LESSON 3: UNDERSTAND THE MARKET other modules.

In promoting your products or services,

make sure that it is very specific and put details that
Value Proposition (VP) is a business or marketing emphasize the differentiator against the competitors.
statement that summarizes why a consumer should buy Keep it short and simple and think of a tagline that is
a company's product or use its service. This statement easy to remember. Right now, the proposed unique
is often used to convince a customer to purchase a selling proposition: “Charing Sari-sari Store, opens
particular product or service to add a form of value to 24/7”.
their lives. In creating Value Proposition, entrepreneurs
will consider the basic elements: Readers get confused between value proposition and
unique selling proposition. The two propositions are
 Target Customer used to differentiate the products from competitors. For
 Needs/opportunity example, Jollibee is known to have a Filipino taste
burger. This brand has a unique selling point because
 Name of the product of its tagline “Langhap Sarap”
 Name of the enterprise/company Unique Value Proposition and Value Proposition are
two most famous tools used to explain why prospect
There are many competitors in the market to establish
customers buy each products and services. Based on
superiority to them. Entrepreneurs should think some
each definition, we learn that USP and VP are
alternative and how it works better. An important aspect
frameworks of each business industry. The two
in Value Proposition must be truthful that will establish
propositions are valuable for the entrepreneurs.
credibility to the consumers.
After you understand the value proposition and the
Example: Potential value proposition is most common
unique selling proposition,now it’s time to understand
in small businesses of your locality.
the target market, customers requirement and market
Aling Charing Sari-sari Store open only from 6:00 am to size.
6:00 pm, but Aling Charing noticed that there are
customers who go nearby town to look for a A. Target Market
convenience store at around 10:00 pm to 6:00 am. She Market Targeting is a sage in market identification
believes that this is a great opportunity for her store to process that aims to determine the buyers with
operate 24/7. In this example, proposed value common needs and characteristics. Prospect
proposition: “Charing Sari-sari Store, opens 24/7”. customers are market segment that entrepreneurial
The business describes sari-sari store – a basic retail venture intends to serve.
store. The assurance from this value proposition is In targeting a specific market, it will exclude people
because of the phrase “opens 24/7”, Aling Charing Sari- even if it will not fit your criteria. Rather, target
sari Store opens 24/7, which make it different from marketing allows you to focus your marketing money
other competitors. and brand message on a specific market that is more
Unique selling proposition (USP) refers to how you likely to buy from you than other markets. Product is
sell your product or services to your customer. You will more affordable, efficient, and effective way to reach
address the wants and desires of your customers. As potential clients and generate business.
entrepreneur, you think of marketing concept that Commonly used methods for segmenting the market
persuade your target customers. The following are follows.
questions you may ask in doing this, What the
customers want? What brand does well? What your 1. Geographic segmentation – the total market is
competitor does well? divided according to geographical location.
Some tips for the entrepreneur on how to create an  Variables to consider:
effective unique selling proposition to the target
customers: a. Climate

 Identify and rank the uniqueness of b. Dominant ethnic group

the product or services character c. Culture
 Very Specific d. Density (either rural or urban)
 Keep it short and simple (KISS)
As entrepreneur, present the best feature of your 2. Demographic Segmentation – divided based
product or services that are different from other
consumers.
competitors. Identifying the unique selling proposition
requires marketing research that you will learn from the  Variables to consider:
 a. Gender e. Education Output Requirements:
b. Age f. Religion Tangible thing or things that can be seen. Characteristic
specifications that a consumer expects to be fulfilled in
c. Income g. Ethnic group the product. Costumer that will avail services as a
product, then various service requirements can take the
d. Occupation h. Family size form of output requirements. For example, if the
consumer hires a multi cab, then on-time arrival
becomes an output requirement. Customer buys
3. Psychological Segmentation- divided in terms for gadgets (phone speaker), the specification like the
customers think and believe. loudness and clarity are the output requirements.
 Variables to consider:
a. Needs and wants C. Market Size
b. Attitudes Entrepreneur’s most critical task is to calculate the
market size, and the potential value that market has for
c. Social class their startup business. Market research will determine
d. Personality traits entrepreneur possible customers in one locality.

e. e. Knowledge and awareness What is Market Size?

Market size is like a size of arena where the
f. Brand concept
entrepreneurs will play their business. It is the
g. Lifestyle approximate number of sellers and buyers in a
particular market. Companies are interested in knowing
4. Behavioral Segmentation- divided according to the market size before launching a new product or
customers behavior pattern as they interact with a service in the area. In determining the market size,
company. entrepreneur will conduct a strategic marketing
research from reliable sources using the following
 Variables to consider:
method. First step is to estimate the potential market –
a. Perceptions d. Benefits approximate number of customers that will buy the
product or avail your services. Second step is to
b. Knowledge e. Loyalty estimate the customers who probably dislike to buy
your product or avail the services. Third step is for the
c. Reaction f. Responses 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
B. Customer Requirements become the most important if you ever need to raise
funding for your business.

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.