venture might happen

CHAPTER 1: UNDERSTANDING ● Inherent in an

ENTREPRENEURSHIP entrepreneurial
venture
DEFINITION ● Risk cannot be
eliminated but
minimized
ENTREPRENEURSHIP - process and
willingness of a person to develop, organize and
manage a business, by offering a product or
service along with its risks in order to make a profit. IMPORTANCE OF ENTREPRENEURSHIP

ENTREPRENEUR - “Entreprende” French word

“to undertake” (1723) implies the qualities of
leadership, initiative, and innovation in a new
venture.

ENTERPRISE - a business venture

SALIENT FEATURES

Art of ● Not a science (no

correct absolute rules or SOURCES OF ENTREPRENEURIAL IDEAS
practices steps) ● Entrepreneurial process of creating a
● Creativity (undergoes
new venture
enhancements,
creates new ideas)
● Dynamic / change is 1. Creating of entrepreneurial idea
constant (innovation) a. Interest, passion, likes, etc.
2. Identification of entrepreneurial
Wealth- ● Wealth-creating opportunities.
creating (entrepreneur) while
a. Needs and wants
venture income-generating
(for ordinary 3. Opening of entrepreneurial venture
businessperson) a. New business

Providing ● Value is subjective SOURCES OF ENTREPRENEURIAL IDEAS

Values to (seen in different
Customer perspective)
1. Changes in the Environment
s ● Anyone can sell
goods or services in a. Physical, societal, industry, business
exchange for money 2. Technological Discovery and
but anything of NO Advancement
VALUE is a waste a. Online selling platforms
b. Robotics
Opening ● Ownership
c. Scientific and medical field
and ● Setting of goals and
managing attaining it d. Techie gadgets
own 3. Government Thrust, Programs, Policies
business a. Community Markets
b. Business modification
Risk ● A possibility that c. DTI price regulation
Taking something unpleasant
4. People’s Interest
 a. Baking
SKILLS AND CORE COMPETENCIES
b. Gaming
c. Cooking
d. Cosmetics SKILLS
e. Online Selling ● The totality of knowledge, practice or
5. Past experiences experience an aptitude of a person
● Personal abilities to do things well
ENTREPRENEURIAL SKILLS
CHARACTER TRAITS COMMON TO ● Cognitive skills, technical skills,
SUCCESSFUL ENTREPRENEURS
interpersonal skills

ACHIEVEMENT CLUSTER CHAPTER 3: THE ENVIRONMENT OF THE

(OPPORTUNITY-SEEKER) ENTREPRENEURIAL VENTURE

● “success”/ ● Committed
“desire to be an ● Persistent
achiever” ● Risk-taker
● Does not settle ● Efficient and
for mediocrity Quality Oriented
● Aspires for
quality

PLANNING CLUSTER
(INFORMATION-SEEKER)

● “Goal-setting” ● Goal-setter
/”managing” ● Systematic
● Supports the planner and
character mentor
traits in the ● S.M.A.R.T.
achievement (Specific,
cluster Measurable,
● Plans and Achievable/Attaina
reviews the ble, Relevant,
daily Timeliness/
activities time-bound)

POWER CLUSTER (NETWORKER)

● “Relationship ● Optimistic LESSON 1: THE PHYSICAL ENVIRONMENT

” ● Self-confident
● To and from External - the first layer of the entrepreneurial
the
environment
customers,
suppliers,
competitors, WILDLIFE
employees, ● habitat/nature
government ● FLORA (indigenous plants in an ecosystem
and other of a geographical region) and FAUNA
stakeholders (group of indigenous animals of any
geographical region)
 ● Ensures that his/her business contributes to
(legislative branch)
the preservation and not destruction of the
ecological system
● “Social responsibility”
LESSON 3: THE INDUSTRY ENVIRONMENT
PHYSICAL RESOURCES
● Raw materials (resources used by a
★ The Micro Environment (6 C’s)
company to produce its finished goods and
products)
● Elements inherent in earth Government/ Any group has an actual
● Determines product cost Publics or potential interest and
impact in an
● Ensure abundance/sufficiency
organization in
achieving its goals
CLIMATE (COMMUNITY)
● Weather (normally changes from time to
time - season - climate change) Suppliers Provide the
● Threatens the business resources and the resources/raw materials
needed in producing
business itself
goods and services
● Determines the viability of certain business (COMPLEMENTARIES)
● *strawberry farm - La Trinidad Benguet
Customers Most important factor of
all, they made up the
market
LESSON 2: THE SOCIETAL ENVIRONMENT (CUSTOMERS/CONSU
MERS)
★ The Macro Environment (PESTEL) Competitors Other business with
similar goods an
services offered
(COMPETITORS)
Political Broader and bigger
policies (executive and Employees All the levels of
juidiciary) management (top,
middle and high work as
Economic Wealth and resources
one to achieve a goal)
Socio- - Relationships (COMPANY)
Cultural and interactions
Creditors and -Helps the company
among people in
Intermediaries financially (banks,
groups
cooperatives etc.)
- Symbols,
-helps the company
language,
promote, set and
norms, values,
distribute g&s
and artifacts
(CHANNEL)
Technological Trends and
developments in
computer and
information technology The Macro and Micro Environmental Factors -
Professor Philip Kotler
Ecological Environmental policies,
climate change
Macro Factors - indirectly influence the company’s
Legal specific /regional laws operation and are mostly uncontrollable
Micro Factors - directly influence the company’s can demand higher prices or better terms,
operation and are somewhat controllable which can affect a business’s profitability

● Threat of Substitution - This force

LESSON 4: INDUSTRY ANALYSIS SCANNING considers the availability of alternative
TOOLS products or services that can fulfill the same
need. If there are many substitutes, it can
INDUSTRY ANALYSIS limit the pricing power and profitability of a
● is a tool enables a company to understand business.
its position relative to other companies that
produce similar products or services
● Helps the analyst develop strong sense of
what is going on in the industry

SWOT MODEL - Albert humphrey

Helps you build on what you do well to address
what you’re lacking, to minimize risks, and to take
the greatest possible advantage of chances for
success.

COMPETITIVE FORCES MATRIX - helps you

establish your company”S competitive advantage.
Find opportunities to innovate with new or improved
products, services and marketing strategies.

FORCES OF COMPETITION MODEL - “5 forces

of Competition” Helps explain why various
industries can sustain different levels of profitability

● Competitive Rivalry - This force assesses

the intensity of competition among existing
businesses in the industry. The more
intense the competition, the harder it may
be for a new entrepreneur to enter and
succeed in that market
LESSON 5: NATURE AND TYPE OF
● Threat of new entry - this force examines ENTREPRENEURIAL VENTURE
how easy or difficult it is for new businesses
to enter the industry. If it’s easy for
newcomers to start competing, it can erode FORMS OF ENTREPRENEURIAL VENTURE
profitability for existing businesses.

● Supplier Power - suppliers provide the

resources needed for a business to operate
when suppliers have significant power, they
SOLE PROPRIETORSHIP - one owner who enjoys
the profits and suffers the liabilities
● Easy to form
● Simple business operation
● Limited resources
● Limited growth
● Unlimited liability
PARTNERSHIP - two or more owner called
“partners”, profits and losses are shared or divided
among the partners
● Partners contribute either money,
property, or skills
● Easily dissolved if one partner dies
CORPORATION - formed by at least 5 to 15
persons called the “incorporators” who are
authorized to act as a separate, legal entity
● Stock or non-stock
● Profit or non-profit
● domestic/foreign
PRODUCTION SYSTEM (IPO MODEL)
INPUT
● Manpower
● Materials
● Machine
● System design
● Instructions
PROCESS
● “Transformation of production process”
● Manpower (human resource)
● Method (process or technique used to
convert raw materials to final products)
● Machine (machineries and equipments)
● Materials (raw materials)
- Cost, quality,availability,
suppliers, credibility and wastage
OUTPUT
● The final product ready for distributions
to the others
MARKET IDENTIFICATION: STP PROCESS
Market Identification Process - To be successful
in business a firm must have the sensemaking
skills to identify and capitalize better than their
competition otherwise it would leave a potential
space for competition to enter and win it.
CORE STRATEGY - (segmentation, targeting, and
positioning)
● It is a business’s overall game plan for
reaching people and turning them into
customers of their product or service
LESSON 1: MARKET SEGMENTATION
Market - It is composed of individuals or
organizations with the ability and willingness to
make purchases to fulfill their needs and wants
Market Segment - A subdivision or part of an
overall market with specific and distinctive
characteristics that cause them to have similar
products needs.
Market Segmentation - The process of dividing or
grouping the market or customer into segments or
groups that have common, similar or identifiable
needs that will respond similarly to a marketing
action.
- Key Question: “How many partitions/Groups
are there in the market?”
4 APPROACHES TO SEGMENTING THE
MARKET (Geographical - Demographic -
Behavioral - Psychographic)

1. Needs and Wants Segmentation
(Geographical)
● Segmentation is done on the basis
of the geographical location of the
customers
● Based on the premise that people
living in one area have different
purchasing or buying habits than
those living in other areas of the
country.
● Also, the factors like climatic zone,
state, region, constitutes geographic
segmentation.
➢ Region (country, nation,
state)
➢ Population (urban, rural)
➢ City size (population size,
growth rate)
➢ Climate (climatic pattern)
2. Socio-Demographics Segmentation
(Demographics)
● Such segmentation is based on the
premise that a customer's buying
behavior is very much influenced by
his demographics, and moreover,
these variables can be measured
easily as compared to the other
factors.
● This means dividing the customer
market on the basis of several
variables such as:
➢ Age
➢ Gender
➢ Income
➢ Occupation
➢ Education
➢ Family size
➢ Family life cycle
➢ Religion
3. Consumer-Behavior Segmentation
(Behavioral)
● The marketer segments the market
on the basis of the individual’s
knowledge about the product and his
attitude towards the usage of the
product.
● Several behavioral variables are
occasions, benefits, user statues,
usage rate, buyer readiness stage,
loyalty status and the attitude.
● Often, the market is segmented on
the basis of the usage rate of the
customers, such as light, medium
and heavy users.
● The buyers can be classified as
those:
➢ Who buy the product or
services occasionally, or
➢ Who buy only those products
from which they derive some
sort of benefits.
➢ Ex-users, potential users,
➢ First-time users and
➢ Regular users
4. Psychographics Segmentation
(Psychographic)
● It relates to and individual’s:
➢ Personality, Lifestyle,
Attitude, Interest, Opinion,
etc.
● Here the companies segment the
market on the basis of interest,
activities, beliefs and opinions of the
individuals.
● It is believed that the consumer
buying behavior can be determined
by his:
1) Personality (referts ti traits,
attitudes and habits of an
individual and the market is
segmented according to the
personal traits such as
introvert, extrovert,
ambitious, aggressiveness,
etc) and;
2) Lifestyle (lifestyle means the
way of a person lives his life
and do the expenditures)
LESSON 2: MARKET TARGETING
Target Market
- A group of consumers or organizations who
are most likely to buy a company’s products
or services.
- The part where the business evaluates and
selects one or more segment
- Key Question: “Who is going to buy the
product?”
1. Criteria size
2. Difference
3. Money
4. Accessible
5. Focus on different benefits:
ENTREPRENEURIAL MARKETING STRATEGIES
- Individual (One on One)
- Segmentation Marketing (Differentiated
or Concentrated)
- Mass (Indifferentiated) Marketing
1. Individual (One on One) Marketing
● Products are tailored to the needs of
the individual consumers
- Customization - Customer
has the opportunity to
customize the product to
what the want
- Personalization - knowing
what the customer wants
then tailor the product to their
preference
2. Differentiated Marketing
● Variation of segments, targeting
different markets with different
products
● Products are designed based on the
specific needs of a particular
segment
3. Concentrated Marketing
● Only one or few segments but
targets its large share
● Product design is for the majority of
the consumers in the segment
market
4. Mass Marketing
● Products are mass produced for the
whole market
● Consumers are undifferentiated
● Basic commodities
LESSON 3: MARKET POSITIONING
Positioning (Perceptual Map)
- Process of developing a marketing mix that
puts the product in a unique position to the
targeted segments for attracting potential
buyers.
- Know the business’s core brand or value
proposition.
- Key Question: “How will the product be
Perceived?”
THE MARKETING MIX
(Master of the 4 P’s of Marketing)
- Product
- Place
- Price
- Promotion
IMPORTANCE OF MARKET POSITIONING
1. As the interface between brand identity
and brand image
- Brand identity in the marketplace
depends on positioning.
2. As a source of competitive advantage
- Better marketing positioning will give
the company a competitive
advantage over other firms on the
market.
3. Market Differentiation with Positioning -
Positioning breaks the clutter of noise
- There are plenty of products, and
the number of firms delivering them
is several. Positioning will help a
 forum to stand out in the crowd of
sellers.
4. Positioning Makes Buy Easy for
Customers
- Consumers want easy solutions and
options to make purchase decisions.
MARKETING MIX
The set of elements that businesses consider to
successfully CREATE and SELL their product
A combination of factors, set of tactics or actions
that a company can control and use to influence
CONSUMERS to PURCHASE its products.
PRICE - provides and ensures the revenue of the
company
The following variables high influence pricing:
● Availability of competing products
● Cost of making the product
● Stages of the product in the market
● Demographic profile of the target market
PLACE - a.k.a DISTRIBUTION, determines where
the target customers and when product will be
available for them
PROMOTION - communicative elements, what
customer use to make purchasing decisions
● Advertising
● Publicity
● Personal Selling
● Sales Promotion
● Direct Marketing
PEOPLE - the right people inside (employees) and
outside (suppliers) of your business who are
responsible for every elements of your business
activities
PACKAGING - the way a product or service
appears from the outside
Basic purpose: Protect product from damage,
spillage and spoilage
POSITIONING - place or space occupied by the
product in the minds of the consumers
How products are seen and thought about their
customers is the critical determinant of success in a
competitive marketplace
INTEGRATED MARKETING MIX- blended
harmoniously to influence the consumers to
purchase the product
 BRANDING STRATEGY

Umbrella Brand Approach

● All products carry the same brand name

House Brand Approach

● Every product has separate brand name

BRANDING EXTENSION STRATEGY

Line Extension Approach

● Modify or alter existing product

Brand Extension Approach

● New product of the same brand in the

category

Brand Equity - the added value that a product or

service receives from being linked with a specific
brand. This value can be demonstrated as
customer reaction to and engagement with the
brand, in addition to through pricing, market share,
and business profitability.

— Reviewer from STE12-6P