JuneEntrep11-III

LEARNING COMPETENCY as suggested by MELC:

 Recognize a potential market: screen the proposed solution/s based on viability, profitability, and
customer requirements.
 Select the best product or service that will meet the market need.

I. Objectives
1. Recognize a potential market.
2. Screen the proposed solution/s based on viability, profitability, and customer requirements
3. Select the best product or service that will meet the market need.

II. Topic: Recognizing Potential Market

Market identification is a strategic marketing approach and process that is intended to define the
specific customer of the product. There are three strategic marketing approaches that will assist the
entrepreneur in defining the specific market of the product. These are:
1. market segmentation,
2. market targeting, and
3. market positioning

Market segmentation is an entrepreneurial marketing strategy designed primarily to divide the market
into small segments with distinct needs, characteristics, or behavior (Koller & Armstrong, 2014).
The entrepreneur must divide the total market and focus his/her business strategy to a smaller market
that is considered homogeneous or have similar interests, preferences, needs, wants, and other related
variables. The identified market segment will be the market that can be served better by the entrepreneurial
venture based on its competencies.
The commonly used methods for segmenting the market are:
1. Geographic segmentation – the total market is divided according to its geographical location in the
Philippines like provincial regions, cities, municipalities and even barangay units. The following
variables must be considered: climate; dominant ethnic group; culture; density(either rural or
urban); and classification of geographical unit(first class, second class, etc).
2. Demographic segmentation – the market is divided based on demographic variables such as: age;
gender; income; occupation; education; religion; ethnic group; and family size.
3. Psychological segmentation – the market is divided in terms of what the customers think and
believe. It is based on the following variables: needs and wants; attitude; social class; personality
traits; knowledge and awareness; brand concept; and lifestyle.
4. Behavioral segmentation – the market is divided based on the following variables: perceptions;
knowledge; reactions; benefits; loyalty; and responses.
The following must be considered in segmenting the market.
1. Accessibility of the market segment – the segment must be accessible to the business
2. Size of the market segment – the segment must be large enough to provide wealth to the
entrepreneurial venture.
3. Distinction of the market segment – the segment must be easily differentiated from the total
market.

Market targeting is a stage in market identification process that aims to determine the set of buyers
with common needs and characteristics. In the market targeting phase, the entrepreneur has already divided
the total market and is now in the process of evaluating each market segment and selecting the target
market segment or segments to serve.
 The entrepreneur, after segmenting the market, does not simply select any market segment to serve.
He/She must instead conduct a proper and critical evaluation of every segment. He/She must considered the
following important factors:
1. Size of the segment and its expected growth – considered favorable indicators for doing business
in a particular location. However they fail to consider that when there are too many players in a
particular segment, doing business in it becomes too competitive.
2. Existing and probable structure of the segment – the entrepreneur must study the different
barriers that will lessen the forces of competition. Usually a highly competitive segment limits the
profitability and growth of a particular venture.
3. Capability of the business – the internal environment of the business including its capital.

There are three basic entrepreneurial marketing strategies relative to the selection of target segment.
These are:
a. Individual or one-on-one marketing – the business caters to the specific needs and characteristics
of individual consumers . Every consumers have distinct needs and wants.
b. Segmentation marketing (differentiated or concrete) – differentiated marketing is a strategy that
intends to serve almost all the segments but the business produces a product designed primarily for few
consumers in each market segment. Concentrated marketing intends to cover only one or few market
segments in which the business produces a product that will serve the majority of the consumers in the
few target segment.
c. Mass marketing - assumed that all consumers have common characteristics and needs and generally
applicable to commonly used commodities such as sugar and rice.

Market Positioning
Market positioning refers to the process of arranging a product to occupy a clear, distinct, and desirable
place in relation to other competing products in the mindset of target consumer. It is considered the last step
in product identification process.
The basic concept of market positioning is to clearly identify the specific and distinct position of the
product in the minds of the consumers.
The three steps in determining the market position of the product in the minds of the consumers are the
following:
a. The entrepreneur determines whether the market position is distinct from others.
b. The entrepreneur evaluates the advantages or benefits of every possible position.
c. The entrepreneur decides on the market position
Name:______________________________ Module: JuneEntrep11-III
Grade Level & Section:_________________

I. Write True if the statement is correct and False if not.

__________1. In market targeting, the entrepreneur defines the customers by way of segmentation.
__________2. In concentrated marketing, the business focuses its effort to a large number of consumers in one
or few segment.
__________3. All consumers prefer products with less benefits and are sold at lower prices.
__________4. Demographic segmentation involves dividing the total market based on the gender of the
consumer.
__________5. Market segmentation applies only to small entrepreneurial ventures.

II. Identify what is described in each statement. Choose your answer from the box.

market targeting individual or one-on-one marketing market segmentation

geographic segmentation market positioning marketing

__________6. It is an entrepreneurial marketing strategy designed primarily to divide the market into small
segments with distinct needs, characteristics, or behavior.
__________7. The total market is divided according to its geographical location in the Philippines like
provincial regions, cities, municipalities and even barangay units.
__________8. It is a stage in market identification process that aims to determine the set of buyers with
common needs and characteristics.
__________9. It refers to the process of arranging a product to occupy a clear, distinct, and desirable place in
relation to other competing products in the mindset of target consumer.
__________10. The business caters to the specific needs and characteristics of individual consumers.

Reference
Nick L. Aduana, Entrepreneurship in Philippine Setting, C & E Publishing, Inc.,2006;

“Tough times never last, but tough people do”

-Robert H. Schuller

Prepared by: Enrique C. Solis, Jr.

Checked by: Joseph M. Gutierrez

Noted: Donny Aries C. Malvar, EdD