Module 2-Recognizing Potential Market

In entrepreneurial process- The most difficult part of every tasks is where and how you start, you may
have all the resources needed to operate a new business, but it will never be easy to start one.
Entrepreneurial process – is step by step procedure in establishing any kind of business that
entrepreneurs has to undergo.
4 aspect of entrepreneurial process.
1. Opportunity Spotting and assessment
1. Sources of opportunity information:
a. Consumers
b. Other major sources
-glaring problems in the environment
-problems encountered by co-entrepreneurs
-new trends, processes and development
c. Other minor sources of opportunity
- feedback from distribution of business partners
-retailers
-wholesalers
-manufacturers
- technical people
2. entrepreneur toughest job
3. entrepreneurs should also assess if opportunity is aligned with their personal goals.
4. entrepreneurs should already think in advance how they will position the product and
The market.
Selling proposition- is the marketing strategy of informing customers about how ones own brand or
product is superior.
Value preposition – in marketing – is an innovation service or feature intended to make a company or
product attractive to the customers.
2. Developing Business Plan -Is a comprehensive paper that details the marketing, operational,
human resource, financial strategy, direction and tactics of the business.
3. Determining the capital needed
4. Running the business
All aspects of the business plan should be critically observed from Operation, Marketing sales,
Human resources, Finance, Strategy implementation
SCANNING THE MARKETING ENVIRONMENT:
Macroenvironment -refers to the environment which is indirect contact with company and affect
the routines activities of the business.
Microenvironment – defined as the nearby environment under which the firm operates
The 3S of opportunity spotting and assessment use by entrepreneurs:
1. S1-Seeking Opportunity- first step of the 3s the most difficult process of all due to the number
of options entrepreneurs will have to chose from.
2. S2- Screening the opportunity-process of continuously selecting the best opportunity.
3. S3- Seizing Opportunity- This is the pushing through with the choosen opportunity.

S1-

A.Macroenvironmental Sources:

1. STEEPLED – Sociocultural, Technological, Economic, Environmental, Political, Legal, Ethical,

Demographic, Factors. – This represents the general environment where the entrepreneurs can
identify business opportunities from and where the future business is about to operate.
2. Industry- This is the source of the current rends in the industry where the business is belong.
3. New discovery or knowledge- these are new trends that can be core business model of a new
business.
4. Futuristic opportunity – these are the projected new opportunities that can possibly affect the new
business while it is running.

B. Microenvironment Sources:

1. Consumer preferences, interest and perception

2. Competitors
3.Unexpected Opportunities from customers
 4. Talents, hobbies, skills and expertise
5.Location
METHODS OF GENERATING IDEAS:
1. Focused group discussion
2. Brainstorming similar to FGD
3. Internet Brainstorming
4. Problem inventory Analysis
FACTORS OF MACRO ENVIRONMENT
External Factors from the 8 environmental forces:
1. Sociocultural Factors -represent a general view of a locality’s traditions, customs, beliefs, norms and
perceptions.
- Health consciousness
- Education level
- Attitudes toward imported goods and services
- Attitude towards person life style
- Attitude towards product quality and customer service
- Attitude towards saving and investing
- Buying habits
- Religion, beliefs
2. Technological factors- these are composed of innovations of an existing technology or an invention
of a new one mostly applied science and technology.
- Basic infrastructure level
- Rate of technological change
- Spending on research and development
- Technology incentives
- Legislation regarding technology
- Communication infrastructure
- Access to newest technology
- Internet infrastructure and penetration
3. Economics factors- play a vital role in the scanning of marketing environment because economic
factors directly effect any business venture.
- Growth rates trade flows and patterns
- Inflation rates level of consumers’ disposable income
- Internet rates monetary policy
- Exchange rates fiscal policy
- Unemployment trends price fluctuations
- Labor costs stock market trends
- Stages of business cycles
4. Environmental and ecological factors- should be given much important in conducting a business
when the world has already suffered severely from human-induced calamities.
- Weather Climate change
- Laws regulating environment Air and Water pollution
- Recycling Waste management
- Attitude toward “green” products Endangered species
- Attitude toward and support for renewable energy
5. Political factors- are mostlky induced by government policies and administration which can have
strong effect in the business.
- Government stability and likely changes
- Bureaucracy
- Corruption level
- Tax policy
- Freedom of press
- Rule of law
- Government effectiveness
- Political rights
6.Legal factors- related with political factors
- Anti-trust law data protection law
- Discrimination Law Health and safety law
- Copyright, patents/intellectual property rights
 - Consumer protection law Employment law
7.Ethical Factors- will serve as an entrepreneurs guide on how to be ethical in running the business.
- Ethical advertising and sales practice
- Accepted accounting, management and marketing standards
- Attitude toward counterfeiting and breaking patents
- Attitude toward development and well-being of employees.

8. Demographic factors- these are the caharacteristics of the people in the target market.

- Population growth rate

- Age distribution and life expectancy rates
- Gender distribution
- Social classes
- Family size and structure
- Minorities
S2
Opportunity screening
Risk appetite- refers to the entrepreneurs tolerance of business risks.
S3
Seizing Opportunity
Innovation – is the process of positively improving an existing product or services. It is a key driver for
economic growth.