The Entrepreneurial

Mind
(NCM 101)

Rhizel Marie C. Fariñas

2BSN-C
Developing a Business Plan A. Description of business
B. Industry Background
Why is planning important? C. Goals and Potential of the
 Every endeavor needs planning in business
order to be successful D. Product or service uniqueness
III. Marketing
Consider: A. Research and analysis
i. Target market
 Commitment ii. Market size
 Flexibility iii. Competition
 Realistic Goals iv. Estimated market share
 Milestones B. Marketing Plan
What is Business plan? i. Marketing strategy
(distribution and sales)
 shows a clear picture of what the ii. Pricing
venture is, where it is projected to go, iii. Advertising and
and how the entrepreneur plans to promotions
get there. This is considered as a road IV. Operations
map for a successful enterprise. A. Determine geographical location
advantage
Planning pitfalls that you need to avoid:
B. Certain Operational procedures
 There are no realistic goals C. Personnel need
 Failure to foresee obstacles D. Accessibility to suppliers
 There is no dedication and V. Management
commitment A. Management Team
 Lack of significant experience B. Organizational Structure
(technical or business) VI. Financial
 There is no market segment(niche) A. Financial Forecasts (pro forma
 Benefits of having a business plan financial statements)
i. Profit and Loss
How to develop a Business Plan? ii. Balance Sheet
iii. Cash Flow
1. Identify the venture’s characteristics
iv. Break even Analysis
and its industry.
v. Cost Control
2. Identify the plan’s financial structure
vi. Budget Plan
3. Know the latest balance sheet
VII. Milestone Objective
(liquidity, debt/equity and net worth)
A. Timing and objectives
4. Identify the quality of entrepreneurs
B. Deadlines and milestones
in the business venture
C. Relationship of events
5. Determine what makes this business
venture special. Target Market
6. Read the whole plan again
 a population that has been chosen
Elements of a Business Plan: because of similar traits like age,
income, and lifestyle as the most
I. Executive Summary
probable candidates to purchase a
II. Business Description
 product. As a business creates,  the process of discovering a particular
packages, and advertises its product, collection of traits (subgroups) that
determining the target market is a set one group of consumers apart
crucial step in the decision-making from the others.
process.  Identifying and separating the
relevant market segments involves
Difference between Target Marketing
identifying the clients who agree on
and Market Segmentation what they believe makes a product or
service worthwhile.
 Target marketing refers to the  Creating a customer experience that
marketing activities carried out satisfies these clients is becoming
on the selected group of increasingly important
customers that the business
concentrates on for the sale of 4 ways in which the market may be
their products, services and Segmented:
solutions.
 Market segmentation is the 1. Demographically
process through which the 2. Geographically
market is divided into various 3. Behavioral
groups on the basis of 4. Psychographic
demographic, geographical,
psychographic and behavioral Market Positioning
attributes of the population.  the ability to influence consumer
 should be carried out before perception regarding a brand or
determining the target market. product relative to competitors.
 to establish the image or identity of a
Target Marketing
brand or product so that consumers
 a marketing strategy that divides a perceive it in a certain way.
customer base into groups before
focusing your marketing initiatives on 5 major Classification of consumer
one or a small number of these products:
segments, which are made up of
1. Convenience Good
customers whose requirements and
preferences most closely align with 2. Shopping Good
the characteristics of your product or
3. Specialty Good
service.
4. Unsought Good
How to Select a Target Market:
5. New product
 The market must be sufficiently
appealing, and the firm must be able
to serve it.
 A company can become an industry 1. Convenience Good
leader by focusing on a specific  bought the most frequently
market. Experts in that market would by consumers.
be able to provide consumers with an  Bought immediately and
exceptionally high service standard. without great comparison
between other options.
Market Segmentation  typically low-priced, not-
differentiated among other
products, and placed in
 locations where consumers
can easily purchase them.
 The products are widely
distributed, require mass
promotion, and are placed in
convenient locations.
Examples:
 Sugar, laundry detergent, pencils,
pens, and paper are all examples of
convenience
 products.
Characteristics of Convenience Products:
 Purchased frequently
 At a low price point
 Easily available
 Not commonly compared with other
products
Examples:
2. Shopping Goods
 Bought less frequently by
consumers.
Characteristics of Specialty Products:
 Usually compare attributes of
shopping products such as
quality, price, and style
between other products.
 Are more carefully compared
against and consumers spend
considerably more time, as
opposed to convenience
products, comparing
alternatives.
 require personal selling and
advertising and are located in
fewer outlets (compared to
convenience products) and
selectively distributed.
Example:
 Airline tickets, furniture, electronics,
clothing, and phones are all examples
of shopping products.
Characteristics of Shopping Products:
 Purchased less frequently
Example:
 At a medium price point
 Commonly compared among other
products
3. Specialty Goods
 products with unique
characteristics or brand
identification.
 Consumers of such products
are willing to exert special
effort to purchase specialty
products.
 are typically high priced, and
buyers do not use much time
to compare against other
products.
 Typically spend more effort in
buying specialty products
compared to other types of
products.
 Sports cars, designer clothing, exotic
perfumes, luxury watches, and
famous paintings.
 With unique characteristics
or brand perception
 Purchased less frequently
 At a high price point
 Seldom compared between
other products
 Only available at
select/special places
4. Unsought Goods
 products that consumers do
not normally buy or would
not consider buying under
normal circumstances.
 Typically, do not think about
these products until they
need them.
 not conventionally thought
of by consumers, they
require aggressive
advertising and personal
selling.
  Diamond rings, pre-planned funeral
services, and life insurance.
Characteristics of Shopping Products:
 Not top-of-mind of consumers
 Requires extensive advertising and
marketing efforts
5. New Goods
 the lifeblood of all
businesses.
 products could be a physical
tangible product such as an
automobiles, smartphones,
or coffee maker machine. It
could also be services like IT
software, new production
process, or a new marketing
concept.
Consumer Behavior
 the study of how people make buying
decisions.
 attempts to understand how buyers
choose, use and dispose of products
and services, as well as the various
stage people go through before
making a purchase.
Entrepreneurs should focus their attention on
only two (2) considerations:
 Personal characteristics – are the
differences in social class, income,
occupation, education, housing,
family influence and time orientation
 Psychological characteristics –are the
needs, perceptions, self-concept,
aspiration groups and reference
groups.
Five types of consumers:
 Innovators
 Early adopters
 Early majority
 Late majority
 Laggards.
Types of Consumer Behavior
1. Complex Buying Behavior- occurs
when an individual buys an expensive
and infrequently purchased product.
2. Dissonance-Reducing Buying
Behavior- occurs when a consumer is
highly involved in the purchase of an
item, but they have a hard time
pinpointing the difference between
various brands.
3. Habitual Buying Behavior- happens
when consumers purchase something
on a regular basis, but they are not
emotionally attached to a brand.
4. Variety Seeking Buying Behavior-
happens when individuals decide to
buy a different product in the same
product line, such as a new brand of
toothpaste, not because they were
dissatisfied with their initial purchase,
but because they want to try
something new.
Impulse Buying
 buy something without thoughtful
consideration or planning.
 characterized by a sudden strong urge
to make a purchase, usually in
response to a positive emotional state
such as excitement or happiness.
Consumer Behavior
 influenced by many different factors.
Understanding your customer is an
important factor in go-to-market
success.
Major Factors Influencing Consumer Behavior
 Psychological Factors
 Social Factors
 Cultural Factors
 Personal Factors
 Economic Factors
Marketing Research
 involves the gathering of information
about a particular market, followed by
analysis of that information.
Gathering Secondary Data
  Information that has been compiled
by others is known as secondary data.
 may be internal or external.
GATHERING PRIMARY DATA
 If secondary data are insufficient, a
search for new information, or
primary data, is the next step.
 often classified as observational
methods and questioning methods.
 Observational methods- avoid
contact with respondents, whereas
questioning methods involve
respondents in varying degrees.
1. oldest form of research in existence.
2. avoid a potential bias that can result
from a respondent’s awareness of
their participation under questioning
methods.
 Surveys and experimentation are two
questioning methods that involve
contact with respondents.
Developing an information-gathering
instrument
1. Make sure each question pertains to a
specific objective in line with the
purpose of the study.
2. Place simple questions first and
difficult-to-answer questions later in
the questionnaire.
3. Avoid leading and biased questions.
4. Ask ‘How could this question be
misinterpreted?’ Reword questions to
reduce or eliminate the possibility
they will be misunderstood.
5. Give concise but complete directions
in the questionnaire; succinctly
explain the information desired and
direct respondents around questions
that may not relate to them.
INTERPRETING AND REPORTING
THE INFORMATION
 should be developed into usable
information.
 must be organized and molded into
meaningful information.
Product
 Is the good or service a firm offers to
its target market.
 Initial rollout is one of the most
critical times in the marketing of a
new product.
Price
 the amount of money consumers pays
to buy a product.
Pricing Strategies
1. In some situations, the quality of
a product is interpreted by
customers according to the level
of the item’s price
2. Some customer groups shy away
from purchasing a product where
no printed price schedule is
available
3. An emphasis on the monthly cost
of purchasing an expensive item
often results in greater sales than
an emphasis on total selling price
4. Most buyers expect to pay even-
numbered prices for prestigious
items and odd-numbered prices
for commonly available goods
5. The greater the number of
meaningful customers benefits
the seller can convey about a
given product, generally the less
will be the price resistance.
Effect of customization in pricing
Strategies
 the customization happens
only at the stage of assembly,
allowing the component and
basic modules to be
produced in volumes
sufficient to maintain an
affordable economic cost for
the business which can
produce a customized
product for the customer at a
price they are willing to pay.
  there are no standardized
components but instead, the
customer is involved in the
process of designing the
parts of the product or
service they need.
 involves extensive interaction
with the
 user at the early stages of
the product/service
experience and adds to the
responsibility of the producer
to work with the customer to
create the specifications that
meet the customer’s
preferences.
Pricing Online
 Freemium Model-Offers a basic
service for free, while charging for a
premium service with advanced
features to paying members.
 Affiliate model- The business makes
money by driving traffic, leads or sales
to another, affiliated company’s
website
 Subscription model- This requires
users to pay a fee (generally monthly
or yearly) to access a product or
service
 Virtual goods model- Users pay for
virtual goods, such as upgrades,
points or gifts, on a website or in a
game.
 Advertising model- Advertisements
are sold against the traffic of the site.
Simply put, the more traffic you have
on your site, the more you can charge
for ads (additional demographics
about your site’s visitors, such as age,
gender, location or interests, also
affects the amount you can charge
advertisers to place ads on your site
Factors affecting the pricing decision
 The degree of competitive pressure
 The availability of supply
 Seasonal or cyclical changes in
demand
 Distribution costs
 The product’s life-cycle stage
 Significant change in production costs
 The economic conditions
 Customer services given by the seller
 The amount of promotion
 The market’s buying power
Pros and Cons of Advertising
PROS
 Promotes customer awareness of the
product
 Discuss the products features and
benefits
 Make connections between a product
and a specific lifestyle.
CONS
 Low credibility
 The possibility that a large proportion
of those who see the
 advertisement will be uninterested.
 Message overload
 Costly compared to other forms of
promotion
 Intrusiveness
Public Relations
 One of the most cost-effective ways to
increase the awareness of the
products of a company.
 refer to efforts to establish and
maintain a company’s image with the
public.
Social Media Marketing
 the use of these tools for marketing
purposes.
Important aspects to consider with
social media marketing
1. Create something of value with an
event, a video, a tweet or a blog entry
that attracts attention and becomes
viral in nature, as in viral marketing
 2. Enable customers to promote a
message themselves with multiple
online social media venues.
3. Enable customers to promote a
message themselves with multiple
online social media venues.

Key Distinctions

1. Known as control versus

contributions.
2. Building trust
3. How social media messages are
absorbed

Mobile Marketing
 is a high-impact, fast-paced marketing
tool that many businesses have begun
to use effectively as key component of
their overall marketing strategy

Green Marketing
 tremendous growth of the global
market for organic and
environmentally friendly products
demonstrates the importance of
social and environmental principles.
 Recyclability, reusability,
biodegradability, and positive health
effects are unquestionably in favor

Sales Process
 A firm’s sales process (or sales funnel)
depicts the steps it goes through to
identify prospects and close sales.
 A formal sales process involves a
number of identifiable steps.