Session 1 The Entrepreneur and His Markets: Module in The Entrepreneurial Mind

1
Module 2
Session 1
THE ENTREPRENEUR AND HIS MARKETS
Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

August 2020 College of Business, Economics, and Management – Entrepreneurship Department
2
What Is This Session About?
This Session extends your knowledge on Marketing. If you regard marketing as an appropriate
instrument for the development of your business, you will learn in this module how to conduct market
analysis, how to implement product, price and distribution policies and how to check if your marketing
measures are working.
What Will You Learn?
Towards the end of this Session, you will not only appreciate the concepts of marketing but also
apply the principles, approaches, and techniques in your enterprise. Moreover, you will also learn how to
design a product or service that matches the needs of our customers, analyze customers and competitors,
make competitor profile matrix, conduct industry and market analyses, and craft a simple marketing plan
for your enterprise.
What Do You Already Know?
Before we start this Session, let’s ponder on this dictum by Steve Jobs “When you first start off
trying to solve a problem, the first solutions you come up with are very complex, and most people stop
there. But if you keep going, and live with
the problem and peel more layers of the
onion off, you can oftentimes arrive at some
very elegant and simple solutions. Most
people just don’t put in the time or energy to
get there. We believe that customers are
smart, and wants objects which are well
thought through.” Relate this to your
previous lessons.
Source: www.geckoandfly/28-Memorable-
Quotes-by-Steven-Paul-'Steve'-Jobs
Let’s Reflect
So, let us get into its context and reflect with the following guides questions:
1. What specific topic/s in your previous modules can you best associate the quote by Steve Jobs?

3
2. What quality/ies of an entrepreneur that make/s him far different from others?
3. How important creativity is in a business enterprise? Cite an example.
Let’s Study
We all, consciously or unconsciously know about marketing, or have perhaps played part in the
marketing system. Marketing concerns all of us in our day to day decisions and activities of our lives.
When you enter a shop, an arcade or supermarket, you normally look at the various products on display,
compare and evaluate these products, look at their prices, etc. before you take a decision to purchase them.
At home, in a taxi or your car, you normally hear commercial adverts of various firms, products and
services. At times you buy something simply because you have listened to an advert convincing you that
it is worth buying. Marketing is important in a business because it helps people know what you are selling
and where they can find you if they want your product. Without it, your business cannot succeed.
As an entrepreneur, you need to appreciate that this is exactly what other customers do or go
through before they take a decision to buy your product. You therefore need to manage the various
marketing activities if your business is to succeed. As Kotler, one of the leading scholars of marketing put
it; the entrepreneur has to do a good job of identifying consumer needs, developing good products and
prices that fit the consumer needs, promoting and distributing the goods effectively. The entrepreneur
should know and understand the customer so well that the product or service fits.
WHAT IS MARKETING?
There has been a proliferation of definitions of marketing. Some scholars look at it as a process,
others as a concept or philosophy of business, while others look at it as an orientation.
Some of the common definitions are given below:
✓ “Marketing is a social and managerial process by which individuals get what they need and
want through creating and exchanging products and value”
✓ “Marketing is the management process that identifies, anticipates and supplies customer
requirements efficiently and profitably”
✓ “Marketing is the all-embracing function that links the business with customer needs and wants
in order to get the right product to the right place at the right time”
✓ “Marketing is the performance of business activities that direct the flow of goods and services
from producer to consumer or user”

4
From a business perspective, marketing simply means ascertaining what a consumer wants and
providing it to the consumer at a profit. It is a process by which people who have business (entrepreneurs)
stimulate the sale and distribution of their products to somebody else (the customer) so as to make a profit.
For marketing to take place, there must be a buyer and a seller, and both should be willing to exchange
something for value in return.
Please take note that: Marketing is not selling or advertising or distribution or retailing etc. These
are just marketing activities that bring a buyer and seller together, but not sufficient to define marketing.
Marketing goes beyond that to the identification of customer needs and running your business in a way that
will produce what the customers need.
From the various definitions of marketing, we can draw the following conclusions about marketing
as follows:
✓ Marketing involves meeting the needs and wants of customers (and consumers).
✓ Marketing involves exchange that is to say marketing is an exchange process
✓ Marketing creates time, place and possession utilities, that is to say marketing ensures that the
customer gets what he/she needs at the right time in the right place, and creates ownership.
✓ Marketing is a business-wide function. It is a responsibility of all the other functional areas of
business. It doesn’t operate alone from other business activities.
✓ Marketing is about understanding customers and finding ways to provide products or services
which customers demand.
WHAT MARKETING INVOLVES?
What really does Marketing involve? Take these points:

• Ascertain what consumers want and provide it to them at a profit!
• Meet the needs and wants of customers!
• Create a good exchange environment!
• Creates time, place and possession utilities!
Customer Needs and Wants
A human need is a state of felt derivation. It is a basic requirement that an individual wishes to
satisfy. Needs are a basic part of human life, and are therefore not created by businesses. Businesses only
try to influence demand by designing products and services that are attractive, affordable, and available and
work well for the customer.

5
A want on the other hand is a desire for a specific product or service to satisfy the underlying need.
These are usually shaped by social and culture forces, individual personality as well as the marketing
activities of the business such as advertising.
For example, when people are hungry, they need to eat. What they want to eat will vary. For
example one may need food, but want to eat burger, whereas the other may want spaghetti. In this case the
two have the same need which is food, but different wants.
The customer needs and wants are always changing. The entrepreneur should therefore pay
continuous attention to the changing needs and wants, and interpret them before undertaking any steps.
Customers and Consumers
A customer is the one who purchases and pays for a product or service, whereas a consumer is the
ultimate user of the product or service. Note that the consumer may not have paid for the product. For
example, when you sell 20 trays of eggs to a shop owner, this person becomes your customer, but the
consumer could be the one that ultimately buys or uses the eggs for final consumption. The consumer gets
the ultimate utility out of the product or service.
The entrepreneur should therefore direct their marketing efforts to both the consumer and the
customer. The entrepreneur has to understand both the needs of the customer and those of the consumer.
Exchange
Marketing occurs when people decide to satisfy needs and wants through exchange. Kotler and
Armstrong (1995) define exchange as the act of obtaining a desired object from someone by offering
something in return.
Demand(s)
When customer wants are backed up by buying power, they become demands. Customers normally
have endless wants, whereas the resources to satisfy these wants are limited. In this case, customers have
to prioritize those products that they are willing and able to pay for. To choose among the many products,
consumers base their buying decisions on their perceptions of a products value. Therefore customer
demand is a want for a specific product supported by the ability and willingness to pay for it. To stimulate
demand, entrepreneurs have to not only make products that consumers want, but they also have to make
them affordable to a sufficient number.

6
BUILDING A MARKETING ORIENTED BUSINESS
Firms that succeed today are the ones that have built a marketing orientation. The marketing
concept is a marketing philosophy that believes that achieving organizational goals depends on determining
the needs and wants of target markets and delivering the desired satisfaction more effectively and efficiently
than competitors do (Kotler and Armstrong, 1995). The fundamental idea of this concept is that firms
survive and prosper through meeting the needs and wants of customers. The marketing concept is about
matching a company’s capabilities with customer wants. A firm that adopts the marketing concept accepts
the needs of potential customers as the basis for its operation. Success is dependent on satisfying customer
needs.
The marketing concept/orientation has the following implications:
✓ The business conceives its mission as that of satisfying the identified needs of a certain target
market
✓ The business recognizes that to satisfy these needs, there must be an undertaking to identify
and learn these needs and how they will be satisfied
✓ The business recognizes that consumers have varying tastes, incomes and habits, and that there
are various competitors attempting to satisfy the consumer needs. Therefore the organization
must coherently plan and implement those activities that will enable it sell to the target market.
Marketing starts before production. It starts by determining consumer needs and wants. Thus a
product acceptable to the consumer must be designed and it does not end with sales but continues after sales
to ensure consumer satisfaction
Kindly take note that in a business that is marketing oriented, the following activities/tasks should
be well developed:
1. Identify the markets you want or intend to serve: This involves establishing the potential customers of
the business and subsequently identifying those customers that the business wants to do business with.
The choice of the target markets normally depends on the purchasing power of the consumers, as well
as the ability of the business to satisfy their needs. You can look at the markets in terms of demography
(e.g. age, gender etc.), in terms of geographical settings or any other. Note: You can do this through a
simple market survey using a simple questionnaire or by making formal and informal inquiries from
the people around.
2. Identify the needs of those customers: This can also be done through simple market surveys. The
business has to collect information on the current and potential needs of customers in the market they
have chosen to supply.

7
3. Develop products or product concepts to meet the needs of the customers: This is done through research
and development and production activities. Businesses must develop products and services that meet
needs and wants of the customers so as to attract them.
4. Take decision on other marketing mix elements. Having identified the target markets, their needs and
developed relevant products, then you determine the price, how you are to promote the products and
the distribution mechanisms and outlets for your product. These activities (i.e. pricing, promotion and
distribution) will help to attach/offer value to the customers, to communicate the product (i.e. Informing
customers/consumers of the existence of the product and persuading them to buy it) and to make it
accessible and convenient (i.e. at the right time and in the right place). Note: For small businesses, the
most ideal and cost effective way to promote a product is by exploring the word of mouth. The other
promotional tools like advertising will eat deep into the budget, and yet may not even be effective. To
achieve a positive word of mouth, the entrepreneur must ensure that his/her customers are
happy/satisfied so that they tell others how good the business and its products are.
5. Put in place means to continuously monitor your Market. The objective of marketing is to attract
customers and retain them by building a relationship. For this to be achieved, the business needs to get
regular feedback from the market on customer satisfaction. This will help you adjust your product and
the other marketing mix elements to suit the customer needs, as well as to fit within the competitive
environmental changes. Note: Continuous market monitoring can be done through conducting
customer satisfaction surveys to get feedback regarding customer satisfaction and what they think
should be done to improve on the product and the way they are being served.
DO ALL BUSINESSES ADOPT THE MARKETING CONCEPT?
While the marketing concept is the ideal, not all firms in the real world adopt and follow it. Kotler
attempts to give alternatives to the marketing concept. He brings out the following concepts, in addition to
the marketing concept:
✓ The production concept
✓ The product concept
✓ The selling concept
✓ The societal marketing concept
He defines and differentiates the concepts for purposes of bringing out what is today meant by
marketing and what different organizations actually do when they conduct their marketing activity. Of
recent, an additional view point, the green marketing concept has been introduced. This concept looks like
a refinement of the societal concept.

8
The Production Orientation/Concept: A production oriented business is said to be mainly concerned with
making as many units as possible. Management of the business assumes that consumers will buy those
products which are available and well-priced. They will therefore concentrate on availing the product. By
concentrating on producing maximum volumes, such a business aims to maximize profitability by
exploiting economies of scale. The need to increase output is a priority as compared to the needs of a
customer. This approach is most effective when a business operates in very high growth markets or where
the potential of economies of scale is significant. The concept of mass production springs from this view.
The more the production, the better the company is at producing and the lower the price. The production
concept has the following implications:
▪ Consumers will buy the product if it is available
▪ Consumers buying decision is influenced by price
▪ The business concentrates on producing
▪ The business concentrates on improving the production process and lowering the price
▪ The organization needs no effort to sale.
The Product Orientation/Concept: This concept considers a business that is obsessed with its own products
(perhaps even arrogant about how good they are). Management of a business assumes that customers are
aware about the existence of the products, and simply buy those products that are reasonably priced. The
product concept has the following implications:
▪ The consumers know the different brands of products on the market.
▪ Consumers’ buying decisions are influenced by the product, quality features, performance and
price.
▪ The business concentrates on selling whatever has been produced without caring for the
requirements of the consumer.
▪ The organization does not make any effort to identify the needs of the consumer but simply
concentrates on producing good quality and fairly priced products.
▪ The process of marketing begins after goods have been produced and ends with their sale.
However, by failing to consider changing technological developments or subtle changes in
consumer tastes, a product oriented business may find that its products start to lose ground to competitors.
The Selling Concept/Orientation: Some businesses see their main problem as selling more of what they
already have available. This concept assumes that consumers buy, but they do not buy enough and will
buy more if influenced by some selling and promotion efforts. The business may therefore be expected to

9
make full use of selling, pricing, promotion and distribution skills. The selling concept has the following
implications:
▪ Consumers buy, but not enough
▪ Consumers can be induced to buy by some sales effort
▪ The organization is aware of these conditions and its main task is to induce the consumer to buy
more of its product
▪ The process of marketing here also begins after production
The Societal Marketing Concept: This concept emerged out of the weaknesses of the marketing concept.
The main issues raised about the marketing concept include:
▪ Are businesses practicing what they were saying? Do they really identify consumer needs before
production and also look beyond the sale?
▪ Are organizations looking into the needs of society in their bid to satisfy customers? Is public
interest being safeguarded?
These are some of the questions that led to Kotler’s societal marketing concept under which, he
argued that a business should not only be concerned with consumer satisfaction, but should keep in mind
public interests and welfare. They should have society’s interest in mind.
The Green Marketing Concept: This concept has emerged due to a group of people with a specific concern
for the environment who have turned their concern into a crusade for the preservation of nature. This is
called the green movement. They are arguing for preservation of nature, maintaining a green world. Their
argument is that while the company can clean up the mess that they produce in their wake and be responsive
to societal needs, which is not sufficient. The movement thinks that businesses should go beyond that and
ensure that they should not deplete the resources that create the necessary ecological balance to maintain
the various gifts of nature to mankind. Businesses therefore need to protect the environment by doing an
environmental impact study of the things they do or intend to do. For example an entrepreneur who intends
to utilize wetlands for entrepreneurial activities should think twice.
THE PRODUCT STRATEGY

Here are some pointers that you need to know on Product Strategy:
1. Design a product that is either:
✓ Unique
✓ High quality
✓ Low-priced
✓ Satisfies other customers’ needs!

10
2. Shift from one product to another, or modify your products to capture better marketing
opportunities.
3. Keep quality of product/service to acceptable standards or as per the needs of the customers.
4. Test your product (and its price) on the market before you launch it.
How to Achieve Product Quality?
✓ Understand the customer’s perception of quality

✓ Work on the mindset towards a quality orientation
✓ Use raw material with good quality
✓ Use improved and efficient production process/technology
✓ Proper finishing
✓ Good storage facilities - both for raw material and finished products
✓ Use skilled labor
The Key Product Decisions
✓ Plan and develop the right product(s) or service(s) required by the customer at the right price.
✓ Determine the range of products / services (product width and depth).
✓ Keep in mind the product features that are most important for the customers.
✓ Be mindful of the product quality.
✓ Think of packaging and labeling your products.
✓ Think of product maintenance (where necessary).
✓ Compare your product with the competitors’.
Let’s Try This!
Using the matrix provided, answer the following questions:

1. What is your product/service about?
▪ What are the most important functions and features of your product/service!
▪ What customer need does your product satisfy? What demands do you meet?
▪ For who is the product or service conceptualized? Who is your target market? Who is the
ultimate user (consumer) of your product?

11
2. What is unique, special and original about the product/service (what is your competitive
advantage)?
▪ Highlight the add-on value for the customer and the unmet needs or wants your
product/service fulfills!
▪ Describe how your product differs from competitors. Competitive advantages can be:
o An all new product or service
o Lowest price
o Highest quality
o Fastest delivery
o Technically most advanced
o More useful features
o Saves time or money; more effective)
3. Are there any weak points regarding your product (e.g., special delivery, easy to copy by
competitors, etc.)? If yes, describe these aspects and explain how you are going to deal with them!
In this section you should describe the product or the service you are going to offer. You can describe
your product or service along the following questions. The most important points are:
What is the product or service The Product or Service

about?
(Make sure to mention the
following:
• What are the most important
functions and features?
• What customer need does your
product satisfy? What
demands do you meet?
For who is the product or service
conceptualized? Who is your
target market? Who is the
ultimate user (consumer) of your
product?)
What is unique, special or Unique, Special or Original Features of the Product or
original about the product or Service

12
service (what is your competitive

advantage)?
(Highlight the add-on value for
the customer and the unmet needs
or wants your product or service
fulfills! Describe how your
product differs from competitors.
Competitive advantages can be:
• An all new product or service
• Lowest price
• Highest quality
• Fastest delivery
• Technically most advanced
• More useful features
Saves time or money; more
effective)
Are there any weak points Important Product or Service Considerations
regarding your product (e.g.,
special delivery, easy to copy by
competitors, etc.)?
(If yes, describe these aspects and
explain how you are going to deal
with them!)
Are you going to develop your New and Follow-on Products or Services
product or service further in
future?
(If yes, describe new features of
your product or service and
whether you target different
customers with these new
features!)
ANALYSIS OF MARKET AND CONSUMER BEHAVIOR
As discussed in the previous topic, marketing is focused on the market place and customers. The
marketing process also begins with consumer analysis. It is therefore imperative to analyze the market and
consumer behavior.

13
What is a Market?
The concept of exchange naturally leads to the concept of a market. A market is a set of actual and
potential buyers of a product. It is an arena for potential exchange. A market is just part of the wider
concept of marketing.
The entrepreneur needs to scan the market environment and see what opportunities are available.
Information from the market environment will help the entrepreneur to make effective marketing decisions.
Understanding of markets involves analyzing the needs of buyers and creating products and services that
would satisfy consumers. The entrepreneur will understand the market by asking a number of questions
about the market. Information should not only be collected from consumers, but from the competition and
the entire marketing environment in general. Some of the questions to be answered include the following:
Checklist for Market Analysis

1. Who are your customers, both existing and prospective? Their demographic profile, economic
profile, buying power and other characteristics.
2. What do they buy? Who exactly buys what? What are their needs and wants?
3. Why, how, when and from where do they buy? Do they buy once a day, weekly, monthly, once in
their life time? Do they buy in the morning, afternoon, evening? Who makes and influences the
customer buying decision? Are the buyers the ultimate users of the products?
4. How much do they pay for similar/competing products? How much are they willing to pay for
your product? Are they willing to pay for your product?
5. Where are they located? Are they within your operating area, in the next area, district etc.?
Market research involves gathering full information about your likely customers, the competition,
the industry, and the general market environment. Without good information, you are "shooting in the
dark". By knowing your market, you will be able to create marketing programs that produce results.
Information can be got from internal sources within the organization or from external sources. The external
sources include the already existing records compiled by various organizations or through administering a
simple questionnaire. You need to understand your market so that you can achieve your sales target. You
also need to know the consumption and buying patterns or behaviors of your customers.
Market research will help you to know, specifically, the following:
Customers

14
1. Who are the customers? You should be specific. e.g. the hotels, the children, bars, primary schools,
universities, etc.
2. Where are they located?
3. How many are found in each location?
4. Are your customers increasing, decreasing or constant?
5. Why do these customers buy from you?
Market size
What is the size of your market is it increasing, decreasing or constant? You can use your business
records and the information from your customers.
Competition
Name and discuss all major competitors. You should compare your product with your competitors'
products in terms of price, quality, etc. You should know what they are doing better than you and what you
are doing better than them.
Let’s Try This!
I have provided you with a matrix as you answer the following questions:
1. Who is your primary target customer?
▪ Do a segmentation and describe your target group in detail! If your primary is the end
consumer use the following attributes:
▪ Age, gender, location, income level, social class, occupation, education, other (specific to
your industry).
▪ State precisely how, when, why and where these customers buy.
▪ If your customer is a business customer provide details about industry location, size of
firm, quality, technology, and price preferences.
2. What are the customers’ needs and wants?
▪ List the product or service attributes or features that are most important for your customers
when they make the purchase decision. Important attributes can be:
o Quality, price, design, branding, warranties, follow-up service…
This section is about the most important person for your business – your customer. Your customer is the
one you have to attract. Your customer is the one who will pay for your product or service. And your
customer is the one your competitors want to convince to leave you.
Who is your primary target customer? Primary Target Customers

15
(Do a segmentation and describe your target group

in detail! If your primary is the end consumer use
the following attributes:
• Age
• Gender
• Location
• Income level
• Social class and occupation
• Education
• Other (specific to your industry)
Which particular markets will you target / focus

more attention on and why?
State precisely how, when, why and where these

customers buy.
If your customer is a business customer provide

details about the following attributes:
• Industry (or portion of an industry)
• Location
• Size of firm
• Quality, technology, and price preferences
• Other (specific to your industry)
If you already have customers – that is even better.

Then provide the following:
• Names
• Addresses and phone numbers
Letter of interest or intent to buy your product or
service
What are the customers’ needs and wants? Customer Needs Assessment
List the product or service attributes or features
that are most important for your customers when
they make the purchase decision. Important
attributes can be:
• Quality
• Price
• Design
• Branding
• Warranties
• Follow-up service

16
Do you have target groups for your product or (Secondary and Tertiary Target
service in addition to your primary target group? Customers)
(If yes, give the same details for your secondary and
tertiary target groups as for your primary target
group!)
THE MARKETING MIX

The marketing mix (also commonly known as the 4 Ps for products and 7 Ps for services) is made
up of the controllable variables, which have to be carefully managed by an entrepreneur, and must meet the
needs of the defined target group. To effectively practice marketing, an entrepreneur needs to carefully
take decisions regarding these elements or variables.
These elements include:
1. Product
2. Price
3. Place/distribution
4. Promotion
For services, we need to add the three Ps below to the four above:
1. Process
2. People
3. Physical evidence

17
A combination of these elements will ensure that the right product conveniently gets to the customer
at the right time and place at the affordable price, and the customer is informed about the availability of the
product as well as convincing the customer to buy the product.
Product
A product is something that is offered to the customers for purchase to satisfy their needs and wants.
Products range from purely physical products to services. The entrepreneur’s task is to plan and develop
the right products required by the customer. The decisions on the range of products, product
characteristics/features, packaging, branding, labeling etc. are of particular importance. For example a good
package will protect your product from getting spoilt and also makes it easy for you and the customer to
move the product from one place to another. Branding and labeling your product will make it easy for the
customers to identify the product and easily refer to it by name.
The key product decisions to be made by the entrepreneur:
1. Product development (see module on idea development and implementation)
2. The range of products (product width and depth)
3. Product quality
4. Packaging and labelling
5. Maintenance
6. Service, guaranties and warranties
7. Comparison with competitors
Price
Price refers to the value attached to a product. It is what consumers pay for a product. The price
is set with various objectives in mind. When setting a price for your products, the following are important
considerations:
1. The demand for your product: If there are many people who are interested in buying your product,
you might think of increasing the price so as to take advantage of the demand. You should however
also consider customers’ abilities to pay the price you have set.
2. The price that your competitors are charging: Your price must relate to that of competitors. If you
charge a price that is far high from that of competitors, consumers/customers may prefer to buy
from your competitors because they are cheaper. That way you lose the market.
3. Cost of your product: The price you set for your product must be sufficient to cover the costs of
production or the cost of operating your business, and sufficient to enable the business make profits
and survive.

18
Place/Distribution
Products have to be moved from the seller to the buyer. This involves making a decision on the
channel through which the product will flow or be distributed. The entrepreneur should choose an outlet
to deliver the goods to the consumers carefully, as the chosen channel will affect the sale of your product.
The key placing/distribution decisions to be made by the entrepreneur are:
1. Distribution channels and number of outlets to reach customers
2. Strategic location of the business premises
3. Own building or rent premises
4. Public infrastructure facilities
5. Transport and logistics facilities
Promotion
Customers have to be informed of the existing products and persuaded to buy the products. The
entrepreneur should decide on how to inform the customers, through what media and what inducements to
make. Advertising on radio, television, newspapers etc. is the most common form of promotion. However
promotion may take a simple form like word of mouth, where friends and neighbors could tell others about
your product. The entrepreneur can even put up a simple sign at the business premises. As noted earlier,
advertising and other big forms of promotion are not cost effective for a small business. The entrepreneur
should therefore be careful when deciding on how much to spend on advertising, and what channels to use
(e.g. may opt for simple sign posts/posters or simple classified adverts in newspapers). Word of mouth is
more cost effective for small businesses.
THE COMPETITOR ANALYSIS
It is important to ponder on the following guide questions vis-à-vis analyzing your competitive
advantage for your enterprise:
1. Who are your competitors?
2. How do they conduct their business – what are their products or services?
3. How good are their products, prices, promotional and distribution activities?
4. What are their strengths? What are their weaknesses?
5. What are their sales levels?

19
Positioning Your Enterprise
To strategically position your enterprise, plan the position you wish to occupy in the minds of the
customer. Create a favorable position of your enterprise as well as your products on the minds of the
customers.
The steps to identify a favorable position are:
▪ Pick product/service attributes that are important for your customers (e.g., a high quality
product, a low price, etc.)
▪ Cross the attributes with your competitors and estimate your and your competitors’
performance on each attribute.
Positioning strategy is also the basis for marketing mix decisions.
Let’s Try This!
Try these exercises using the matrices below:

In this section you should analyze your key competitors and their products or services to get a
comprehensive overview of your industry. Remember, in most cases you have to gain and remain
customers in the face of strong competition. Thus, knowing your competitors is crucial for you!
Who is directly and indirectly competing with Direct and Indirect Competitors
you?
(Provide details of your direct customers –
that is customers who offer the same product
or service! Give their
• names
• products / services and their special
features (what makes them unique?)
• prices
• location
• promotion strategies
• and if available information about their
revenues and profits
Give the same details for indirect competitors

– that is competitors that offer substitute
products or services!
Who of your direct and indirect competitors is

most serious / threatening and why?

20
How is your position compared to your key competitors? First, take the attributes form the Working Sheet
04 – Customer Analysis and list them in the first column of the matrix! Then, cross your key competitors
with the attributes or features to form a competitive profile matrix! Give an honest assessment from 1
(very weak) to 5 (very strong) of your own and your competitors’ performance on each attribute or
feature!
My company <Competitor 1> <Competitor 2> <Competitor 3>

<Attribute 1>
<Attribute 2>
<Attribute 3>
<Attribute 4>
How is your position compared to your key competitors? Summarize your competitor profile matrix and
derive the most important points for your business! Regarding each competitor, what are your strengths,
what are your weaknesses, and what is your competitive advantage?
Main Competitors Their strengths over Their weaknesses My competitive

my business over my business advantage over
competitor
<Competitor 1> • • •

21
What aspects do your competitors do better than Learning from Competitors

you? To what extent can you learn from your
competitors?
This section deals with the industry or the market you are going to enter. So, define your industry or
market and give information about its size and future development. Answer the following questions and
you will get your industry and market analysis:
What industry or market does your The Target Industry

business enter?
(Define the industry and be
concrete about your specific niche!
E.g., if you produce chewing gums,
don’t spin a tale of the multi-billion
Shilling food market! Is the market
saturated with many competitors?
Is it an emerging market?)
What is the size of your market Market Size

regarding revenues?
(Find out the total size of your
industry and market regarding
revenues in the last years! This
gives an idea about the demand in
the market!)

22
What will be future trends and Trends and Future Developments

developments in your market?
(State whether the market will
grow, shrink, or remain stagnant in
future and give reasons and
references for your assessment!
State the general trend in the
industry based recent official
analyses, for example is the market
• emerging
• established
• saturated?
Describe whether customer needs
are likely to change in the short- or
long-term!
State other major forces that may

affect future development! For
example:
• Recent changes in industry
• Demographic changes
• Economic factors
• Legislative changes
• New technologies
New trends or fashions)
DESIGNING A MARKETING STRATEGY
For a business to compete and succeed in a market, an entrepreneur must develop a good plan to
market the products. A marketing strategy is a means designed to effectively implement a business’s
marketing activities in order to sell and make a reasonable profit. To design a good marketing strategy, an
enterprise should think of the following;
1. How they will segment the market.
2. The target market.
Positioning
The marketing mix programme/strategies. A marketing strategy will only be good if the right
marketing mix is chosen.
23
1. The product strategy

2. The pricing strategy
3. The distribution strategy
4. Promotion strategy
5. The processes, people and physical evidence (for service firms). Note: In designing your marketing
strategy, it is good to look at what the competitors are doing, i.e. what strategies they have in place.
This way you will be able to spot the strengths and weaknesses in their strategies, which will
provide a learning point for you.
6. Strategically stress your strengths over those of the competitor. Capitalize on the competitors
weaknesses to win customers
7. You may not be good in all areas, so capitalize on those areas where you a really good.
8. You should however compete ethically
Market Segmentation
This involves dividing the market into smaller clusters or segments with similar characteristics to
help direct an enterprise’s marketing efforts.
How do you segment the markets?

Segmentation according to Demography
1. According to age e.g. the young, the youths (middle aged) and the old
2. According to income levels e.g. the poor, the middle income earners and the rich
3. According to gender e.g. the male and the female customers
4. According to education levels e.g. those who have attained higher level, middle level or no formal
education at all
Segmentation according to geography
1. Those in urban as opposed to those in rural areas
2. According to their physical locations
Target Market
This is a specific market segment toward which an enterprise aims its marketing activities. The
entrepreneur should know who they intend to sell to so as to be able to plan for them better and reduce the
time wasted in attending to many small buyers.

24
Positioning
The entrepreneur should plan the position they wish to occupy, that is how they would like to be
remembered in their customers’ minds. Positioning strategy is the basis for marketing mix decisions.
Product Strategy
What kind of product(s) are you going to sell to your customers? What will be the depth and width
of your product(s)? How are you going to package, design and label them etc.
Test your product (and its price) on the market before you launch it. Product quality can be
achieved through:
1. Understanding the customer’s perception of quality
2. Working on the mindset towards a quality orientation
3. Using raw material with good quality
4. Using improved and efficient production process/technology
5. Proper finishing
6. Good storage facilities - both for raw material and finished products
7. Use of skilled labor
Pricing Strategy
What price do you want to charge for your product? What discount do you intend to give if any?
What about the payment terms? Remember that a high price as compared to that of competitors may scare
off your customers, while a very low price may not enable you to make reasonable profit out of your sales.
Distribution Strategy
Where will you sell your product? How will you ensure that the product reaches your customers?
Will you sell to urban or rural areas or both? Will you sell beyond your geographical region? The
entrepreneur should be aware that the more the distribution outlets, the more sales they are likely to make.
Promotion

25
How will you make your product known to your customers? Which media will you use to
communicate your products? Will you use radio, TV, fliers or a combination? You need to come up with
the proper choice of media so as to influence your sales positively. For example if majority of your
customers are of a low class, illiterate or of the local population, then it would be better to opt for a radio,
and preferably in a local language that appeals to the audience.
Let’s Think About This
With all the inputs I have given you about the fundamentals of Marketing, answer the following
questions:
1. Is Marketing selling or advertising? Justify your answer.
2. Why is it important to identify the market you want or intend to serve?
3. As an entrepreneur, what marketing concept will you adapt? Why?
4. Why is marketing strategy important in your enterprise?
5. How do you segment a market?
Let’s Try This
Develop a simple Marketing Plan utilizing the business opportunity you have identified in in the
previous module. The matrix below will help you craft your plan.
My Enterprise’s Marketing Plan
Do not forget – in most cases there are established competitors in the market, so why should customers
switch to your business? Use the different marketing strategies to build and retain a good customer base!
The basis for your explanations should be your view of the business. How do you intend to position
yourself in the markets?
How do you differentiate your Product Strategy

product from your competitors?
(Do you plan do offer any
additional features such as
technical support, warranties,
product upgrades, etc.?)

26
State or draw precisely how your

package and brand, brand mark
and brand name would look like!
Apart from quality, price is most Pricing Strategy

often the most important issue for
customers to base their purchase
decision on. At what price will you
offer your product or service in
comparison to your competitors?
(Consider the following issues to
get a comprehensive overview of the
current situation in your industry:
• Reconsider the target group you
mentioned in Action Working
Sheet 03 – Production
Description! How important is
the price for this group?
Probably, this group is putting a
stronger focus on service or
quality?
• What are the prevailing prices?
What are your competitors
charging?
• State the price level for your
product or service and explain
the reasoning for your price
level!
• If you segmented your markets:
Do you intend to charge
different prices across different
customer groups (price
discrimination)?
This is also the place to describe
your credit policies! State whether
you will also sell on credit. If this is
the case do not forget to mention all
related aspects (i.e., your decision
rules for who will get credit, how
you are going to check credit
worthiness of new customers, the
terms you offer regarding interests
and payback period, will you offer
prompt payment discounts, follow-
up procedures if credit is still due)
Distribution and Sales Strategy

27
How will the product or service

reach the customers?
(In this section, start with
describing how customers are
currently acquiring the product!
Then restate the means you will use
to distribute your product (e.g., via
retail outlets, wholesalers, sales
force, direct via web, mail order, or
catalog, independent
representatives, etc.)! Finish with
describing how you are going to
access the channels and means you
would like to use!
What can be a campaign that is not Promotion and Advertising Strategy

costly but customers will respond
to?
(Describe the avenues you are
going to use to advertise and
promote your product or service!
Think about means that are most
effective to reach your primary
target group! Mention the
associated costs! Think also about
small means such as a logo,
business cards, brochures, flyers,
and particularly word-of-mouth!)


Session 1 The Entrepreneur and His Markets: Module in The Entrepreneurial Mind

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Session 1 The Entrepreneur and His Markets: Module in The Entrepreneurial Mind

Uploaded by

Copyright:

Available Formats

1

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

What Is This Session About?

What Will You Learn?

What Do You Already Know?

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

WHAT MARKETING INVOLVES?

What really does Marketing involve? Take these points:

Customer Needs and Wants

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

Customers and Consumers

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

BUILDING A MARKETING ORIENTED BUSINESS

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

DO ALL BUSINESSES ADOPT THE MARKETING CONCEPT?

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

THE PRODUCT STRATEGY

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

How to Achieve Product Quality?

✓ Understand the customer’s perception of quality

The Key Product Decisions

Let’s Try This!

Using the matrix provided, answer the following questions:

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

What is the product or service The Product or Service

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

service (what is your competitive

ANALYSIS OF MARKET AND CONSUMER BEHAVIOR

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

Checklist for Market Analysis

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

Let’s Try This!

Who is your primary target customer? Primary Target Customers

(Do a segmentation and describe your target group

Which particular markets will you target / focus

State precisely how, when, why and where these

If your customer is a business customer provide

If you already have customers – that is even better.

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

THE MARKETING MIX

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

THE COMPETITOR ANALYSIS

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

Positioning Your Enterprise

Let’s Try This!

Try these exercises using the matrices below:

Give the same details for indirect competitors

Who of your direct and indirect competitors is

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

My company <Competitor 1> <Competitor 2> <Competitor 3>

Main Competitors Their strengths over Their weaknesses My competitive

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

What aspects do your competitors do better than Learning from Competitors

What industry or market does your The Target Industry

What is the size of your market Market Size

Module in The Entrepreneurial Mind Dimson M. Rivero, DBA Bicol University

What will be future trends and Trends and Future Developments

State other major forces that may

DESIGNING A MARKETING STRATEGY

1. The product strategy