Entrepreneurship
Lesson 3: Recognize and Understand the Market
Describe the unique selling proposition and value proposition that differentiates one’s product/service from
existing products/services
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
• Name of the product
• Name of the enterprise/company
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 an entrepreneur, you should think of marketing concepts that persuade your target customers. You
may ask the following questions in doing this: What do the customers want? What brand does well? What
does your competitor sell well?
Some tips for the entrepreneur on how to create an effective unique selling proposition to the
target customers are:
- Identify and rank the uniqueness of the product or services character
- Be very Specific
- Keep it Short and Simple (KISS)
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. Understanding your market is critical in
building your business model. There are three factors that will determine your customers.
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 a market segment that an entrepreneurial
venture intends to serve.
Marketing Segmentation
Is an entrepreneurial marketing strategy designed primarily to divide the market into small
segments with distinct needs, characteristics or behavior.
Segmentation is an important marketing technique that help you reach each group of potential
customers with an approach that appeals to them. Evaluating each segment ensures that your company
doesn’t waste resources on segments that won’t buy your products.
Commonly used methods for segmenting the markets are follows.:
1. Geographic segmentation – the total market is divided according to geographical location.
Variables to consider
a. Climate
b. Dominant ethnic group
c. Culture
d. Density (either rural or urban)
2. Demographic Segmentation – divided based on consumers
Variables to consider
a. Gender
b. Age
c. Income
d. Occupation
e. Education
f. Religion
g. Ethnic group
h. Family size
3. Psychological Segmentation – divided in terms of how customers think and believe
Variables 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.
Variables to consider
a. Perceptions
b. Knowledge
c. Reaction
d. Benefits
e. Loyalty
f. Responses
Market Segment Selection
The Basic entrepreneurial marketing strategies relative to the selective segment are the following:
1. Individual or one-on-one marketing – the business caters to the specific needs and
characteristics of individual consumers.
2. Differentiated marketing – differentiated marketing strategy is when a company creates
campaigns that appeal to at least to two market segments or target group.
3. Concentrated marketing – the business produces a product that will serve the major of the
consumers in the target in the few target market.
4. Mass marketing/ undifferentiated marketing – focuses on high sales and low prices and aims
to provide products and services that will appeal to the whole market.
Marketing Strategy
Before choosing the right marketing strategy for your business, consider following points.
1. Define the target population
2. Test your audience
3. Consider marketing strategies
4. Evaluate those strategies
Types of Marketing Strategies
1. Paid advertising
2. Cause marketing – links the services and products of a company to a social cause or issue.
3. Relationship marketing - enhancing existing relationship with customers and improving
customer loyalty.
4. Undercover marketing – focuses on marketing the product while customer remain unaware of
the marketing strategy. It is all known as stealth marketing.
5. Word of mouth.
6. Internet marketing
7. Transactional marketing – the retailers encourage customer to buy with shopping coupons,
discounts and big events.
8. Diversity marketing – it caters diverse audience by customizing and integrating different
marketing strategies. It covers different aspects like cultural, beliefs, attitudes views and other
specific needs.
What is Market Size?
Market size is like a size of the 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.
