• Entrepreneurial concepts and • Scanning of the environment

principles • Physical environment

• Entrepreneurial • Societal environment
characteristics • Industry environment
• Entrepreneurial skills • Internal environment

Entrepreneurial Business
competency competency

Competitive
advantage
and
distinctive
advantage
Nature and
form of the
business to
open

Who is
the
market?
.
Market Identification
Market Segmentation is an entrepreneurial
marketing strategy designed primarily to divide the
market into small segments with distinct needs,
characteristics, or behavior (Kotler & Armstrong,
2014).
The entrepreneur must divide the total market and
focus his/her business strategy to a smaller market
is considered homogeneous or have similar interest,
preferences, needs, wants, and other related
variables. This entrepreneurial approach is
sometimes called niche entrepreneurial marketing.
Geographic Segmentation – divides the total market according
to geographical locations in the Philippines like provincial
regions, cities, provinces, municipalities, and even barangay
units. When dividing, the following must be considered.
 Climate
 Dominant ethnic group
 Culture
 Density (either rural or urban)
 Classification of the geographical unit (e.g. first class,
second class, etc.)
Demographic Segmentation – divides the market based on the
demographic variables of the customers. The common
demographic variables are the a) Gender, b) Age, c) Income, d)
Occupation, e) Education, f) Religion, g) Ethnic group, h) Family
size.
The most widely used and easiest method for segmenting the
market is the demographic method. Various researches have
also determined that there exists a direct relationship between
demographic variables and the needs and wants of the
customers.
Psychological Segmentation – divides the market in terms of
what the customers think and believe. It is based on the
following variables
• Needs and wants
• Attitude
• Social class
• Personal traits
• Knowledge and awareness
• Brand concept
• Lifestyle
Behavioral Segmentation – divides the market based on the
following variables:
• Perceptions
• Knowledge
• Reactions
• Benefits
• Loyalty
• Responses
 Market targeting is a stage in market identification
process that aims to determine the set of buyers
with common needs and characteristics. They are
the market segment that the entrepreneurial venture
intends to serve.
Market Segment Evaluation
Factors to consider in evaluating the market:
1. Size of the segment and its expected growth
2. Existing and probable structure of the segment
3. Capability of the business
Segmentation Matrix
Market Segmentation Matrix is an analytical
business tool that allows you to see how
various segments have performed with a
set of products.
Segmentation Matrix
The size of the segment is usually expressed in
terms of estimated product demand, while the
expected growth may be expressed in terms of
potential profitability of the segment.
Segmentation Matrix
The forces of competition may be classified as
strong, moderate, or weak.

The force is considered strong when the barriers to

it are generally weak or low. In contrast the force is
considered weak when the barriers are strong.
Segmentation Matrix
Potentia Substitu Power Capabili Priority
Power
Seg l New te of the ty of the of the
Size Growth of the
ments Entrant Product Supplie Busines Segmen
Buyer
s s r s t
Segmen
3.0 M 52 Strong Weak Strong Strong Low No. 2
t1
Segmen
1.0 M 32 Weak Weak Weak Weak High No. 1
t2
Segmen
t3
Segmen
t4
Market Segment Selection
The number of segments to serve determines the
appropriate entrepreneurial marketing strategy to
use. Generally, the entrepreneur can select one
segment or all segments of the total market with
different entrepreneurial marketing strategies.
Market Segment Selection
The basic entrepreneurial marketing strategies relative
to the selected segment are the following:
1. Individual or one-on-one marketing
2. Segmentation marketing (differentiated or
concentrated) marketing
3. Mass or undifferentiated marketing
Market Segment Selection
Individual or One-on-One Marketing
- the business provides a product that is suited
or fitted to the particular needs of the customers. It is
based on the concept that the consumers have
different needs and wants (Ex. Tailoring shop).
Market Segment Selection
Differentiated Marketing
– is a variation of the segmentation marketing
strategy. Here the entrepreneur covers several
segments of the total market and designs a particular
product for each segment based on the market
segment evaluation and the capability of the business
Market Segment Selection
Concentrated Marketing
– sometimes called niche marketing is another
variation of segmentation marketing where the
business selects only a few segments but intends to
serve a large number of customers in the chosen
segments. This set of customers is the niche.
Market Segment Selection
Mass or Undifferentiated Marketing
– it takes to consideration the fact that the
customers have common needs and wants. The
entrepreneur does not have to differentiate them
according to their needs and wants but rather
assumes that his/her product will cater to all types of
customers in general (Ex. Refined sugar).
 The term positioning simply refers to the act of
occupying a certain place. There are conceptual
differences between business positioning and product
or market positioning.
 Business Positioning
simply refers to the process of determining
the place of the business in the industry.
 Market Positioning
refers to the process of arranging a product to occupy
a clear, distinct, and desirable place in relation to
other competing products in the mindset of target
consumers (Kotler & Armstrong, 2013).
 “
How is the product viewed by the
consumers in the market? Is it a superior or
inferior product? Is it reasonably priced or
not?

“
The process of determining the market position of the
product includes the following steps:
1. The entrepreneur determines if the market
position is distinct from others.
2. The entrepreneur evaluates the advantages or
benefits of every possible market position.
The process of determining the market position of the
product includes the following steps:
3. The entrepreneur decides on the market position.
Two major dimensions that will differentiate the product
from its competitors in the market:

Lower prices

More benefits
The positioning or perceptual map show the position of
similar products competing in the market as perceived
by customers.
 Once the target position in terms of price and
quality dimensions has been evaluated, the
entrepreneur determines the advantages, benefits, and
attributes of the product. There are no specific rules on
how many attributes or benefits the product must have.
The following criteria may be considered in identifying
the attributes or benefits to be promoted:
1. Identifiable
2. Beneficial
3. Distinctive advantage
4. Efficient and rewarding
 Two basic dimensions that must be seriously
considered in deciding the market position of the
product
Price

Quality
Questions to consider in deciding the market position
of the product:
1. Will the product be sold at a higher price due to
its attributes and benefits?
2. Will the product be sold at the same price as the
competitor’s price in spite of its benefits?
Questions to consider in deciding the market position
of the product:
3. Will the product be sold at the same price as the
competitor’s because they have similar benefits?

4. Will the product be sold at a lower price because

it offers less benefits?

5. Will the product be sold at a higher price even if it

offers less benefits?
Normally, a product sold at a lower price is expected to
be of inferior quality and offers less benefits, while a
product sold at a higher price is expected to be of
better quality and offers more benefits.
ANSWER THE FOLLOWING QUESTIONS:
1. It is a strategic marketing approach and process that is intended to
define the specific customer of the product.
2. Other term for concentrated marketing.
3. It is an entrepreneurial marketing strategy designed primarily to divide
the market into small segments with distinct needs, characteristics, or
behavior.
4. A market segmentation that divides the market in terms of what the
customers think and believe.
5. One of the market segment selection that provides a product that is
suited or fitted to the particular needs of the customers.
6-7 Two basic dimensions that must be seriously considered in deciding the
market position of the product.
8 – 10 Give at least 3 criteria in identifying the attributes or benefits to be
promoted in a product.