3RD Week Entrep

REPUBLIC OF THE PHILIPPINES
DEPARTMENT OF EDUCATION
DIVISION OF SURIGAO DEL SUR
PURISIMA DIOCESAN SCHOOL, INC.
Purisima, Tago, Surigao del Sur
ENTREPRENEURSHIP (3RD Distribution)

Subject Teacher: Christian C. de Guzman, LPT
Lesson 4 The Potential Market and the Market Need
The Potential Market

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).
1. 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).
2. Market potential is the total demand for a product in a given business environment (Bhasin, H., 2018).
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 them?
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.
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.
Purisima, Tago, Surigao del Sur 8302 0928-712-3893 / 0951-814-5379 OFFICIAL Purisima Diocesan School purisimaschool@yahoo.com
 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 market:
Available Market MBA Skool Team,

2018
 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).
Penetrated Market
 A 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
o 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 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)
Your market consists of (Stull, C., Myers, P.& Scott D.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?
ASSESSMENT
Name: _________________________________________________________ Date: _________________________
Grade & Section: ________________________________________________ Score: _________________________
I. 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.
II. 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 order
laptop for school to comply with the requirements in
requirements. 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 vitamin C
worker, needs to boost her immune system.
transportation.
Activity 3. MAKE MEANING- INTERNET ASSSISTED ACTIVITY
III. 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
5. Marketing strategies
ENTREPRENEURSHIP 12 (4th Distribution)

Subject Teacher: Christian C. de Guzman, LPT
Lesson 4 The Possible Product/s or Service/s that will

Meet the Need
As would-be entrepreneurs, there is a need to find the right products or services for your target market. The
product or service should deliver superior customer value (Claessens, M., 2015).
Concepts about Product and Service
A product can be defined as anything that we can offer to a market for attention, acquisition, use or
consumption that could satisfy a need or want. However, the definition of product does not only involve tangible goods
such as a car, a fridge or a phone. The definition is extended to include intangible objects as well, because they can
be offered to a market. Therefore, the broad definition of product includes services, events, persons, places,
organisations or even ideas (Claessens, M., 2015).
Services are special form of product which consists of activities, benefits or satisfactions offered for sale that
are intangible and do not result in the ownership of anything. A service can thus include banking, airline travel,
communication services, hotel services and so on (Claessens, M., 2015).
A product is a tangible item that is put on the market for acquisition, attention, or consumption, while a service is
an intangible item, which arises from the output of one or more individuals (https://corporatefinanceinstitute.com).
Examples:
1. When a consumer buys a car, the product comes with a lot of other service responsibilities, such as
tune-up and maintenance (https://corporatefinanceinstitute.com).
2. A laptop buyer now buys a bundle of service benefits in addition to the tangible components of the laptop.
Specific Examples of products and services (https://www.archives.gov)
Products
new prints of motion picture film elementsprints for exhibit purposes
 reference copies on DVD/CDs, books, magazines for the reading rooms or other clients
 Cars, tables and chairs, etc.
Services
 consulting with clients on appropriate products for specific purposes
 providing advice on risk assessment and priority setting
 working on standards committees
 conducting training and other educational outreach
The Difference of Product and Service (https://accountlearning.com)

Product Service
1. It is tangible. It is intangible.
It is very difficult to attain quality
2. Quality standards can be attained. standards.
3. It may be an asset sometimes,. e.g., It involves expenditure without any
fridge, television set, etc. tangible return benefit.
4. Physical possession is possible. Physical possession is not possible.
5. It can be stored. It cannot be stored.
6. It can be transported. It cannot be transported.
7. The producer and the seller may be The producer of service is the seller too, e.g.,
different persons. medical and legal services.
8. Assembling is very important. Assembling has no relevance at all.
Skill of the service provider is the deciding factor
9. Skill of the seller alone cannot in most cases, e.g., legal, catering and medical
determine sale. services.
Production and distribution of service will have to
10. Production and distribution need not take be done simultaneously, e.g., provision of
place simultaneously. electricity.
11. Packing plays a crucial role in the It has no relevance in the marketing of
marketing of any product. service.
12. Both Brand name and Trade name are
important in the marketing of any product. Brand mark and Trade name are important in
the marketing of services.
13. Labelling is an integral part of
marketing. It is required as per law. It has no relevance.
Identifying and Meeting Customer Needs

Customer needs are the named and unnamed needs of customers when they come in contact with the different
business establishments or when they search for the solutions which businesses provide
(https://www.c o n d u c t o r . c o m / ) . In addition, providing superior customer service means meeting customers’
needs by providing them with the products and services they want or by providing effective solutions to their
problems (https://simplifytraining.com/). Similarly, innovation comes from identifying customers’ needs and providing
solutions that meet those needs (Sauro, J.).
Why “Identifying Customer Needs” Matters (https://simplifytraining.com/)
1. Correctly identifying customers’ needs is essential for ensuring customer

satisfaction and loyalty.
2. Customers have unique needs.
3. Often, customers either aren’t clear about what they need or they don’t
really know what they want.
4. Identifying clients’ needs creates satisfied customers, and satisfied customers are less likely to have
reason to enter into disputes with the organization or contemplate legal action.
Key Points (https://simplifytraining.com/)

1. To ensure customer satisfaction, entrepreneurs must correctly identify
customers’ needs.
2. To identify needs, entrepreneurs must both listen and ask the right questions.
3. After identifying needs, always check for additional or related needs.
4. As an entrepreneur, use your knowledge and experience to identify and present the right products,
services, and solutions to meet your customers’ needs.
How to Meet the Needs of Customers (https://www.conductor.com/)

1. Identify what the customers need through keyword research, focus groups, or social listening.
2. Distribute the information to relevant stakeholders in the organization.
3. Craft product features or create content that speaks to the customer’s
needs.
4. Collect customer feedback in order to meet their expectations.
ASSESSMENT
Name: _________________________________________________________ Date: _________________________
Grade & Section: ________________________________________________ Score: _________________________
I. Read and analyze the statements below about “Product or Service”. 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. Products do not carry an element of service.
2. A service is the result of the application of skills and expertise towards an identified
need.
3. A service isn't something you can try out before you pay for it.
4. All products are countable, touchable, and visible, a consumer can assess its
durability by examining it.
5. Products are tangible and discernible items that the organization produces.
6. Products and services can both be perishable.
7. Service is associated with physical items.
8. A product is an offering that derives value from intangible elements.
9. A product may be capable of being reused for a certain time.
10. Service has no connection with the sale of products.
II. Column A contains list of products and Column B contains list of services. Match as to which
service in Column B is related to the product in Column A. Write the letter of your answer in
the space provided.
Answ Column A: Products Column B: Services

er 1. Car A. Usability and durability
2. Xerox machine B. Repairs and maintenance
3. Smart phone C. Leasing or pay per copy
4. Credit card D. Entertainment
5. Organic products E. Consistent quality
6. Television F. Bills payment
7. Accessories G. Healthy lifestyle
8. Books H. Boost immune system
9. Vitamins I. Accuracy of information
10.Basic goods J. Fashionable designs

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REPUBLIC OF THE PHILIPPINES

ENTREPRENEURSHIP (3RD Distribution)

The Potential Market

The Importance of Potential Markets (Lake, L., 2019)

 Potential markets are an important part of a business's future growth.

 What other products do my customers need now?

Reaching Your Potential Market (Lake, L., 2019)

Available Market MBA Skool Team,

Define the Market Need for Your New Business

Why is it important to clearly define market needs?

1. Students need to 6. Arlene, a student of a public

Activity 3. MAKE MEANING- INTERNET ASSSISTED ACTIVITY

ENTREPRENEURSHIP 12 (4th Distribution)

Lesson 4 The Possible Product/s or Service/s that will

The Difference of Product and Service (https://accountlearning.com)

Identifying and Meeting Customer Needs

1. Correctly identifying customers’ needs is essential for ensuring customer

Key Points (https://simplifytraining.com/)

How to Meet the Needs of Customers (https://www.conductor.com/)

Answ Column A: Products Column B: Services

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