Lesso The Potential Market and the

n Market
4 Need

EXPECTATIONS
After going through the module, you are expected to:
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 three (3) potential markets that entrepreneurs
should consider during this COVID -19 pandemic and indicate their needs. Write
your answer in the space provided.

https://images.search.yahoo.com/
 Learning Module for Entrepreneurship

Potential Market Market Need

1. 1.

2. 2.

3. 3.

You have finished answering the pre-test. You may

request your facilitator/guardian to check your work.
Congratulations and keep on learning!

LOOKING BACK TO YOUR LESSON

As we go further, let us try to recall the competencies in Entrepreneurship. o
Competencies such as risk seeking, assertiveness and vision are considered
typical of a successful entrepreneur (www.ideasforleaders.com).

o 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).

o 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 questions 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

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______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.

BRIEF INTRODUCTION

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).

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 Learning Module for Entrepreneurship

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.

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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 marke

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).

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 Learning Module for Entrepreneurship

Penetrated Market

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).
o 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 o 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).
o 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).
o A market is any place where sellers of particular goods or services can
meet with buyers of those goods and services. It creates the potential
for a transaction to take place. The buyers must have something they
can offer in exchange for the product to create a successful transaction
(Moffatt, M., 2019)

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Your market consists of: (Stull, C.,Myers, P.&ScottD.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?

ACTI VITIES

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 Learning Module for Entrepreneurship

Activity 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. Write your answer in the space
provided.

__________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. Write your answer in the
space provided.
1. Students need to 6. Arlene, a student of a public
buy a tablet/ school, needs mobile data in
laptop for school order to comply with the
requirements. requirements in school.
2. Ana used to buy 7. Hospitals need facemasks
shampoo. and PPEs.
3. Households living in 8. Mike, a sari-sari store owner,
a remote area. wants to go online selling.
4. Martha, a call center 9. Jeep drivers need to modify
agent, needs a Wi-Fi. their jeeps for public
transportation.
5. Karlo, a factory 10. Ella needs to buy her
worker, needs vitamin C to boost her immune
transportation. 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. Write your answer in the
space provided.

1. Customer vs. consumer _____________________________________________________

2. Demographic group_________________________________________________________
3. Market share _______________________________________________________________
4. Market size _________________________________________________________________
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 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.

CHECK YOUR UNDERSTANDING

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. Write your answer in the space provided.

Situations Rating Justification

To produce face
masks and PPEs.
To open on-line
business for

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 Learning Module for Entrepreneurship

fashion
accessories.
To open a massage
center.
To open a computer
shop.
To open a carinderia

POST TEST

Identification. Read and analyze the statements below and identify whether this
refers to potential market, available market, target market, or
penetrated market. Write your answer in the space provided.
_________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. Write your answer in the space provided.

Column A Column B
1. It is a company’s marketing goals and objectives A. Market
combined into a single comprehensive plan.
2. Refers to a person or organization that uses a commodity B. Target Market
or service.
3. This is an area or arena in which commercial dealings are C. Potential Market
conducted.
4. This is used to give a general idea of the size of a D. Need
company in relation to 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 G. Market size

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 service.
8. Circumstances in which something is necessary, or that H. Customers
require some course of action; necessity.
9. The study of the characteristics of human populations, I. Consumers
such as size, 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.

Congratulations! You are done in this module. You may now proceed to the
next lesson.

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