Republic of the Philippines

Department of Education
Region v
11
SCHOOLS DIVISION OF SORSOGON

ENTREPRENEURSHIP

Name of the Student__________________________________________________

Date: ___________________________________

LEARNING ACTIVITY SHEET 3

I. Learning Skills from the MELCs
 Recognize a potential market and analyze the market need.

II. Introductory Concept

In previous lessons, you have learned about the types of businesses and the competencies that
an entrepreneur must possess to be successful in his/ her chosen career. When talking about business
growth and success, an entrepreneur must study the potential market and conduct a market need
analysis.
III. Activities
Let Us Study

THE POTENTIAL MARKET

 The potential market is the part of the total population that has shown some level of interest in buying
a particular product or service. The potential market is also called the Total addressable market
(TAM) (MBA Skool Team, 2018).
 It 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).
 The 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.
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.

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). MBA Skool Team, 2018

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 hone 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 the company should not invest further because people will not 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. And 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 a company should do and how
much it should invest (MBA Skool Team, 2018).

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 aligns with their needs. 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).

Let Us Practice

Directions: Read and analyze the statements below about the “Market”. Determine whether the statement is
TRUE OR FALSE. Write TRUE if the statement is correct and write FALSE if otherwise. Write your answers
on a separate paper.
__________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. The 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.

Let Us Practice More

A. Directions: Read and analyze the given situations below. Identify whether this refers to existing customers,
prospects, or target market users. Write your answer on your answer sheets.

B. Directions: Read and analyze the statements below and identify whether this refers to the potential market,
available market, target market, or penetrated market. Write your answer on your answer sheets.

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

IV. Answer Key

Let Us Practice Let Us Practice More EVALUATION

1. True A. 1. F 2. I
2. False
1. Prospects 6. Prospects 3. A 4. J
3. True
2. Existing customer 7. Existing customers
4. True
3. Target market users 8. Prospects 5. B 6. C
5. True
4. Existing customer 9. Target market users
7. H 8. D
5. Prospects 10. Prospects
9. E 10. G
B.

1. Penetrated market 4. Target market

2. Available market 5. Penetrated market
3. Potential market

V. Reference
Department of Education SDO Manila. Entrepreneurship – Grade 12 Alternative Delivery Mode Quarter 1 –
Module 3: Recognize a potential market and analyze the market need.

Prepared by: Validated by:

MARICEL S. OLBES GRAZIELLE R. TAN

Gallanosa National High School Gallanosa National High School