ENTREPRENEURSHIP

https://search.yahoo.com/

Quarter 1 Week 3 Module 3

Learning Competency :
Recognize a potential market
and analyze the market need
 Learning Module for Entrepreneurship

HOW TO USE THE MODULE?

As you start studying th e module, I want you to set aside other task/s that
may disturb you while enjoying the lessons. Read the instructions below to
successfully enjoy the objectives of this kit. Have fun!

Follow carefully all the contents and instructions indicated in every page of
the module.
Write in your notebook the concepts about the lessons.
Writing enhances learning, which is important to develop and keep in mind.
Perform all the provided activities in the module.
Let your facilitator/guardian assess your answers using

the answer key card.

Analyze conceptually the post-test and apply what you have learned.
Enjoy studying!

PARTS OF THE MODULE

Expectations - This will give you an idea of the skills or competencies

you are expected to learn in the module.
Pre-test - This will measure your prior knowledge and the concepts you
are to master all throughout the module.

Looking Back to your Lesson - This section will measure what

competencies and skills you have learned from the previous lesson.

Brief Introduction- This section will give you an overview of the

module.

Activities - These are sets of activities you will perform with a partner.

Remember - This section summarizes the concepts and applications of

the module.

Check your Understanding - It will verify the concepts and

competencies you learned from the lesson.

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Post-test - This will measure how much you have learned from the
entire module

Lesson The Potential Market and the Market

4 Need

EXPECTATIONS
After going through the module, you are expected to:
recognize a potential market and analyze the market need.

You may start your journey in learning about the potential

market and the market need . Are you excited to answer the
Pre-test? Smile and Enj oy!

PRE-TEST
DIRECTIONS: To check your prior knowledge about the topic, please analyze the
pictures below and list down at least three (3) potential markets that entrepreneurs
should consider during this COVID -19 pandemic and indicate their needs. Write your
answer in the space provided.

https://images.search.yahoo.com/
Potential Market Market Need

1. 1.
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2. 2.

3. 3.

You have finished answering the pre-test. You may request your
facilitator/guardian to check your work. Congratulations and keep on
learning!
LOOKING BACK TO YOUR LESSON
As we go further, let us try to recall the competencies in Entrepreneurship.
o Competencies such as risk seeking, assertiveness and vision are considered
typical of a successful entrepreneur (www.ideasforleaders.com).

o Specific techniques and habits must be practiced and developed by all would-be
entrepreneurs. Aside from business competencies, entrepreneurs need
interpersonal and self-leadership skills too; however, these are often overlooked.
Entrepreneurial behavior’ can be learned and developed
(www.ideasforleaders.com).

o If you’re an aspiring entrepreneur, there are different career paths you can take
to turn your dream into a reality. Which path you choose will depend on your
experience, skills, finances, and flexibility, as well as your goals for the future
(Doyle, A., 2020).

Please answer the questions below. Good Luck!

Multiple Choice. Write the letter of the correct answer that best complete the sentence
in the space provided.

______1. All are core competencies in Entrepreneurship, except:

A. basic bookkeeping/ accounting skills B. communication skills
C. building relations with customer D. building competitive advantage

______2. Which of the following is not a business competency? This competency covers
the outcomes required to build, _____ and grow a micro/small-scale enterprise - like
developing and maintaining small-scale business, establish customer base, and manage
business finances.
A. Establish customer service B. Manage finances
C. Preparing business letters D. Monitoring operations

______3. Which is not a goal of entrepreneurial competency?

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A. Expanding the enterprise B. Expanding markets and clientele C.

Developing individuals and teams D. Enhancing one’s business skill

______4. All are important aspects of Entrepreneurship as a course, except: A.

Discussion on economic issues and concerns.
B. Explanation of key concepts of competencies in Entrepreneurship.
C. Discussion on the relevance of the course.
D. Exploration of career opportunities.

_______5. Which of the following does not cover a high-performing enterprise?

A. Build and develop the enterprise to be more competitive within a changing
business environment.
B. Creating gaps among employees.
C. Responding to consumers’ demand.
D. Maintaining product quality and accessibility.

BRIEF INTRODUCTION
The Potential Market

1. 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).
2. 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).
3. 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.

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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
each other?
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.
• 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.
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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:

MBA Skool Team, 2018

Available Market
• 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).
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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 A 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?

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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?

ACTIVITIES

Activity 1. 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.

Activity 2. 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.

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

buy a tablet/ school, needs mobile data in
laptop for school order to comply with the
requirements. requirements in 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 9. Jeep drivers need to modify
center agent, needs a their jeeps for public
Wi-Fi. transportation.
5. Karlo, a factory 10. Ella needs to buy her
worker, needs vitamin C to boost her immune
transportation. system.

Activity 3. MAKE MEANING- INTERNET ASSSISTED ACTIVITY

DIRECTIONS: 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_________________________________________________________

REMEMBER
• 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).
• Available Market are prospects who are willing and capable (have sufficient
resources) buyers, and have access to a particular market or service
(www.businessdictionary.com).
• 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 (Kenton, W., 2019).
• Penetrated Market is a set of customers or clients who are already using a
particular product or service (www.businessdictionary.com).
• Need is a motivating force that compels action for its satisfaction. Needs range
from basic survival needs (common to all human beings) satisfied by necessities,

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to cultural, intellectual, and social needs (varying from place to place and age
group to age group) satisfied by necessaries
(www.businessdictionary.com).
• A Market is a place where two parties can gather to facilitate the exchange of
goods and services (Kenton, W. & Boyle, M., 2020).
• Existing customers are people who have already purchased your product.
• Prospects are people who have not yet purchased your product but are
considering it.
• Target market users are people in your target market who are not currently
looking for a solution.

CHECK YOUR UNDERSTANDING

Considering the ways to define your market, evaluate the situations below using 1
to 5 rating scale, 5 as the highest and 1 as the lowest. Justify your answer in 1 to 2
sentences only. Write your answer in the space provided.

Situations Rating Justification

To produce face masks
and PPEs.
To open on-line
business for fashion
accessories.
To open a massage
center.
To open a computer
shop.
To open a carinderia

POST-TEST

Identification. Read and analyze the statements below and identify whether this refers
to potential market, available market, target market, or penetrated market. Write
your answer in the space provided.

_________1. Active consumers of a product.

_________2. People who are both willing and capable of buying a particular product or
service in a particular market.
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_________3. It is the part of the total population that has shown some level of interest in
buying a particular product or service.
_________4. It includes specific customers to whom a company directs its marketing
efforts.
_________5. Customers or clients who are already using a particular product or service.

MATCHING TYPE. Match the definitions in Column A with the word/phrase in Column
B. Write your answer in the space provided.

Column A Column B
1. It is a company’s marketing goals and objectives combined A. Market
into a single comprehensive plan.
2. Refers to a person or organization that uses a commodity or B. Target Market
service.
3. This is an area or arena in which commercial dealings are C. Potential Market
conducted.
4. This is used to give a general idea of the size of a company D. Need
in relation to its market and its competitors.
5. This is one part of the total market for a good or service. E. Demographic group
6. It is also called Total addressable market (TAM). F. Market Strategy
7. A person or business that purchases a commodity or G. Market size
service.
8. Circumstances in which something is necessary, or that H. Customers
require some course of action; necessity.
9. The study of the characteristics of human populations, I. Consumers
such as size, growth, density, distribution, and vital
statistics.
10. The number of buyers and sellers in a particular market. J. Market share

REFLECTIVE LEARNING
If you’re thinking about starting a business, most likely you have dreamed of one
that involves your interests. But, what does the market need or want? Do you know who
is buying what and how much, or how, where and why they are buying those goods or
services already?

Determining the marketability of your start-up business is typically done in the

context of creating a business plan and performing an analysis of your competition. It
requires research into areas of marketability.

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Congratulations! You are almost done in this module. Please write your idea
on the situation below.

As would-be Entrepreneur, you are tasked to identify your dreamed business,

one that involves your interests. Indicate who are your potential market, target market,
available market and/or penetrated market. Write your answer in the space provided.
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
___________________________________________________________________________________

E-SITES
To further explore the concept learned today, please watch the video about
“Understanding Customers need” @www.youtube.com

REFERENCES
Websites

1. Available Market. Retrieved from:

http://www.businessdictionary.com/ definition/available-market.html
2. Bhasin, H. (2018). How to determine Market potential for any product or service?
Retrieved from: https://www.marketing91.com/determine-marketpotential/
3. Definition of need. Retrieved from: http://www.businessdictionary.com/
definition/need.html
4. How to Define Market Needs to Align Content Effectively. Retrieved from:
https://www.aberdeen.com/cmo-essentials/define-market-needs-aligncontent-
effectively/
5. Kenton, W. (2019). Target Market. Retrieved from:
https://www.investopedia.com/terms/t/target-market.asp
6. Lake, L., (2019). The definition and importance of potential markets. Retrieved
from: https://www.thebalancesmb.com/identifying-opportunity-in-
newpotential-markets-4043634
7. Lancaster SCORE (2010). Define the Market Need for Your New Business.
Retrieved from: https://scorelancaster.wordpress.com/2010/01/18/define-
themarket-need-for-your-new-business/
8. MBA Skool Team, (2020). Available Market. Retrieved
from: https://www.mbaskool.com/business-concepts/marketing-and-
strategyterms/11747-available-market.html
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9. Penetrated Market. Retrieved from: http://www.businessdictionary.com/

definition/penetrated-market.html

Acknowledgement
Writers: Farida F. Tallud, DBM
Mark Vincent B. Emit, PhD

Editors: Isabel A. Gumaru, DBA

Clarabelle V. Dalimit, DEM

Evaluator: Ellaine I. Dela Cruz, DBA

Validators & Reviewer s: Remylinda T. Soriano, EPS, Math

Angelita Z. Modesto, PSDS
George B. Borromeo, PSDS

Management Team: Maria Magdalena M. Lim-Schools Division

Superintendent-Manila, Aida H. Rondilla-Chief Education Supervisor
Lucky S. Carpio-EPS and Lady Hannah C Gillo, Librarian II-LRMDS

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