OCTOBER
THE MARKETING PLAN
WHAT IS A BUSINESS PLAN?
It is a comprehensive paper that details the situation analysis,
objectives, strategies and tactics, and how to monitor and control the
enterprise.
After the comprehensive processes of seeking, screening, and seizing
the opportunity, it is now the time for the entrepreneur to focus on the chosen
business and dig deep. Entrepreneur must write a business plan to help
him/her in business venture.
This module will also let you understand and identify what makes a product
or service stand out from the competitors through defining the unique selling
proposition and value proposition of the product or service. You will
understand the behavior, attitude and psychology of the entrepreneur’s
customers through various ways of customer validation. You will understand
in detail and apply the 7P’s of marketing or the marketing mix in instigating
awareness and driving sales of the business venture. Last, you will understand
the fundamentals in brand management and how branding gives a specific
business an overall appeal and credibility.
VALUE PROPOSITION AND UNIQUE SELLING PROPOSITION
Before focusing on the topics of value proposition and unique
selling proposition, you must first know the marketing process. In a
nutshell, marketing is all about knowing the customers. Therefore, the
marketing process starts with identifying the customers’ needs where you
are tasked to create a meaningful value proposition. Next, you study the
customers want or desire for you to build a unique selling proposition. From
there, it is imperative to identify the most strategic market or group to tap.
A value proposition (VP) simply states why customer should buy a
certain product or service. Customers are very specific when it comes to
their needs and their desire benefits, so the value proposition should cater to
those particular needs. Thus, the value proposition is the major driver in
customer purchased or service availment.
The startup entrepreneur will surely have a hard time thinking of a value
proposition for his or her business. the entrepreneur should bear in mind that
a value proposition has to be direct in addressing the problems of the
customers, should have quantifiable benefits, and should differentiate itself
from the competitors.
SOME TIPS FOR THE ENTREPRENEUR ON HOW TO CREATE
AN EFFECTIVE VALUE PROPOSITION TO THE TARGET
CUSTOMERS:
1. Prepare a situation analysis that details the problem(s) of the
customers.
2. Make your value proposition straight to the point, simple,
and specific; in short, there should be no complications.
Your value proposition has to target your major objective.
3. Highlight the value of your product or service so that
customer will easily get what benefits you can provide.
ENTREPRENEURSHIP 1

4. Adopt to the language of your market. Ensure that your
target market understand clearly what you are trying to say
to avoid putting unnecessary and inexplicable phrases.
5. And credibility-enhancing elements such as actual
testimonials from customers, partners, and other stake
holders, putting specific assurance elements and social
acceptability metrics found in social media or press
materials. Several qualify management certifications, such
as ISO seal, add more credibility to the product or service
that you are trying to sell.
6. Differentiate your value proposition with your competitors.
Examples of value proposition differentiators are the
originality of the product or service, its functionalities, or if
the product or service can be tailor-fitted to the customer’s
preference, among others.
To illustrate, here is a sample potential value proposition from the
most common businesses in the Philippines.
ALING TERE’S SARI-SARI STORE
Situation Analysis:
Prior to the establishment of a sari-sari store, Aling Tere notices
that there is a convenience store in her vicinity, where many call center
agents, nurses, and construction workers buy food, beverages and other
products during odd hours (from 10 PM to 6 AM). She discovers that the
customers either ride a tricycle or jeepney just to reach the convenience
OCTOBER
store. There are two sari-sari stores nearby, but they close at 9PM. Aling
Tere believes this is an opportunity for a sari-sari store business with a twist.
Aling Tere realizes she needs to address the needs of the customers to
differentiate her business from the competition. She decides to establish a
24/7 sari-sari store in three shifts. During their break, Aling Tere mans the
sari-sari stor herself. She designs her sari-sari store like a semi-convenience
store, where customers can freely go and choose the product they want. It is
also air-conditioned. For security purposes, she also installs a CCTV
camera. Her task now is to craft a worthwhile value proposition for the
potential customers.
Proposed value proposition: “Tindahang maaasahan, bukas kahit
anong oras!”
Why should this be considered an effective value proposition? It is specific
and straight to the point. It describes what the business is by referring to
tindahan –a Filipino term for a basic retail store. It highlights the value to the
customers that they can buy their basic necessities from the store. It is easily
understandable because it is in Filipino language, which can be understood
by the customers, most of whom speak the language. There is a compelling
assurance from this value proposition because the phrase “bukas kahit
anong oras” signifies a guarantee that customers will be served anytime of
the day. And last, Aling Tere’s store is the only sari-sari store that is open
24/7, which makes her store different from the competitors.
The unique selling proposition (USP) refers to how you will sell
the product or service to your customers. It addresses the customer’s wants
and desires. After you create your value proposition, you have to figure out
how to advertise or promote certain unique features of the product or service
that you’re trying to sell. You can do this in the form of product or service
ENTREPRENEURSHIP 2
 OCTOBER

characteristics, promotions strategies and tactics, distribution centers and
supply chains, pricing, physical attributes or physical; evidence, human
resources or human capital, and market positioning strategies. The ability to
craft an effective USP is a gauge on how well and entrepreneur knows his or
her product or service.
SOME TIPS FOR THE ENTREPRENEUR ON HOW TO CREATE
AN EFFECTIVE UNIQUE SELLING PROPOSITION TO THE
TARGET CUSTOMERS:
extravagant promotion. The customers do not want to feel that they
are being fooled.
3. KISS (Keep it short and simple)- One challenge that marketers
always face is that the customers’ attention span is limited and very
easy to switch. Therefore, think of a very catchy unique selling
proposition in the simplest and shortest way possible. You can
compare it with a headline of a newspaper or a Web site. That’s the first
item that the customers will see.

1. IDENTIFY AND RANK THE UNIQUENESS OF THE

PRODUCT OR SERVICE ATTRIBUTE - This is the most To illustrate, use the example from the previous discussion to build a
difficult part because you only need to choose one or two at the potential unique selling proposition for Aling Tere’s Sari-Sari Store.
most. That attribute will be your key to success, as this will compel
customers to purchase from you and not from your competitors. The first step is the identification and ranking of the uniqueness of
The unique selling proposition, while it presents the best features of the product or service attribute using the 7P’s of the marketing. Make sure
your product or service, should also avoid competition. Put yourself that there is a thorough explanation and analysis about the ranking.
in the customers’ shoes and ask yourself, “Why should I choose
you over the others? or Why should I deal with you at all?” 7Ps Prod Place Price Promo Peop Packag Proc
Identifying the unique selling point is a tough job and requires uct tion le ing ess
marketing research. the best way to identify it is to identify the or
marketing mix (7P’s) and distinguish which among those displays Servi
the product’s unique features. ce
2. BE VERY SPECIFIC – Put details that emphasize the USP Retai Near a Compe Signag Three Semi- The
differentiator against the competitors. This differentiator should be descri l call titive e shifts conveni only
very compelling and should make the customers think that they are ption Prod center, of ence sari-
really getting more value from you than the others. By being ucts a public Aling store sari
specific, make sure that the USP does not rely on heavy, hospital Tere’ store
, and a s that

ENTREPRENEURSHIP 3
 OCTOBER

constru assist oper You will notice that the proposed value proposition and unique
ction ants ates selling proposition are the same. Why? Because the most compelling
site (6am- 24 differentiating factor is positioning, the value proposition is also the perfect
2PM, hour unique selling proposition, considering all the factors enumerated were all
2PM- sa met (defined unique attribute, specific, and short/simple). It is catchy, too.
10pm, day, However, this may not be the best unique selling proposition for Aling Tere.
10pm- 7 The entrepreneur’s creativity and inventiveness will always come into play.
6am) days Both the value proposition and the unique selling proposition should
a be clearly communicated to the target customers in the catchiest way
week possible. Common communication channels include signage, Websites,
Uniqu No No No No Yes Yes Yes social media, print ads, television and radio commercials, and mobile
e? advertisements.
Ranki 3 2 1
ng of
USPs
WHAT I HAVE LEARNED SO FAR?

The process was ranked first as the most unique because Aling Tere
wants to solve a compelling problem of the customers, i.e., the availability of
a retail store near their workplace in odd hours. This was based on her
marketing research about her environment. Packaging was ranked second
because it is the only semi-convenience store in the area, a hybrid of a
convenience store and a sari-sari store. People ranked third because it is the
only sari-sari store that has three shifts. It is common that the owner or an
assistant attend to the store with a predetermined schedule, and not the entire
day.
Proposed unique selling proposition: “Tindahang maaasahan,
bukas kahit anong oras!”
Create your own value proposition and unique selling
proposition with the business you want to venture into. Make sure
that it is catchy and emphasize your business attribute that will
surely compel the customers to purchase and avail your product or
services. Use your creativity when creating your own value
proposition and unique selling proposition. Use the provided tips in
creating VP and USP.
KNOW YOUR CUSTOMER
After the general scan and research performed during the course
of preparation for the value proposition and the unique selling

ENTREPRENEURSHIP 4
 OCTOBER

proposition and the unique selling proposition, it is now the time to dig 1ST PERSON: Well, I just love bats, so I sell bats on a stick. Sort of a pet,
deep and understand the target customer through marketing research. you know. Got to love ‘em. Feed ‘em flies.
4TH PERSON: Really?
MARKETING RESEARCH- is a comprehensive process of understanding 1ST PERSON: Yeah.
customers intricacies’ and the industry they revolve in. Marketing 4TH PERSON: How’s it going
research is one of the most critical tasks of an entrepreneur. Therefore, 1ST PERSON: Well, not great. People don’t seem to get it. And they bite
no budding entrepreneur should establish a business without undergoing sometimes.
marketing research process or else the business will surely fail. The result 4TH PERSON: Okay, how about you? (pointing to the 2nd person).
of marketing research is the entrepreneur’s major investment in a 2ND PERSON: Yeah, I’M really good at cooking.
business, as it will lead him or her to the most effective strategies to 4TH PERSON: Cooking?
employ marketing research aims to scrutinize the target market, their 2ND PERSON: Right. So, I got this recipe for butter on a stick.
specific requirements, and the market size where the business operates. 4TH PERSON: On a stick?
2ND PERSON: Yeah. Wrapped cold in a tortilla. I’m really good at it.
4TH PERSON: Ho’s it going for you?
LET’S READ THE SCENARIO AND ANALYZE HOW ENTREPRENEURS 2ND PERSON: I’ve sold a couple….well, one.
WORKED WITH THEIR OWN BUSINESSES. 4TH PERSON: And you? (referring to the 3rd person)
3RD PERSON: Yeah, so I watched people on the street at different times
“BUSINESS ON A STICK” of the day. And I asked them questions. And I watched
what they buy and when and for how much. And I talked
SETTING: Three discouraged people are sitting on a bench when a to people who were selling stuff about what worked and
fourth person comes to sit down. what didn’t. I was interested in a food business, because
NARRATOR: So, what is a successful business? It’s also about helping they are easy to get into, and I like food and I like people.
people solved their problems. It’s about understanding 4TH PERSON: Really? You did all that?
customers. If someone has a need and you help them 3RD PERSON: Yeah, for several days. It was really interesting.
solve it, they will pay you. And that’s good! But how do 4TH PERSON: I’ll bet it was! What did you find out?
you find out what customers need? 3RD PERSON: Well, I was surprised. I found out that in the afternoon
TH
4 PERSON: Hello, Hey, I’m trying to start a business. Have any of you and evening, people want something sweet ad
ever run businesses? convenient and not too expensive and fun—a treat to
OTHER PEOPLE: “Yeah.” “Yeah.” “Yeah.” give them a lift or to share with a friend or their family.
4TH PERSON: Oh, that’s great. What are they? So, I tried a few things and talked to more people.
4TH PERSON: And did you find an answer?

ENTREPRENEURSHIP 5
 OCTOBER

3RD PERSON: Yeah. I found out that if you put the banana on a stick 2nd Person:
and then coat it with just a little chocolate, the right kind, ____________________________________________________________
and the you add these sprinkles to it, well, people just ____________________________________________________________
love it---especially if you’re in the right location at the right time. ____________________________________________________________
4TH PERSON: Really?
3RD PERSON: Yeah, my friend and I sold 400 the first couple of days and
made a lot of money. It really met the need: it was simple 3rd Person:
and profitable. ____________________________________________________________
4TH PERSON: Wow! So, what’s next? ____________________________________________________________
____________________________________________________________
3RD PERSON: I’m quitting. ____________________________________________________________
4TH PERSON: Quitting?
3RD PERSON: Yeah, it’s a lot of work on hot days.
4TH PERSON: Hmmmm. So, would you mind if I sort took of your idea? 2. In your third activity of your performance task, how will talking to
3RD PERSON: Nah, All yours. Go right ahead. people, knowing your customer specific wants and needs and knowing
NARRATOR: Watch, Ak questions. your own interest (skills, talents) help you to select the right business?
Know the customers. _____________________________________________________
Work hard, make money. ____________________________________________________________
Enjoy the bananas! ____________________________________________________________
____________________________________________________________
QUESTIONS: ____________________________________________________________
____________________________________________________________
1. How would you differentiate the three entrepreneurs that was ____________________________________________________________
asked by 4th person? ____________________________________________________________
Identify what’s wrong with; ____________________________________________________________
1st Person: ____________________________________________________________
____________________________________________________________ ____________________________________________________________
____________________________________________________________ ____________________________________________________________
____________________________________________________________ ____________________________________________________________
___________________________________________________________ ____________________________________________________________
__________

ENTREPRENEURSHIP 6

MARKET SIZE
Market Size is simply the size of arena where the entrepreneur’s
business will play. It is the approximation of the number
of buyers and sellers in a particular market. The
entrepreneur is required to determine the market size
first to gauge the vastness or tininess of the market
where he or she intends to join. The only way to do this
is to conduct a strategic marketing research from
reliable sources using dependable methods.
The first step is to estimate the potential market—the
approximate number of customers that will buy the product or avail the
service. Usually, this is what you call the market space or the market
universe because this is the total market. For example, rice, the staple
food of Filipinos, virtually covers the whole country in terms of market
size because majority of Filipinos eat rice.
The second step is to eliminate the customers who are probably
unlikely to buy the product or avail the service. Using the rice retailing
business again, the entrepreneur can already eliminate socioeconomic
classes A, B and C because most these customers buy rice in bulk (sacks)
or are given freely by some employer. They are also not the major
consumers of rice.
OCTOBER
The last step is for the entrepreneur to estimate the market
share, which is the plotting and calculation of the competitors market
share to determine the remaining portion for the new venture.
The entrepreneur should first assess the market situation via surveys,
customer reviews, or any data-gathering methods. From there, she or he
will be able to calculate the number of potential customers that will but
the product or service offered. This will be the basis to decide whether
the business is worth the capital that will be used.
Market share computation illustration: Mr. Alvin Antonio, a
budding entrepreneur, wants to establish a rice retailing business in his
area in Barangay San Isidro. He wants to know if this business is worth his
capital and effort. He dug deep and found out that there were
approximately 500 families in Barangay San Isidro with an average of five
members per family. He did a survey and found out that only 475 families
eat rice; they consume an average od 1 kilo of rice per day. There are four
other rice retailers in the area that have been there for 10 years already,
and they have equal market shares of 20% each. The other 20% of the
market is buying in bulk (per sack) from groceries or convenience stores.
The average net profit per kilo of rice is ₱10.00. how big is the market size
and what could be the potential market share of Mr. Alvin’s rice retail
business?
Market size of rice business in San Isidro = Number of families who eat
rice x average consumption per annum (year).
Market size = 475 families x 1 kilo per day x 365 days
= 173 375 kilos of rice
Market size profit = 173 375 kilos x ₱10
= 1 733 750 per annum
ENTREPRENEURSHIP 7

The objective of Mr. Antonio in the first year is to capture the
20% of the market by implementing marketing strategies in pricing
(reduced markup of ₱2) and promotion (free delivery of rice for five kilos
and up) through text message or phone call. None of the competitors
have thought or done these strategies yet. In the example, the four rice
retailers are considered direct competitors because they offer exactly the
same product and are structured similarly with Mr. Antonio’s proposed
business. On the other hand, the groceries and convenience stores are
considered indirect competitors because they don’t offer exactly the
same product type (i.e., rice sold in sacks instead of by kilo) and are not
similarly structured but still compete with Mr. Antonio’s business
indirectly.
Potential market share = market size x estimated market share
= ₱1 733 750 x 20%
= ₱346 750
However, because Mr. Antonio will reduce the markup by ₱2, the net
profit per kilo will only become ₱8.
Potential market share = 173 375 kilos x 20% x ₱8
Potential market share = ₱277 400
REFLECT UPON
Imagine yourself as an entrepreneur.
1. Based on your observation, do you think Filipino
entrepreneurs apply a systematic way of calculating market size,
OCTOBER
customer requirements, and primary target market before they
venture into a business? What made you say yes, no, or maybe? Do
you think calculating the market size, market share and customer
requirements does really matter? why? Relate your answer as if you
have an existing business.
________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_____________________
2. What do you think are the procedures they follow if they are
not following the systematic “know your customer” process?
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_____________________________________________________________________
ENTREPRENEURSHIP 8

3. In your opinion, will entrepreneurs still be successful even if
they don’t conduct the “know your customer” process? why or why
not?
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_____________________________________________________________________
OCTOBER
CUSTOMER REQUIREMENTS
CUSTOMER REQUIREMENTS – are specific features and
characteristics that the customers need from a product or a
service. It is in the customer requirements that business
opportunities originate. Entrepreneurs must be aware of all
these requirements for them to come up with features that
best suit their needs. They must know who buys, and what,
when where, how, and most importantly, why they buy.
These requirements can be used to formulate the value
proposition and the unique selling proposition, as addressing
the requirements would increase the
competitive edge of the business. Entrepreneurs should also
be vigilant with the constant change in customer
requirements. For example, cellphone repair services five
years ago are way different now because of the proliferation
of smartphones today as compared with regular mobile
phones before.
For example, in a restaurant business, some
customers will prefer cheaper prices or a bundled menu; some will
prefer cozy ambiance; some will prefer a place with relaxing music;
some will prefer to have a food served fast; and some will prefer to
pay using their credit card and not cash. In short, customer
ENTREPRENEURSHIP 9

requirements vary from person to person. Thus, the entrepreneur
must group them together, calculate their size, and come up with
products and services that suit them. The customer is the voice of
every business that every entrepreneur should listen to.
PRIMARY AND SECONDARY TARGET MARKET
Most entrepreneurs believe in the misconception that they
can serve all type of customers or, if not, a wide range of customers.
Little do they know that this thinking may lead to failure.
Entrepreneurs must focus only t whom they can serve beneficially
because they will be wasting resources if they will target all, or
worse, target none.
The entrepreneur can tap a primary target market and a
secondary target market as resources are limited during the startup
stage. With this, the probability success is higher as the entrepreneur
can focus to sell to the identified customer groups.
MARKET INTELLIGENCE (includes customers profiling) drives the
entrepreneur on what correct strategies and tactics to employ. This
can be obtained through a meticulous market segmentation
process.
MARKET SEGMENTATION is the process of grouping similar or
homogenous customers according to demographic, psychographic,
geographic (location), and behavior. It is necessary activity in
marketing because it gives the entrepreneur a holistic and general
view of the market group that he or she is serving. Therefore, there
OCTOBER
will be efficiency and proper logic in implementing marketing
strategies and tactics to this chosen market group.
Secondary target market- they are the customers who don’t have
enough purchasing power or have a fewer demand. They may not
be your primary target market, but they can be converted once
effective marketing strategies are implemented.
DIFFERENT FACTORS OF MARKET
SEGMENTATION
DEMOGRAPHIC SEGMENTATION -also called socioeconomic
segmentation, is the process of grouping customers according to
relevant socioeconomic variables for the business venture. These
socioeconomic variables include income range and social class,
occupation, gender and age, religion, and ethnicity. These data help
the entrepreneur target customers accurately and classify their
respective needs, wants, and desires. The risk in focusing solely on
demographic data is that these data change with society.
Therefore, the entrepreneur must be alert with these
changes.
Income range and the social class of customers are very
important factors for the entrepreneur to consider because these
represent the purchasing power of the market. From here, the
entrepreneur will be able to determine the extent to which the
ENTREPRENEURSHIP 10
 OCTOBER

customers can buy or avail of the service; therefore, he or she will perfumes,
have an idea on how the profitability will look. magazines, shoes
Services: Spa, beauty clinics,
Occupation should also be considered not just to determine gyms, beauty
the customers’ income but also their daily routine where goods salons, coffee
and services can be properly positioned. Going back to our shops, movie
previous example of Aling Tere’s sari-sari store, she based her houses
decision of putting up the store because she has knowledge of Married couples with kids (30- Products: Food and grocery
customers’ occupations (i.e., call center agents and night shift 50) items, diapers,
nurses). milk products, baby
clothes
Gender and age group are data that must be mined Services: Theaters,
because the life cycle of customers and their gender influence babysitters, theme
their buying behavior. Here are some practical examples. parks, travel
packages
Sex and Age Group Potential Product or Service Senior citizens (60 onwards) Products: Fruits and
Demand vegetables, hair dye,
Products: Trendy clothes, medicines
Male teenagers (13-19) rubber shoes, soft Services: Travel packages,
drinks, chips, health services
prepaid cellphone
load, short apparel
Services: Cool hangout
places, gyms,
barber shops
Single females (20-30) Products: Beauty products,
bags, clothes, Religion and ethnicity also should be taken to account
because these affect the way they buy products or avail services.

ENTREPRENEURSHIP 11

Examples are food choices, events and holidays, traditions and
beliefs, spending habits, and conservativeness.
The entrepreneur should include demographic items that he
or she thinks are relevant to the chosen business so that he can
accurately align worthwhile products or services to the customers.
PSYCHOGRAPHIC
Psychographic segmentation is a process of grouping
customers according to their perceptions, way of life, motivations,
and inclinations.
Perception is a process wherein and individual receives
external stimuli using the five senses of hearing, touching, smelling,
seeing and tasting. The customers’ way of life will give an
entrepreneur an overview of what products or services can best
suit the problems of the customers that happening on a daily basis.
KINDS OF PERSONS’ MOTIVATION
Physiological motivations – involve the needs of the person
(i.e., food, clothing, shelter) they seek to avoid pain and give
pleasure.
Psychological motivations – involve customers’ preferences
(what customer likes or dislikes).
OCTOBER
FACTORS THAT AFFECTS CUSTOMERS MOTIVATIONS
ASPIRATIONS -are what the customers want to achieve (e.
g., inner peace, financial stability, work life balance).
DEPRIVATION – involves the customer’s recognition of
certain voids to fill (e.g., lack of financial security, lack of love, lack
of knowledge). For example, let’s look at Jacob, who comes from a
low-income background. He wants to become one of the best
accountants, and so he aspires to go to one of the premier
universities in Manila to study accountancy. With this, he is
motivated to uplift his reputation and his personal value, as well as
his status on the society or his appreciation of other people.
GEOGRAPHIC
Geographic segmentation is simply grouping customers
according to their location. This is critical in the analysis of the
target market as this encompasses the cultures, beliefs,
preferences, politics and lifestyle of a certain geography.
Geographic segmentation can be a small street, a village, or a
barangay. It can also be based on municipality, city, province, or
region. It can be as big as a country or continent depending on the
entrepreneur’s business objectives.
ENTREPRENEURSHIP 12

NOTE: This segmentation matters more if the location
targeted have different sets of qualities mentioned previously. For
example, meat products such as pork can easily be sold in Region 3
(Central Luzon) and Region 4 (Cavite, Laguna, Batangas, Rizal, and
Quezon, or CALABARZON), but it will be difficult to sell in the
Autonomous Region in Muslim Mindanao (ARMM) and Region 12
or SOCCSKSARGEN (South Cotabato, Cotabato, Sultan Kudarat,
Sarangani, and General Santos City) because these regions differ in
religion. (Remember that Muslims do not eat pork.)
BEHAVIORAL
Behavioral Segmentation is the process of grouping the
customers according to their actions. These behaviors are
instigated by occasions, desired benefits, loyalty, and usage of
products or availment of services.
Occasions drastically affect the customers’ buying behavior.
the Christmas season entices the people to buy gifts. The Valentine
season encourages people to buy flowers and chocolates for their
special someone. The summer season elicits customers to go to the
gym to be fit, to the beaches and resort to beat the heat, to book a
trip for a summer getaway, or to buy summer outfits. Birthday and
graduations induce customers to go to buffet restaurants or hotels
and resorts to celebrate.
Desired benefits in behavioral segmentation is efficient
because the entrepreneur determines the exact needs of the
OCTOBER
customers and offer the most suited product or service for them.
Examples include offering wash, dry, and press services for busy
office workers in the city because they don’t have time to do this
chore, or offering 3-in-1 coffee for budget conscious customers and
those who prefer instant coffee.
Loyalty is the result of maintaining satisfied customers. The
goal of every entrepreneur is to inform, persuade, and remind
customers to buy the product or avail of the service consistently.
Therefore, behavioral segmentation through loyalty is a major key
result area of the entrepreneur as it is more expensive to sell to
new customers than to maintain customers.
Loyalty programs and rewards separate loyal customers
from the new ones.
Usage of product and availment of service is also a
behavior segmentation factor that describes to the entrepreneur
how often a product is being used or the service is being availed.
Therefore, he or she can group customers as light users, medium
users, or heavy users. For example, there are women who are
occasional users of makeup, and there are girls who wear makeup
every day. There are men who are occasional users of hair
products, and there are men who apply wax or gel on a daily basis.
MARKET AGGREGATION happens when an entrepreneur wants to
target a broader market as possible because the product or
service that the business offers is suited for an undifferentiated
market such as fruits, vegetables, rice, water, and bread, as well as
services such as haircut, plumbing, or transportation.
ENTREPRENEURSHIP 13
 OCTOBER

Married Couples with Kids (30- SERVICES:

50)

PRODUCTS:

WHAT HAVE I LEARNED SO FAR? Senior Citizens (60 onwards)

A. Aside from the examples given in the illustration of gender SERVICES:
and age group. Can you classify what possible products and services
can you offer to customers of different ages?

Sex and Age Group Potential Product or Service B. In the business you are interested to venture into, what
demand specific age and gender you are trying to target for your business?
PRODUCTS: why?

_______________________________________________________
Male teenagers (13-19) SERVICES: _______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
PRODUCTS: _______________________________________________________
_______________________________________________________
Single Females (20-30) _______________________________________________________
SERVICES: _______________________________________________________
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PRODUCTS: _______________________________________________________
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TALKING TO YOUR CUSTOMERS
MARKETING RESEARCH is a methodical way that will bring
the entrepreneur a substantial bunch of relevant ideas that can be
used to effectively run the business.
Marketing research should have:
A. solid objective which states the research purpose. From this
objective, you will identify the appropriate research activities, tools,
and samples that will set the scope and limitation of the research
project. When relevant research methodologies are already
defined, you should now identify the target market segment for the
research project, which should be dissected into key samples that
represent the target market segment.
B. Analyze proper timing for research execution. This is more
important because the entrepreneur will be able to get maximum
results when he or she identifies the respondent’s answering pace.
C. Establish a market research design that will effectively
implement the steps mentioned. Depending on the objective,
responses are either qualitative or quantitative.
OCTOBER
QUALITATIVE RESEARCH includes identifying the written or spoken
opinions of customers.
QUANTITATIVE RESEARCH involves analyzing the customers’
preferences by using relevant
statistics (such as those in surveys).
4 MOST COMMON METHODS OF COLLECTING DATA FROM THE
TARGET CUSTOMERS
1.) INTERVIEW -
is one of the most reliable and credible ways of getting relevant
information from the target customers. it is a face-to-face contact
between the researcher/entrepreneur and a respondent where the
researcher asks pertinent questions that will give him significant
pieces of information about the problem that he will solve. It is a
credible way of getting information because the researcher will be
able to capture not just verbal but also the nonverbal answers such
as facial expressions, character of words used, or body language. The
interview is also helpful even when the customers think about the
business.
2 TYPES OF INTERVIEW
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1. Unstructured interview is an informal type of interview the interview before allowing themselves to be interviewed.
and does not follow a Therefore, the researchers need to set a friendly tone and must
specific set of questions. The researcher has a checklist of high-level explain the rationale and the objectives in a clear
issues that he or she wants to clarify with the respondents. In this and nonintimidating way.
type of interview, the respondent can answer freely including
everything that he or she feels about the issues raised, so long as 2. Respondents indifference to how they share their opinions.
these are related to the questions being asked by the researcher. Introducing the interview is very important as this will set
The researcher usually records the conversation, review it, and the tone of the discussion. The entrepreneur,
summarizes the findings. The unstructured interview produces therefore, must establish a relaxed ambiance and must first
qualitative data. explain clearly why the interview is
conducted and how it will benefit the interviewee. The
2. Structured interview employs a specific set of questions and language must be the one that the interviewees use (usually
produces quantitative data. A prearranged questionnaire with informal, due to most interviewees being
specific questions usually answerable by yes or no (closed-ended), common folk); the length of the interview must be brief
forced ranking, multiple choice, or choose-the-best will be so as not to occupy much of their time; and the interview
answered by the respondents. Unlike the unstructured interview, a should be assured that the results be kept
structured interview does not allow the interviewer and the confidential and be presented summatively.
respondent o omit or add questions, nor change the sequence or
how the questions are worded. For both methods, the researcher 3. Getting unbiased answers from the respondents. There are
has to be very objective and avoid biases to come up with impartial factors for such a challenge.
answers. He or she should be able to raise relevant questions that First factor is the limited memory or forgetfulness of
can directly give appropriate answers to the research objectives. the respondents. The second factor is the difficulty
of the questions, giving the respondents a hard
time to answer relatively. The third factor is the
CHALLENGES IN CONDUCTING AN INTERVIEW environment they are in. Some respondents in
an interview may be influenced by relatives or peers who
1. Setting an appointment with an interviewee. It includes overhear the interview. Many Filipinos tend to be
asking the respondents permission. Some respondents can be courteous, telling what you want to hear instead of
skeptical and need to know the reputation of the one conducting what you need to hear. The researcher therefore must

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have an objective approach to the interview so as not to
affect the results.
2.) THE FOCUS GROUP DISCUSSION
It is a process of mining customer and noncustomer experience and
insights about a specific product or service. Through FGD, the
researcher will be able to generate relevant concerns and issues of
customers such as their views and inclinations toward a product or
service, perceptions or impressions on new product or service
models, innovations of the older product or service, inventive
concepts on promotions, price elasticity, and initial feedback of
customers on marketing tactics and advertisements. The
moderator task is not that of an interviewer who is asking a set of
questions. Instead, his or her role is to encourage a group of
participants to talk about a list of topics prepared prior to the FGD.
The moderator will direct the discussion in the right path, ensuring
all angles are covered and the discussion doesn’t go too far from
the topic. This is the reason that is called FGD, because the
discussion will be specifically focused on finding relevant answers
(e.g., strong branding or service preferences).
3.) OBSERVATION
It is one of the preferred and practical methods of generating ideas
because the researcher documents the behavioral patterns of
people or of objects or events without necessarily requiring them
OCTOBER
to participate in the research process. One method is to simply
watch and examine the customers’ behavior in their raw state
without biases and pretentions, thereby providing more accurate
results and faster process.
Observation is reliable because it allows the researcher to see the
real and actual behavior of customers rather than hearing what
they need to say (which may sometimes be biased, incomplete,
sugarcoated, or exaggerated). Therefore, it is not pushy as the
interview and the FGD.
TWO WAYS TO PERFORM OBSERVATION
1. Human Observation – human observer records information
as it occurs or as it happens using his or her five senses.
For example:
1. Customer purchase patterns. This human observation
technique uses the researcher to understand the buying behavior
of the customers such as determining their pain points, buying
patterns (i.e., how many times and how often do they buy or their
inclinations toward a product or service), location, price,
promotion.
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Application to a printing business: The human observer will
count and rank the type of printing jobs requested by the
customers per month (e.g., calendars, posters, student
publications, invitations). The objective is to analyze the pattern of
behavior of the printing business customers as to which months the
business should prepare for peak volumes.
2. Mystery shopping. This is a common practice of service
businesses today where the researcher pretends, he or she is a
customer of his or her own business or the competitor’s. This is a
test to determine the quality of the customer service or if the
service provider is doing the right job.
Application to a laundry business: The human observer will
bring his or her laundry bag to a competitor and validate if the
service provider piece counts the clothes and if the same will be
delivered completely.
2. Machine Observation – the machine observer employs an
equipment (e.g., video camera or computer) to record the
information needed.
Examples of machine observation:
1. Video cameras or closed-circuit television (CCTV). These
are positioned within the business premises. They record the
customers in their organic shopping or service behavior (e.g., how
OCTOBER
they examine the products, how they interact with the service
personnel).
Application to a gym business: The machine observer (video
camera) will record the behavior of gym members as to which gym
equipment is used more often. The objective is to understand if
there is queuing happen. This will help the gym owner to decide if
there is a need to add more gym equipment or remove the
equipment not being used often.
2. Traffic counters. These are very common machine
observers used by researchers to determine foot traffic or vehicular
traffic in a particular location. On the marketing side, the
researcher will be able to determine where to sensibly install a
tarpaulin, signage, or billboard, as these counters give a glimpse of
how many people or vehicles pass the area. These also provide the
researcher an idea where to find a strategic location for the
business.
3. Web Analytic. This is an online tool that tracks the
performance of a web site as to the number of visitors, the
content they usually access, and other information relevant to the
web site owner such as geographical locations of the visitors and
statistics on how long they stayed in the Wen site. This give a
glimpse of how many people or vehicle pass the area. These also
provide the researcher an idea where to find a strategic location for
the business.
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4. Barcode scanners. These machines help researchers
understand the purchase behavior of the customers by reading the
product codes and generate relevant sales information.
5. GPS Technology. This technology allows tracking of
vehicles and pedestrians exposed to out-of-home
advertisements.
3. TRADITIONAL AND ONLINE SURVEYS
SURVEY – is a process of getting answer from a sample of
respondents derived from a particular population. It is a very
simple and practical to run because it requires preparation of
predetermined questions answerable by definite responses using
‘tllltfvequitable scales.
Example of traditional ways to conduct a survey are:
• via telephone
• face-to-face interaction or snail mail
REFLECT UPON:
➢ How talking to customer help a budding entrepreneur to
start a business?
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ENTREPRENEURSHIP 20