. These are easy and simple things like cooking a menu, finishing
an essay for the English assignment, eating balance diet and other similar ones.
2. Social jobs- These consist of the manners a customer desires to reflect his image in a
social environment. Some examples include fitting in with a group of friends or praising
a co-employee in his sales presentation.
3. Personal/ emotional jobs- These include how a customer works towards feeling a
certain way. Some people feel they can rush from a tough task and then do another task
after like having a gym practice before dinner time.
4. Supporting jobs- Often customers also purchase value, hence doing a supporting task.

7
Three roles of customers that may assist in supporting jobs:
1. Buyer of value - This task is any purchase of value that may cover from evaluating
choices at hand up to paying for the product that had been chosen.
2. Co-creator of value - These are jobs for which a customer has a direct hand in the
manufacture of the product with the company. Such jobs include providing ideas for
product design, product testing and giving product and/or service reviews online.
3. Transferor of value - These are jobs at the end of the product use such as disposal of
product trash or giving the ownership of the product to another person because it has no
value anymore to the original owner.

Elements of Lean Canvas Model:

1. Problem- In this box, the entrepreneur shall list the three high priority problems that the
customer segment is experiencing.
2. Solution- Once a problem has been identified, the next step to look for the effective
solution. According to Steve Blanks, the Godfather of Lean Startup, the entrepreneur
needs to "get out of the building". The phrase was coined by Blanks to mean going out in
the streets and interview the customer segment.
3. Value Proposition- This block contains a marketable promise to the target user that the
business will solve their problem. This is similar with the business canvas model.
4. Unfair Advantage- A startup should recognize if it has the competitive advantage that
cannot be copied and cannot be bought or it has an unfair advantage over others.
Basically, this block is hard to answer, but essential especially when looking for partners
and investors. The entrepreneur needs to think about what the business has that no one
else can buy such as dream team, expert endorsements and existing customers.
5. Customer segments- This is similar with the business canvas model. The problem and
the customer segments must be connected.
6. Channels- These are the ways to reach the customer segments. Channels, which are free
as well as paid, can be used to reach your customer directly. They can be email, social,
CPC ads, blogs, articles, trade shows, radio and TV plus webinars which are also the
same with the business model canvas.
7. Revenue Streams- This is the money matter of the business just like in business model
canvas. It is common for startups to lower their cost or even offer it for free in the
beginning to gain attraction. Getting people to sign up for something for free is not the
same than asking them Ito pay as they are more interested in free products.
8. Cost Structure- These are the operational costs that the business needs to pay in bringing
the product to the market such as salaries, cost of the materials, cost of maintenance. The
complete variable costs and fixed costs are to be listed here.
9. Key Metrics- The metrics consist of the assortment of products and/or services the
business wants to deliver. For a startup business though, one metric is good enough and
then just build on it.

8
 CHAPTER 5: CUSTOMERS AND MARKETS

Customers- are the core of every business.

Market- is any place where manufacturers, distributors and retailers sell and consumers buys
(physical shops, high streets, or websites). Also speak of group of buyers for a product or
service. The prices of products and/or services are dictated by the market due mainly from
demands and competition.

Things that customers look for when buying an offering:

1. Price- Customers look at price when buying a product or availing a service. Customers
purchase within their budget limit.
2. Experience- It is essential to provide experience in addition to good product/service
quality, and this may create loyal customers.
3. Design- The product must always be appealing to customers.
4. Functionality- It is expected by the customer that the product he/she is buying serve its
purpose.
5. Convenience- The product/service must always readily available for the customer, or he
will not buy it and look for an alternative.
6. Reliability- The product should be dependable and should meet the customer’s
requirements and expectations every time he buys it.
7. Compatibility- The product should be well- matched with the other products that the
customer is already consuming.
Types of Customers:
1. The Potential Pandoy (Potential Customer)- Pandoy can’t be considered customer. He
needs a convincing and assistance to change him a paying customer. He may show
interest in the product/service by filling out a contact form, signing up or asking a
question through live chat/personal message.
2. New Netnot (New Customer)- A fresh customer who bought something the first time
from a business. An entrepreneur must be watchful in dealing first time customer, as the
saying goes "first impression is the last impression.
3. Impulsive Icoy (Impulsive Customer)- A customer that make instant buying decision
based on craving or whim. Highly influenced by current mood when shopping and needs
not much convincing to buy as long as he wants to buy.
4. Discount Daboy (Discount Customer)- A customer who never buys a product/avail
service on full price, only on a discounted rate. Daboy never shop anything off-sale, and
difficult to retain as a customer once discount stops applying. Least loyal and big in pie.

9
5. Loyal Lando (Loyal Customer)- A satisfied customer that keeps coming back for more
purchase. Lando is brand's ambassador that can recommend a business to people,
attracting new customers. He can help an entrepreneur grow business using word of
mouth.

Target Market- is a group of possible consumers or organizational buyers whom a company

wants to sell its products/services.

Approaches in describing the perfect customers:

1.Consumer or business- A product/service may be intended for a business-to-business
(B2B)/ business-to-consumer (B2C) market.
2. Geographic- Defining the target market in accord to the place where possible customers
live or work, take vacation or do business.
3. Demographic- Target market is describing by means of age, gender, income level,
educational background, marital status, and other areas of an individual customer’s life.
4. Psychographic- Characteristics based from intrinsic traits of a customer like personality,
lifestyle, social status, AIO (activities, interests, opinions) and attitudes.
5. Generation-Businesses these days define their target market based on which generation
they were born in.
6. Cohort- Group of subjects who share a significant characteristic or experienced a common
event in a selected time period.
7. Life Stage- Other businesses use this for target marketing whether its infancy, childhood,
adolescent, adulthood or old age.
8. Behavioral- Another way of finding the target market is based on customer loyalty,
occasion-based, consumer usage and others.

User Persona- Short fictional profile of an ideal user or customer. Includes fictional name
and photo, demographics, user needs and desires, goals, motivations, activities, pain points
and quotes.

Steps to Create a User Persona:

Step 1: Create a Header- the header consists of a fictitious name, a picture and a quote
which sums up what is the most important to the persona that is related to the product and/or

10
 services. These are intended for memorability, so designer/entrepreneur is focused on these
users.
Step 2: Include a Demographic Profile
a. Personal background- consists of age, gender, ethnicity, education, persona
group and family status.
b. Professional background- contains details like occupation, income level, and
work experience/s.
c. User environment- physical, social, and technological context of the user.
d. Psychographics- contains facts, for example, attitudes, interests, motivations and
pain points.
Step 3: Include End Goal(s)- The end goal is the encouraging factor that stimulates action. It
provides details on the wants and needs of the user that can be satisfied.
Step 4: Include a Scenario- An everyday life scenario is a story that describes the interaction
of the user to a product/service in a particular situation to reach his end goals. The scenario
details the when, where, and how of the story that happens.

Customer Journey Map- A most popular and favorite tool for imagining the customer's
experience/s is the customer journey mapping. Customer journey map is representation of typical
customer's experience over time instead of a snapshot. It is different from customer persona.
The emphasis of a persona is on the person, while customer journey map highlights their
experience. A customer journey map is a story intended to give awareness of the customer's
complex buying trip.

Key Components of a Journey Map:

1. Actor- The viewpoint of the journey who is the persona or user. The actors must be in
relation with personas and their respective actions. There must be one journey map for
each persona in order to create a solid and rich story that captures their particular journey.
2. Scenario + Expectations- The scenario is the situation which the journey map talks
about in relation to the actor's goals, needs and expectations. When the product is still in
the development stage, scenarios could be those that are projected. However, for existing
products and services, scenarios should be what are real.
3. Journey Phases- These are the various high-level stages in the journey of an actor. These
phases are responsible for the information about actions, thoughts, and emotions in the
map. Company should have data to determine various phases for particular scenario.
a. Ecommerce scenario- buying a set of Bluetooth speakers may have a
discover, try, buy, use, seek support phase.
b. Huge or expensive purchase- test driving and buying a car may include stages
such as engagement, education, research evaluation and justification.

11
 c. Business-to-business (B2B) scenario- rolling out an internal tool may
consider stages like purchase, adoption, retention, expansion and advocacy.
4.Actions, Mindsets, and Emotions- These include behaviors, thoughts, and feelings the
actor has during the journey and drawn within each journey phases.
a) Actions- the concrete behaviors and steps engaged by users. This element is
not meant to be a step-by-step record of every isolated interaction. It is a story
of the steps the actor undertakes during that phase.
b) Mindsets- thoughts, questions, motivations, information of the actor at various
steps in the journey.
c) Emotion- distinct line across the journey phases. This line accurately indicates
the emotional "ups" and "downs" of the experience. It gives idea of the related
layer of emotion that the actor feels such as very happy against unhappy.
5. Opportunities- Insights obtained from mapping. Used to identify the ways of optimizing the
actor's experience. Insights and opportunities are useful in getting knowledge from journey map
in terms of:
f. needs to be completed with this knowledge
g. owner of respective change
h. the biggest opportunities
i. ways of measuring improvements as they are implemented

Importance of a Customer Journey Map:

1. Refocus a company with incoming perspective- The company construct the type of
content which will draw the attention of customers and help to keep them. With inbound
marketing, an entrepreneur may help his customer discover his company and website.

Inbound marketing - also known as “content marketing” is creating blogpost, social

media, infographics, white papers, email newsletters, and other content that people
actually want to read.
2. Form a new target customer base- With journey mapping, an entrepreneur will provide
a good picture of the types of people who are trying to accomplish a goal with the
company. The needs and pain points of usual customer must be researched on.
3. Form a customer-focused mindset all over the company- The journey map outlines
each single step of the customer journey with initial attraction to post-purchase support
that concerns marketing, sales, and service.

Steps to Craft a Customer Journey Map:

1. Set clear objectives for the map- Before creating a map, an entrepreneur should know
the goals he is directing the map and the experiences it is based upon or he may create a
buyer persona.

12
2. Profile personas and define their goals- The next step is to make researches by getting
valued customer feedback using questionnaires and user testing. An actual customers or
prospects are reached out to make feedbacks.
3. Emphasize the target customer personas- Each customer has his own journey map that
takes definite path with his experience in the entrepreneur’s company. The rule of thumb
is select the most common customer persona and study the pattern he takes when doing
business with the company.
A marketing dashboard may be created to make comparison of the different personas
that would fit in with persona. Personas that have eliminated could still be reconsider
through a new map.
4. Write down all the touchpoints- This step is vital in creating a customer journey map
since the insights into what action his customers are doing revealed here. Touchpoints are
tools that can help an entrepreneur understands the comfort and purposes of customer
journeys.
a. Actions- An entrepreneur write down all actions his customers are doing as they
interact with his brand or company.
b. Emotions and motivations- Every action that a customer takes is triggered by an
emotion. What drives emotion of a customer is a pain points or problems.
Knowledge on these emotions and motivations will give the fitting content at the
right time so that there will be smooth customer’s emotional journey through
entrepreneur’s brand.
c. Obstacles and pain points- The road blocks that are preventing the customer to
take the preferred action must be revealed.
Cost is one of the prime problem.
High shipping rates may cause a customer not to buy the product even he so
desires it.
5. Identify the elements of the map to show- Several types of customer journey maps with
benefits.
a. Current state- This type of customer tries to create in one’s mind the actions,
thoughts, and emotions customers presently experience while interacting with
entrepreneur’s company.
Best applied: for continuously refining the customer journey.
b. Day in the life- Customer tries to create in one’s mind the actions, thoughts, and
emotions customers presently experience when he participates on daily basis
whether it includes the company or not.
Best applied: for fulfilling unmet customers’ needs before they even know they
exist.
c. Future State- Designed by an entrepreneur to imagine actions, thoughts, and
emotions of his customer’s experience as the latter interacts with his company in the
future.
Best applied: for illustrating vision and planning a clear objective.

13
 d. Service blueprint- Starts with simple version of the mentioned maps. The latter
add those factors in charge of providing the experience such as people, policies,
technologies and processes.
Best applied: when determining the steps required to accomplish the preferred
future customer journeys.
6. Identify resources on hand and those that are still needed- The entrepreneur must
emphasize all the resources that goes with the customer experience. It is necessary for the
entrepreneur to come up with the inventory of the resources he has on hand and those
resources he will be needing to improve the customer’s journey.
7. Experience the customer journey himself- After designing customer journey map, the
entrepreneur must analyze the result himself.
Mapping the customer journey remains hypothetical unless the experience has been tried
by the entrepreneur himself. The entrepreneur may follow the journey of each personas
using their social media, reading their emails and searching online.
8. Create the needed changes- The analysis of data can give the entrepreneur the idea on
what his website must be. The entrepreneur may create the applicable changes to his
website to accomplish his goals for the business.

Market Sizing- Refers to the aggregate number of possible buyers of a product/service in an

industry and aggregate revenue these sales may produce in a year.
It is vital and beneficial to know the possible market size prior to the introduction of a new
product, new product line or new line of business.

Four Categories of Market Sizing:

1. Potential Available Market (PAM)- It is the total possible value that represents the
global market of products/services sold-over definite timeframe without any limits of
geography and other factors. This assumes the 100% market share.
2. Total Addressable Market (TAM)- It is the potential value of product/service sold to
particular customer. This shows the number of customers in core market around the
world who are in need of entrepreneur's product/service offering.
TAM is irrespective of competition. These may not necessarily those who won afford to
buy the offering, but they have a need of the item. In estimating TAM, type of customers
in need of the product/order and their volume requirement must be known.
3. Serviceable Available Market (SAM)- SAM is the subset customer of the total
addressable market (TAM) who can be reached and ready to buy goods or services using
a one revenue stream/channel.
4. Serviceable Obtainable Market (SOM)- This is the subset of the SAM that will
realistically get to use a product/avail of the service. This is the target market who the
entrepreneur primarily sell to. There is much consideration to strategic development of
the market and the competitors’ actions.

14
An entrepreneur should have a strong understanding of his local market, a deeper knowledge of
his own company and what he can deliver.

Market Sizing Approaches:

1. Top Down- Completed using demographics (company size, industry type, location,
population, age, income). It requires determination of existing dependable top-line
demand estimate and combined to get best result.
a. Multi-client research to publishers - A lot of publishers on the market selling
products with different range underlying research and accuracy such as The
Freedonia Group, Packaged Facts, and Simba Information.
b. Apparent consumption calculated from government production and trade
statistics - Dependable industry shipment/production statistics and import/export data
for a given industry using sources (PTD, PSA, FTS of the Philippines, DTI). The
formula for this is:
Apparent Consumption = Domestic Production - Exports+ Imports

Pluses of Government and Trade Stats (In a particular order)

 Government and trade statistics widely available
 Government statistics bureaus are trusted sources of data
 Government statistics bureaus are trusted sources of data
Minuses of Government and Trade Stats (In a particular order)
 Multi-client studies are intended to provide a broad overview of large
industries
 Scope and segment definitions in multi-client studies may not align with
those desired
 Trade codes for product classifications may vary by country
c. A production census of leading suppliers in markets with a concentrated supply
base- When supply base consists of only few suppliers less than ten (10), top-line
demand estimates can be established easily be adding all the sales or production of
leading manufacturers of the product being studied.
2. Bottom Up- Only considered if there are no dependable sources of top-line demand
present. If this approach can give more dependable estimate through analysis of product
consumption in relation to a direct indicator (the product being consumed), this can be
useful. Compared to top-down, this approach is more time consuming. In this method, an
entrepreneur may be able to make extrapolation until he reaches an applicable scale.

Entrepreneurship Marketing- A marketing spirit that distinguishes itself from traditional

marketing practices. Avoids fundamental principles of marketing aimed for big well-known
marketing companies. It makes use of new and non-traditional marketing, making entrepreneurs

15
stand out from competitors. Entrepreneurial marketing campaigns try to emphasize the
company’s greatest strengths while stressing value to the customer.

Marketing Strategies that makes entrepreneurs successful when use in combination:

1. Relationship marketing- the emphasis is on building a solid connection between the
brand and the customer.
2. Expeditionary Marketing- Involves forming markets and creating innovative products.
The entrepreneur’s company acts as a leader rather than a follower.
3. One on One Marketing- Customers are marketed to as individuals. All marketing efforts
are tailor-fitted.
4. Real time Marketing- Makes use of the power of technology to interrelate with a
customer in an actual time.
5. Viral Marketing- It places marketing messages on the Internet so they can be shared
and expanded on by customers.
6. Digital Marketing- Leveraging power of Internet tools like e-mail and social networking
to back-up marketing efforts.

Six Elements of the Concept of Entrepreneurial Marketing by Michael H. Morris:

1. Customer Intensity- Concentrates on the enthusiasm, passion, zeal, and belief in
marketing that makes the company successful. Makes stronger the primary values of the
company and the passion for the customer.
2. Continuous Innovation- Constantly create innovative ideas and transform them into new
or improved products/services or processes.
3. Strategic Flexibility- Display an enthusiasm to always evaluate and fine-tune its
strategies, action plans, techniques of resource allocation, structure, culture, and
management systems.
4. Calculated Risk-Taking- Risk taking refers to pursuing a novel opportunities.
Entrepreneurs take calculated risks, but some can be serious for the future of the
company.
5. Proactiveness- Conscious of the significance of external marketing environment; yet
they do not take it as a given and recognize as possibilities.
Entrepreneurs try to reassess the elements of external environment to lessen its
ambiguity, moderate reliance and exposure of company.
6. Resource Leverage- Entrepreneur’s ambitions go beyond their resources; they are
obligated to utilize resources in the best way possible way. They control their resources
so that they can use them longer than others have used them in the past.

Personal Brand- One that differentiates an entrepreneur from the rest of his competitors. Forms
a lasting impression on the minds of the customers about the quality of his product/ service.

16
Benefits of Personal Branding:
1. Trust and Authority- An entrepreneur could build trust with his customer and position
himself as an authority and a thought leader in the industry.
2. Get Featured in Media- It is easier for an entrepreneur to pitch and be found by media
like online publication and etc.
3. Build a Network- With personal brand it articulates who the entrepreneur is, what he
does, and how he helps others. Brand makes it easier for other people and other
entrepreneur to see value in connecting with the owner of the business.
4. Attract More Customers- Building a personal brand that positions an entrepreneur as
the go-to expert in a particular industry or niche helps him to draw lots of his ideal
customer.
5. Premium Pricing- With a personal brand charging premium prices for products and
services is justifiable.
6. Create Lasting Platform- An entrepreneur may jump to multiple businesses on diverse
industries over the course of his career.
Personal brand stays with him as he moves from one venture to the next.

Social Media Platforms that can do a lot for an entrepreneur’s personal branding:
1. LinkedIn- Network designed to let others know who are professional. It can display
information such as school graduated from, line of study and expertise, work history,
passion, and the likes. When used effectively, this can create powerful background for the
current business and what a company can provide to its customers.
2. Twitter- Influential and popular platform for posting business news and development.
Allows an entrepreneur to communicate on current issues through comments which may
have something to do with his business. Using hashtags, an entrepreneur may get people
into particular topic, discover possibilities and stir motivation
3. Pinterest- Perfect for communicating entrepreneur's numerous interests. An entrepreneur
can post high definition photos of his products here, or something casual about what his
business does. He can even pin his packaging and logo, besides interesting and
beautifully made infographics to relate to his personal brand or his business

17