Republic of the Philippines

DEPARTMENT OF EDUCATION
Region I
Schools Division of Pangasinan II
PANGANIBAN NATIONAL HIGH SCHOOL
Tayug

LEARNING MATERIAL
ENTREPRENEURSHIP
QUARTER 3, WEEKS 3-5
MELCs: Recognize a potential market
Select the best product or service that will meet the market need

K to 12 BEC CG: TLE_ICTAN11/12PC-Ia-1

Prepared by:

RANDY S. GARCIA
SHS Teacher III

Content Evaluated by: Language Evaluated by:

AMALYN B. MACUSI CHRISTOPHER M. RABARA

Teacher III Teacher III

Reviewed by:

REBECCA C. CABIENTE JANET V. CABIENTE

Master Teacher I Principal II
 General Instruction: Read the lesson and answer the activity sheets that follow.

Lesson 2: POTENTIAL MARKET AND MARKET NEEDS

POTENTIAL MARKET

A potential market is the part of the market you can capture in the future. These are
customers you don't have now, but can work to attract. Market potential is an estimate of the
maximum sales of a product or service. It is a somewhat imaginary estimate as it assumes
that you capture the entire market for a product. Nevertheless, it can be a useful reference.
The potential market refers to the future life of the company, focusing on consumers interested in
the products or services offered by the brand. It is a study that is done to make the products or
services capture the attention of potential customers, to make the company more sustainable.

Market potential is the entire size of the market for a product at a specific time. It
represents the upper limits of the market for a product. Market potential is usually measured
either by sales value or sales volume. For example, the market potential for ten speed
bicycles may be worth $5,000,000 in sales each year. On the other hand, the market potential
for motorcycles may be 500,000 units each year, which is a measure of sales volume rather
than sales value. Keep in mind that market potential is just a snapshot in time. It's a fluid
number that changes with the economic environment. For example, rising and falling interest
rates will affect the demand for products that are typically financed, like cars and houses.

Your potential market includes the demographic groups that are not currently your
customers but could become customers in the future. They might become your customers
because you expand your available products or services, or because you begin marketing your
current products and services in a new way and to new groups of buyers

Examples of a Market Potential

 Industry. The size of an entire industry such as fast food. This type of estimate tends
to be accurate as governments and industry associations may publish relevant data.
 Product Category. An entire product category such as boots.
 Niche. Looking at market potential for a niche product or brand. For example, the size
of the market for high-end snowboarding boots.
 Target Market. Estimates of market potential for a product with a specific target
market based on the factors such as price, lifestyle or demographics. For examples,
the size of the market for children’s snowboarding boots.
 Distribution. Considering the reach of your distribution channels. For example, if you
sell snowboarding boots in Canada and Europe you might estimate the size of these
markets. This is also known as serviceable market.

How Potential Markets Work

Potential markets are an important part of a business's future growth. Every business
has a set of target customers that make up its share of the available market. While you can
continue selling to these customers in the future, one of the best ways to grow your business
is to identify potential markets that you can begin targeting.
Potential markets allow you to:
 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.

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  Increase your revenue.
 Create a plan B that will weather changes in the economy or market.

Types of Potential Markets

Potential markets take one of three forms:

 New products you market to your current customers.

 New products you market to new customers.
 Current products you market to new customers.

To identify your new potential markets, consider every target demographic you
currently sell to, as well as those you have not yet targeted. Identify what they have in
common, new milestones they will encounter in their lives that will impact their buying
patterns, and where they overlap or diverge from your current customers. Ask yourself:

 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?

These questions 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. For example, a
business that makes baby products and markets them to parents could identify potential
markets such as:

 Toddler products marketed to parents of older children.

 Baby products marketed to grandparents.
 Toddler products marketed to grandparents.
 Baby and toddler products marketed to childcare providers.

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. Other times, you may need to
use research to identify the areas where your business can grow and expand.

While you may not decide to target every potential market that you identify,
understanding your options will help you discover the most natural and profitable directions
for your business to grow.

How to Get New Potential Markets

Once you've identified and chosen a potential market to begin targeting, you will need
new marketing strategies in place to communicate with them.

Though there may be some overlap between your current customers and your
potential market, you should still treat your potential market as you would your target
audience by creating a customer profile. Use this profile to identify:

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  The demographic information that people in this 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 you can help them overcome.
 What values matter to them, both in everyday life and when shopping.
 The language that resonates with them.

This information will be essential as you tailor your marketing to your new potential
market, helping you craft the right messaging, plan your marketing budget, and use the right
marketing channels and media to reach your new audience.

Even if you're not ready to begin selling to new markets, creating customer profiles
and sample marketing plans will help you understand the needs of each potential market, as
well as what it will take to reach them. This information will inform whether and when you
decide to pursue them, helping you identify the clearest paths your business can use to
continue to grow and expand. 

Characteristics of the potential market

This study has certain characteristics that must be known if you want to improve the life and
sale of a company:

 The estimates that result from the study of the potential market are not real since they
are taken from a possible value of the total sales of a certain product or service.
 Make a kind of marketing study to know what are the potential customers and meet
the needs of all of them, so that future products adapt to what they want.
 It will always yield the highest values of the sales of future products, all with an early
study of the demand for said product throughout the market.

Why is it important to know the potential market?

If you want your business to have a bigger sale, obtaining a much higher profit
margin, you have to go to the potential market. This market is something that focuses totally
on the future and possibly will work if you study how it should be and give it the importance
it needs.
It will help you have many more goals in mind and implement them over time. This
market implies that if you can have a more sustainable future in any company selling
products or services.
It is necessary to have a good organization and a clear vision of what you are looking
for when conducting the potential market study because with a clear mind you can get better
results and you can see the fruits of that approach.

How to look for potential customers?

A potential customer is a person who can become a buyer or consumed the products
or services offered by the company, all this focusing on the future.

How to know if you are a potential customer?

This should have similar qualities or characteristics, whether in terms of tastes or
needs. It is important to know the economic situation of the person, to know if he can acquire
the product or service. All that will be known at the end of a good marketing studio.

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Characteristics of the potential client
It is important that the company knows the following characteristics to know if it is an
ideal client:

 Tastes: it is important to know the interests of the buyers, especially their tastes and
opinions about such services or products.
 Location: the place where people live is a point of importance since it will depend on
their purchase of the product or service and their needs.
 Demographic: at this point, we talk about the age of potential clients, sex, economic
income, social status, profession, and education.

How to reach potential customers?

You should look at the customers that the company already has and then if you go
directly to those who look like them. Focus on clients who have an age range after 18 or 20
years, who already have greater financial freedom.
If you want to obtain higher sales, innovate something that reaches a broader age
range and with a more accessible economic status for all of them, to generate more sales and
get more customers. More interest is obtained when a new product is launched or an existing
one is improved.
When you have an established group of customers, you need to create a good
marketing technique so that new services or products are made known to all people. You
need the help of a good information channel, which is already a personal decision of the
company, in addition to the correct messages that get even more attention from future
customers.
It is essential that a connection with the client be achieved since the future and
sustainability of the company will depend on it. Good planning must be carried out and every
point carried out very carefully.
To achieve greater economic income, you must know what the competencies of the
company are, and then know if it is profitable to make such investment in production, market,
and marketing.

Potential Market Data

To determine the potential client, a series of data must be taken into account to obtain a
more complete study:

 Salary of the people: with this data, a more accessible sales price will be established
for all those people who live with a minimum monthly salary.
 The number of shops or companies: data necessary to know the current competition
of the company or business. the sale price of said competition must be known.
 Tourists: if the number of tourists in the area is high, the ideal would be to reach
them, in case the service is for lodging or tourism.
 Traffic: if you have a business with a store in a busy area, it is important to make the
potential market, in this case, potential customers, manage to observe that
establishment so that they can enter it and become a consumer of them.

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Results of the potential market
The result of potential market will depend on a good marketing study, both at the
level of study of potential consumers and that of marketing, so that all the initial work
reaches the ears of the entire previously selected population.

The aforementioned will determine if it is profitable to do all the production and

marketing work and if everything invested in the intense work will be worth it.

What is Market Size?

Market size is defined as the total number or value of potential buyers for your
product or service. There are many ways that you can define a market but the most
typical ways are by geography (e.g. Germany), or by sector (e.g. medical devices), or
by a combination of these two factors.

Why is it important to define?

Like our Dragon’s Den example, one potential audience for market size are
external company investors. Their motivation: what is the scalable opportunity for
this business?

In most cases however the more important audience for this intelligence is
inside your company:

Sales: To develop a growth plan what is the potential for this growth? How many
potential buyers are there for us to target? What share of this market potential could
we win versus competition in the marketplace?

Marketing: Is the market we operate in growing, mature or declining in size and

based on this information what is our strategy to grow within this?

R&D: Is the potential for our existing products or services limited by the size of the
market and do we need to innovate to expand our market potential or enter new
markets?

Finance: If we invest in sales, marketing or product development, what is our likely

return on investment from this?

So fundamentally, defining the market size and potential for your products and
services should be a continuous conversation within a company to protect your
market position and foster growth strategies.

Understanding your TAM, SAM and SOM

These terms are key to defining your market size and potential in a realistic
way so let’s look at these definitions with an industry example:

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 Your product: Your company manufacturers temperature sensors and is
targeting the German automotive sector.

TAM (Total Available market). This is the total market demand for your product or
service. In this case, it is defined as the total demand for all types of temperature
sensors by German automobile manufacturers. Good to know, but in reality there are
many technology choices when it comes to temperature sensors and you may be
unable to provide a technical solution to meet all of these.

SAM (Served Available Market). This is the portion or segment of the total market
that you are able to potentially serve with your current technology. Temperature
sensing can be addressed through many sensor types including NTC, PTC, RTD,
Thermocouples, etc. Our sample company just makes NTCs so they are only able to
serve the portion of the market which will use this type technology – i.e. their served
available market.

SOM (Serviceable  Obtainable Market). Okay, you have defined your SAM but in reality
you need to consider existing competition, your actual competitiveness and other
factors which may be outside of your control. For this reason, you may come up with
a more conservative estimate of what element of the market you can win (or obtain).

By thinking about your market size along these lines you will not only more
realistically define your market but also identify suitable growth strategies for your
company.

It is rare that you will be able to quantify market size in exact terms. The best
that any company can do is estimate this using validated sources and credible data.
Market size can be estimated in two ways: Top-down and Bottom-Up.

Top-Down

We always start with a comprehensive internet search for industry

publications, magazine articles, the annual reports of some of the larger industry
players, etc. as many of these sources will comment on the market in an informed
way. For many markets, independent industry reports may exist which value the
overall market size and provide data on key segments and industry trends. These
reports are great at providing a birds’ eye view of an industry and as they are
normally compiled by professional research companies and provide a validated and
objective source for your business plan.

There are a two downsides however: (1) they can be very expensive and
prices of $5000 per report would be typical, and (2) they can be too general and
provide you with information on the broader market only, your TAM, rather than the
specific market you operate in, your SAM.  If these top-down searches are

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unsuccessful for you, or financially prohibitive, then you need to look at option 2:
Bottom-Up.

Bottom-Up

A bottom-up approach is one where you undertake your own research to

identify specific customers within your target market and build assumptions around
this. In the case of our temperature sensor company, this would involve researching
a list of the German automotive manufacturers (TAM). It would then involve meeting
and speaking with a sample of these companies to understand their temperature
applications in more detail and the commercial opportunity for your specific
technology from there (SAM). This is a process which takes time as getting in front
of target customers is not easy. You could also describe it as a sales led approach
but our experience is that it provides very grounded feedback and truer evidence of
market potential to inform your overall market assumptions.

12 Ways to Select the Best Product Idea to Bring to Market

There are many steps required to bring a product to market, but ultimately, it all starts
with the product idea itself. If you have the wrong product idea, then all the other steps, no
matter how well you perform them, won’t really matter.

#1: Simple and Affordable to Develop

The number one most important attribute of a winning product for a startup is it needs
to be realistically affordable for you to develop and prototype.
Product development is much more complicated than most lay people can imagine, so
you must embrace product simplicity in order to have a real shot at success.
It’s really critical that you, especially for your first product, try to make the product as
simple as possible. That way your development cost and your time to market will both be
minimized.
It’s important that you get your product to market as fast as possible so you can begin
gathering market feedback. Then, you can use that feedback to potentially modify the product
to meet what the real market demand is.

#2: Affordable to Scale to Manufacturing

You want a product that’s affordable to scale from the prototype stage to mass
manufacturing.
One major challenge of scaling a product to mass manufacturing is the cost of
injection molds required for any custom plastic parts.
Each custom piece of plastic will require its own injection mold. For really high volume
production, these molds are extremely expensive.
A minimum cost for a mold will be around $1,500 for a simple, low-volume mold.
More complex molds for high-volume production can cost tens of thousands of dollars each.
Although developing a product that requires a bunch of custom shaped plastic pieces may be
affordable using 3D printing, it will become significantly more expensive to scale when
injection molding becomes required.

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 For example, if your product requires ten custom plastic parts, then you will need ten
separate molds. Each mold will cost anywhere from $1,500 to $50k depending on the
production volume and part complexity.

#3 – Potential for a High Profit Margin

Developing and marketing a new product can be tremendously exciting and fun. But
ultimately, the goal is to make money, right?
This means you need to focus on a product with a high profit margin. You ideally
want the suggested retail price for your product to be about 4x what it costs to manufacture.
You can push that down to 3x the manufacturing cost, especially if you’re selling
direct to consumers and not going through distributors or retail chains. But I would not go
any lower. For one thing, it becomes exceptionally difficult to grow a business with low
profit margins.
That being said, you can’t expect to make a high profit when first starting. You’ll be
lucky if you can just break-even on your first small production run. Many times you will need
to sell your first several hundred units at a loss.
As your production volumes increase so will your profit margin. Once you reach
volumes of 10k-100k pieces for most consumer products that is when you should expect to
make a significant profit.
The higher your profit margins the easier it will be to grow your company.
Profit should never be your immediate goal, and that will come later as you scale to
higher volumes. In the early stages, focus your efforts on minimizing your development
costs, not on maximizing profit.
However, you do need to have accurate estimates on what your manufacturing cost
and profit margins will be once you reach those higher volumes.
For example, you may break even on volumes under 1k, make a small profit on
volumes between 1k and 10k, then make a profit margin of 33% for 10k pieces, and finally
reach 50% at volumes of 100k units.
You just need to know upfront that once you reach high enough production levels, a
significant profit is possible.
If you determine in your analysis that 25% profit is all that can be made, even at high
production volumes, then you likely may want to consider a different product, or consider if
you can increase your sales price.
Keep in mind that investors love high profit margins (of course, right!) so having a
higher potential profit margin will make it easier to find them.

#4 – Recurring Revenue
Many may say the Holy Grail of making money is it to create recurring revenue
streams. Recurring revenue simply means that your customers pay you a fee automatically
every month. Most of the online software services you use are paid for on a monthly
recurring basis.
If someone buys your hardware product, can you add a monthly fee to use a web
service or an app that relates to your product?
Finding a way for your business or product to have recurring revenue will be a huge
boost for your company, especially if you ever want to seek outside professional investments.
A lot of investment companies like this aspect because it makes revenue more
predictable and allows a company to grow much faster.
For instance, Bolt.io is an angel investment group that focuses on hardware products.
They specifically prefer hardware products with a recurring revenue model.
Recurring revenue is such a coveted way of making money because it’s predictable.

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Obviously, people can cancel their membership or subscription, but in general you will have
a group of customers that just keep paying, allowing you to know how much you’re going to
be bringing in each month.

#5 – The Price is Right

Be sure to pick a product that’s in a good price range. First of all, you don’t want a
product that has too low of a price. That’s because it will require a lot of volume to make any
significant revenue.
This was one of the major mistakes I made with the physical product I brought to
market. It only sold for between $5 and $10 meaning I had to sell a huge number to generate
significant revenue and profit.
On the other extreme, if your product is too expensive, say $1,000, then that will
present a significant barrier to people purchasing, especially if you’re an unknown company.
It’s much easier to get $5 or $10 out of a person, or even $100, than it is $1,000. Especially if
they don’t know you or have experience with your products. That’s going to be a significant
barrier to purchase.
Focus on products that aren’t too low in price, but also not too high. I’d say between
$29 and a few hundred dollars would be the best price range.

#6 – Differentiated Product
Your product needs to be significantly different from what’s already out there, and
you don’t ever want to be in a situation where you have to compete on price.
Competing on price equates to low profit margins, which as explained already is
never a good thing.
Instead, you need to compete on the product itself and the value that it adds, and not
on price. Doing so will give you much higher profit margins and allow your company to
grow much faster.
In order to do this your product needs to be differentiated in some way from any other
solutions already on the market. What makes your product better than any solutions currently
on the market?

#7 – Solves a Known Problem

Your product needs to solve a problem that people already know they have. It’s
challenging enough to educate people on why they need to purchase your solution to a
problem they have.
But it’s even harder to educate them about a problem that they don’t know they
already have. It will make it exponentially more difficult to sell your product if you have to
do both.
Having to make the customer aware that a problem even exists, means it’s something
they’ve never thought of, so it’s not going to be a priority for them.
That’s a really difficult sell. Instead, focus on products that solve problems people
already know they have.

#8 – Upfront Market Research

You always need to conduct considerable upfront market research before you fully
pursue a new product idea. This research is going to help you determine if you’re focusing on
the best product idea.
Let’s say you conduct some early market research using surveys, and your survey
responses come back as, “I hate this product,” or, “I would never buy it,” or, “I would pay $5
for it, but you’re asking me for $100?”.

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 Those results are clearly telling you that this product is not something worth pursuing.
Unfortunately, it’s almost never that easy. It may be easy to quickly prove an idea is bad, but
not so easy to prove that it is a good idea.
This is especially true with physical products where you are limited in how much
upfront research you can do since you don’t have a product yet to actually sell or show.
For example, your early market research surveys may show that people really like the
product idea, they say they need it, and they even say they will buy it when it becomes
available. However, if the product does become available these same people may never
actually purchase it.
This is because it’s one thing to say you like a product and would buy it, but it’s quite
another thing to put your hard-earned money down to purchase it. Someone who says “I love
the product, I would buy one,” could walk by it a hundred times in a retail store and never
buy one.
Just realize the limitations of any market data that doesn’t include money changing
hands. What people tell you they will do is a lot different than what they really will do,
especially when it comes to spending money.
But you should still make it priority to gather as much of this early feedback as
possible.
Market research is one of the fundamental advantages of having your own online audience. If
you don’t have an audience already, then start building one right away.
After garnering feedback from your audience, you can move on to the ultimate market
research, which is to start pre-selling your product. This is what happens with crowd funding
campaigns.
For crowdfunding most people focus on the money they will get, but the most
valuable part is the market feedback and proof you will get because people are actually
voting for your product with their money.

#9: No Dominating Competitors

Although some competition is definitely a good thing, too much is definitely a bad
thing. If you think you’re going to compete with the likes of Amazon or Apple, you’re just
going to get eaten for breakfast. That’s not something you want to ever try to pursue.
For example, I would not recommend that you try to come up with a product that
directly competes with an Amazon Echo. First of all, you will never be able to compete with
Amazon’s price because they have massive economies of scale.
Secondly, you can never compete with them from a branding or marketing standpoint.
Dominant companies like Amazon, Apple, and Microsoft have reputations for literally
destroying their competition.
As another example, I would never recommend that anyone develop a new
smartphone.
First of all, a smartphone is incredibly complicated and expensive to develop (Apple
spent millions developing the first iPhone).
Secondly, there’s so much competition already that it would be impossible for a new
startup company to ever stand out in such a crowded marketplace.

#10 – Existing Competition

You want to choose a product idea that actually has some competition. Wait a minute,
isn’t competition a bad thing? Shouldn’t I focus on developing a product that is completely
unlike anything else on the market?
The answer to both of those questions is no!

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 Bringing a completely unique product to market can be really challenging. Not only
do you have to convince people that this problem even exists and that they need it solved, but
you also have to convince them that your product is the best solution to the problem.
Also, with entirely new products, you don’t even know for sure that there is a market
for the product.
However, having a competing product that already sells well provides some proof that
there really is a market for your product. You can consider a competing product as upfront
proof that a market already exists for your product.

#11 – You Already Know the Market

Focus on a product for a market that you already know. This is ideally a market that
you have prior experience in. This can be prior experience selling to this market, or just
yourself being part of this market.
You don’t have to always limit yourself to your prior experience, but the markets that
you’ve worked in, ideally over many years, are going to be the ones that you know the best.
You’re already able to understand what the market really wants, versus trying to go
after an unknown market, like I did with Australia.

#12 – Easy to Reach Market

You want to choose a product that has an easily-reachable market.
Perhaps you may be thinking, “Everyone in the world can use my product. It doesn’t
matter their age, location, gender, occupation, or income, they all will want it!”.
Maybe you are thinking “if only 1% of people buy my product that will mean 100 million
units and $10 billion in revenue”. By the way, such a statement is a huge red flag for
investors, causing them to run away as fast as possible. So please don’t ever say something
like this. It sounds really great, and you’re likely seeing dollar signs in the billions! But the
truth is, a market that includes everyone will be really, really hard to reach.
It will always be easier to sell your product to 10% of the people in a group of
100,000,000 than to 1% of a group of 1,000,000 people.
You are better off focusing on a niche product, or at least somewhat of a niche
product, that has a market that you can reach. This is the reason for the expression “the riches
are in the niches”.

REFERENCES:

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 https://quizizz.com/admin/quiz/59931eb78356341100caf18d/identify-and-meet-a-
market-need#
https://study.sagepub.com/masterson4e/student-resources/chapter-9/multiple-choice-
quiz
https://tools.mheducation.ca/college/nickels3/student/olc/3ucn_mc_15.html
https://predictabledesigns.com/12-ways-to-select-the-best-product-idea-to-bring-to-
market/
https://simplicable.com/new/market-potential
https://www.thebalancesmb.com/identifying-opportunity-in-new-potential-markets-
4043634
https://www.imsmarketing.ie/business-strategy/so-what-is-the-potential-market-size-
for-your-product-or-service/
https://www.ipostjournal.com/potential-market/
https://study.com/academy/lesson/market-potential-of-a-product-definition-analysis-
example-quiz.html
https://www.proprofs.com/quiz-school/quizshow.php?title=ch-2-character--
market&q=6
https://www.proprofs.com/quiz-school/quizshow.php?title=ch-2-character--
market&q=41
https://quizizz.com/admin/quiz/5e198dab3e0e80001b47369b/products-services
https://www.entrepreneur.com/article/78778
Name: __________________________________________________ Date: _____________

Grade-Section: ___________________________________________ Score: ____________

Worksheet No. 2
Title of the Activity #1: TRULSE

Most Essential Learning Competency: Recognize a potential market

Select the best product or service that will meet the market need

K to 12 BEC CG: TLE_ICTAN11/12PC-Ia-1

Directions: Read each statement carefully. Write TRUE if the statement is

correct, FALSE if otherwise.

1. Entrepreneurs estimate demand for their products or services by

identifying their target market.
2. Collecting primary data can be expensive and time-consuming.
3. Customer’ and ‘consumer’ mean the same thing.
4. Segmenting your target market is usually not necessary because most
markets are small.

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 5. A market segment is made up of people who share common
characteristics.
6. A marketing strategy identifies customers that you can serve more
effectively than your competitors can, but it cannot help you determine
the size of your market. 

7.  Demographics describe a group of people in terms of their tastes,

opinions, personality traits and lifestyle habits. 
8. Services cannot be exported. 
9. Markets are product groupings.
10. Your analysis of competitors should include their prices, locations and
facilities.
11. In marketing, ‘place’ is another term for location.
12. A competitor's strengths should be viewed as threats to your business.
13.  The Internet has opened up new channels of distribution. 
14. In providing value to consumers, businesses must not focus on offering
quality goods and services but rather making the most money possible.
15. One of the primary functions of packaging is to protect goods in
transit. 
Name: __________________________________________________ Date: _____________

Grade-Section: ___________________________________________ Score: ____________

Worksheet No. 2
Title of the Activity #2: CHOOSE THE BEST

Most Essential Learning Competency: Recognize a potential market

Select the best product or service that will meet the market need

K to 12 BEC CG: TLE_ICTAN11/12PC-Ia-1

Directions: Read each statement carefully. Write the letter of the best
answer on the space provided before each number.

_____ 1. The customers you would most like to attract are referred to as your
A. competition C. market segments
B. target market D. demographics

_____ 2. Which of the following would most likely be the target market for a car dealer
selling moderately priced minivans?
A. single people with higher incomes C. middle-class families with children
B. people who are retired D. none of these

_____ 3. Most products and services appeal to 

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 A. a large portion of the population C. the demographic market
B. a market segment D. none of these

_____ 4. A description of the characteristics of the person or company that is likely to

purchase a product or service is a 
A. target market C. customer profile
B. psychographic profile D. demographic summary

_____ 5. Why is it generally harder for service industry managers to cope with peaks and
troughs in demand for their products?
A. Services are inconsistent.
B. There are no salespeople to help with forecasting.
C. Payment is usually made after the service has been provided.
D. Service products cannot usually be stored.

_____ 6. What are the typical characteristics of services?

A. Services confer benefits; are tangible; are time- and place-dependent; are
consistent; cannot be owned; and providers and consumers form part of the service.
B. Services confer no benefits; are intangible; are time- and place-dependent; are
inconsistent; cannot be owned.
C. Services confer ownership; are intangible; can be consumed at any time or place;
are inconsistent; and providers form part of the service.
D. Services confer benefits; are intangible; are time- and place-dependent; are
inconsistent; cannot be owned; and providers and consumers form part of the service
_____ 7. The actual cost of the product or service you are selling
A. Product B. Price C. Place D. Promotion

_____ 8. A good survey should

A. have easy to answer questions
B. be at least two pages’ long
C. explain in detail why you are conducting the survey
D. all of these

_____ 9. Which of the following is not a way to collect primary data?

A. Focus groups C. consumer opinion blogs
B. surveys D. observation

_____ 10. The activities a business uses to get consumers to buy their products or services.
A. Product B. Promotion C. Place D. Price

_____ 11. What is a distribution channel?

A. a group of distributors
B. a shop or other retail outlet
C. a product’s route through the supply chain
D. an electronic network

_____ 12. What is an alternative term for a distribution channel?

A. marketing channel C. supply chain
B. marketing chain D. place

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_____ 13. Rolex sells its watches through a number upmarket retail partners (e.g. department
stores and jewelers) with comparatively few stores. What is this type of distribution strategy
called?
A. selective distribution C. exclusive distribution
B. marketing distribution D. mass distribution

_____14. What are businesses that represent, and sell goods on behalf of, other businesses in
a specified market called?
A. resellers B. traders C. agents D. stockists

_____ 15. What is a warehouse club?

A. a storage facility rented out to small traders
B. a large store offering wholesale prices to members only
C. an online trading house
D. a social club for members of the distribution trade

_____ 16. The following are characteristics of a potential client EXCEPT

A. income B. demographic C. tastes D. location

_____ 17. The definition of marketing includes all but one of the following:
A. the need to earn a profit.
B. the process of determining customer wants and needs.
C. profitably providing customers goods and services that meet their needs.
D. an exchange between the organization and a customer.

_____ 18. Competitors should be analyzed concerning their _____.

A. prices C. locations
B. strengths and weaknesses D. all of these

_____ 19. A characteristic of a product or service is described as ...

A. a common quality that something has.
B. a special activity that something can do
C. something important, special or interesting that it has
D. all of the above

_____ 20. A competitive analysis does all of the following except

A. identify competitors
B. summarize the products and prices offered by competitors
C. identify threats from a competitor
D. research a competitor's business plan

_____ 21. It is the process of finding small but profitable market segments and designing
custom made products for them.
A. niche marketing
B. one to one marketing
C. industrial marketing
D. relationship marketing

_____ 22. All of the following are strategies designed to maintain customer loyalty except

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providing store specific credit cards
A. locating in a city center
B. having easy return policies
C. having more convenient hours than other businesses
D. All of the above

_____ 23. Social media marketing

A. helps a company get indirect feedback from customers
B. is a useful but expensive way to promote a product
C. is a good way for companies to increase exposure
D. has failed to catch on because not everyone uses social media

_____ 24. How to reeach potential customer?

A. innovate something that reaches a broader age range and with a more accessible
economic status for all of them
B. create good marketing technique
C. Good planning must be carried out and every point carried out very carefully.
D. all of the above

_____ 25. Which of the following is NOT a potential market data?

A. salary of the people
B. tourists
C. number of shops or companies
D. none of the above

_____ 26. 'A product' is described as ...

A. a thing produced by labour or effort.
B. a system that provides the public with something it needs.
C. the work or the quality of work done by somebody when servicing a customer.
D. all of the above

_____ 27. Which of the following does NOT define 'a service'?
A. A system that provides the public with something it needs.
B. A thing produced by labour or effort.
C. The work or the quality of work done by somebody when servicing a
customer.
D. all of the above

_____ 28. Which of the following is considered as 'a service'?

A. A fast food chain
B. An electrical appliance store
C. A farmers' market
D. A college or university

_____ 29. A feature of a product or service can be defined as ...

A. a common quality that something has.
B. a special activity that something can do

16
 C. something important, special or interesting that it has
D. none of the above

_____ 30. A function of a product or service refers to ...

A. a common quality that something has.
B. a special activity that something can do
C. something important, special or interesting that it has
D. all of the above

Name: __________________________________________________ Date: _____________

Grade-Section: ___________________________________________ Score: ____________

Worksheet No. 2
Title of the Activity #3: WHICH IS WHICH

Most Essential Learning Competency: Recognize a potential market

Select the best product or service that will meet the market need

K to 12 BEC CG: TLE_ICTAN11/12PC-Ia-1

Direction: Underline the correct word or term to make each statement

correct.

17
1. The customer can read online reviews, ask for the inspector’s credentials, as
well as before and after pictures of his previous work, but there’s no definite way
of evaluating the quality of a (product, item, service) until it’s rendered.

2. You should describe your products and services and discuss the market that
you are (introducing, aiming, targeting).

3. If you wish to interest investors, you need to emphasize the company's profit (potential,
chance, deal).

4. (Evaluate, Investigate, Eliminate) the strong and weak points of any firms in competition
with yours and look for marketplace opportunities.

5. You should examine customer (needs, pockets, returns) and the benefits of your products
and services.

6. (Producers, Consumers, Competitors) are individuals or companies who create valued

products and exchange these products with consumers for scarce resources (money).

7. The business' goals and competitive advantages can be described by (mission statement,
objectives, core values).
8. People who choose to spend resources on goods and services intended for personal use and
not for manufacture or resale are the (producers, consumers, competitors).
9. (Need, Economic utility, Want) is the amount of satisfaction a person gets from using a
product or service.

10. Since most products are countable, touchable, and visible, a (producer, retailer,
consumer) can assess its durability by examining it.

Name: __________________________________________________ Date: _____________

Grade-Section: ___________________________________________ Score: ____________

Worksheet No. 2
Title of the Activity #4: 1, 2, 3 OR 4

Most Essential Learning Competency: Recognize a potential market

Select the best product or service that will meet the market need

K to 12 BEC CG: TLE_ICTAN11/12PC-Ia-1

18
Directions: Read each statement carefully. Write 1 if both statements are true, 2 if both false,
3 if statement 1 is true but statement 2 is false, or 4 if statement 1 is false but statement 2 is
true. Write the correct answer on the space provided before each number. Rx2

Statement 1: To succeed as an entrepreneur, you must develop the ability

to select and offer the right products or services to your
customers in a competitive market.
1. Statement 2: There are unlimited opportunities for you to enter the
marketplace and compete effectively with a new product or
service that's better in some way than what's already being
offered by your competitors.
Statement 1: The most important thing you can do after deciding what to
sell is to think.
2.
Statement 2: The more you think about a product or service before you
bring it to market, the worst your decisions will be.
Statement 1: To make a product successful, you must be personally and
emotionally committed to its success.
3. Statement 2: For a product or service to succeed, it must be the right
product, being sold at the right time, to the right customer, in
the night market.
Statement 1: If you want to turn your business into an income-
generating machine, the last step is to choose the right
4. product or services to sell.
Statement 2: A company generating new product concepts and marketing
systems has to properly position the product to create
enthusiasm among its distributors.
Statement 1: Finding exciting new products should be a high priority for
every serious distributor looking to "catch the wave" of a new
5. product trend.
Statement 2: Products must be produced and sold by the right company,
and the right people.

ANSWER KEY:
Activity #1.

TRUE 1. FALSE 6. FALSE 11.

TRUE 2. FALSE 7. TRUE 12.
FALSE 3. FALSE 8. FALSE 13.
FALSE 4. FALSE 9. FALSE 14.
TRUE 5. TRUE 10. TRUE 15.

Activity #2.
1. B 11. C 21. A

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 2. C 12. A 22. A
3. B 13. A 23. C
4. C 14. C 24. D
5. D 15. B 25. D
6. D 16. A 26. A
7. B 17. C 27. B
8. A 18. D 28. C
9. C 19. A 29. C
10. B 20. D 30. B

Activity #3.
1. service 6. producers
2. Targeting 7. Objectives
3. Potential 8. Consumers
4. Evaluate 9. Economic utility
5. Needs 10. Consumer

Activity #4.

1
1.
2
2.
3
3.
4
4.
1
5.

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