LESSON 4

CONTINUATION OF THE
PARTS OF THE BUSINESS
PLAN
PREPARED BY:
MARIA GINA G. SERRANO
CONTENT STANDARD:
The learner demonstrates understanding of environment
and market in one’s locality/town.

PERFORMANCE STANDARD:
The learner independently creates a business vicinity map
reflective of potential market in one’s locality/town.

OBJECTIVE:

1. To determine who the customers are in terms of target

market, customer requirements and market sizes.

2. To recognize the importance of selecting and

describing the target market.
SUBJECT MATTER:

CHAPTER 4. TARGET MARKET

TOPIC:
1. Selection and Description.
2. Market Size Estimation
3. Methods of classifying customers
 A. Guide Questions:

1. Define Target Market?

2. What are the seven (7) basic questions in doing a

market research?

3. What are the methods used in classifying

customers?
 B. Analysis:
SEVEN (7) QUESTIONS IN PREPARING FOR
MARKET RESEARCH

• Why is the market research conducted?

• What are the scope & limitations of the market research

to be conducted?

• Which segment of the market must be studied?

• Who are the specific members of the target segment that

will participate in the research?
• When is the perfect time to conduct the research?

• Where is the best place to conduct the research?

• How should the research be conducted?

 STEPS IN MARKET SIZE
ESTIMATION
Market size - is the size of the arena where the
entrepreneur will play.

- the approximation of the number of customers (buyers

& sellers) in a particular market.

1. Potential market size estimation

1.1 Estimate the market space or market universe (The

approximate number of customers that will buy the
product or avail the service)
 Continuation: Two Things
To…..
1.2 ELIMINATE THE CUSTOMERS WHO ARE LIKELY
TO BUY THE PRODUCT OR AVAIL THE SERVICE.

1.3 ESTIMATE MARKET SHARE BY CONDUCTING

MARKET ASSESSMENT THROUGH SURVEYS,
CUSTOMER REVIEWS & OTHER DATA GATHERING
METHODS.

• THE ENTREPRENEUR CAN CALCULATE ITS MARKET

SHARE THROUGH ITS PRODUCTION CAPACITY.
 Continuation: Two things
To…
1.2 Eliminate the customers who are unlikely to buy the product or avail the
service.
1.3 Estimate the market assessment through surveys, customer reviews and
other data gathering methods.

2. Methods of Classifying Customers

1. Demographic Segmentation – known as socioeconomic segmentation

which is the process of grouping customers according to relevant
socioeconomic information.

1.1 Income range & social class – represents the purchasing power of the
market, or the ability to buy the entrepreneur’s product & services.
 Continuation: Two Things
To….
1.2 OCCUPATION – Sources of income of target
market so that the products & services can be better
positions.
1.3 GENDER & AGE GROUND – Life cycle & gender
influence buying habits.
1.4 RELIGION & ETHNICITY – These also affects the
way products and services are purchased such as food
choices, events & holidays, traditions & beliefs,
spending habits & conservativesness.
 Continuation: Two Things
To…
2. PSYCHOGRAPHICS SEGMENTATION – Is a process of
grouping customers according to their perceptions, way of
life, motivations and inclinations.
2.1 PERCEPTION - Is how an individual receives
external stimuli through his 5 senses.
2.2 THE CUSTOMERS WAY OF LIFE – Will give an idea of
what products & services Can best suit the daily problems
that they encounters.
2.3 MOTIVATION – Can either be physiological or
psychological.
 C. ABSTRACTION:

• The business proponents must be very precise about the

target customers. Target customers must be of sufficient
size, sufficient paying capacity, and have a sufficient
interest to purchase products being offered by the
enterprise. The main value proposition is the unique
selling proposition of the enterprise. Knowing where the
target market buy, how they buy, when they buy, where
they buy and what convinces them to buy. These
information should be used to justify the exact locations
and marketing channels to be employed by the enterprise.
 D. Assessment:

• Directions: Answer the following questions.

1. Who is your peer or reference group?

2. Does your group have a special interest that influences

what you do and buy?

3. Given your home or area of residence, how do your

environment surroundings affect what you do and buy?
THANK YOU !!!!!!!!