WEEK 10

Ave Maria College

SENIOR HIGH SCHOOL DEPARTMENT
School ID No. 402686 Gov’t Permit No. 0059 s. 2015

LESSON 5: DEVELOPING A BUSINESS PLAN: IDENTIFYING THE MARKET NEED

Self-Assessment:

1. First Stage Inspiration Process

Instruction: Answer the matrix below for the basic information of the micro business you would like to
engage.

Questions Answer

A. What is your line of business?

B. What is the brief description of your project?

C. What is your product/service?

D. Who are your target customers?

E. How many is your target customers?

F. How does your product differ from others?

Now that you have thought of the business you wanted to pursue, based from your activity 1, try to have
a self-analysis which is adapted from entrepreneur.com about your business concept.

2. Second Stage Inspiration Process

Instruction: Mark check on the column to which you think is the answer to the questions.

QUESTIONS YES NO MAYBE

1. Do you like or enjoy your product/service?
2. Is there a benefit from your product or service?
3. Do you see yourself excited about this product/service?
4. Would you buy it and use it yourself?
5. Would you sell it to your mother, your best friend, your next-
door neighbor?
6. Can you see yourself selling this product or service for the next
five to 10 years?
7. Is this a product or service that you intensely desire to bring to
the marketplace?
8. Will the customers benefit from this product or service?
9. Is there a demand for my product/service?
10. Is my estimated price reasonable?
11. Is the demand large enough to make a profit?
12. Is it easy to manufacture the product or provide the service?
13. Do I know how to make/do this product/service
 14. Is it easy to promote this kind of product/service?
15. Is it easy to get enough people to manufacture the product or do
the services?
16. Do I have a competing industry?
17. Is it easy to sell my product/service?
18. Is my product/service a real need in today’s market?
19. Is my product or service better than anything else currently
available?
20. Do you think you could become the number-one supplier in the
market for this product or service?

For a product or service to succeed, it must be the right product, being sold at the right time, to the right
customer, in the right market. It must be produced and sold by the right company, and the right people. What
you have to decide is this: Is this product right for you?

A. Market Need
Businesses should start by knowing the consumer's interests, desires, and needs. It is easier to sell what
consumers want and need than try to sell something they do not see the benefit in buying. In a fast-
moving world, it should be a competitive edge having the chance of monitoring the market, detecting
what can be a source of a profitable new business. Market needs inform organizations about what
products develop, for what customers, at what cost, through which distribution channels, reducing the
uncertainty that a new product/service development always brings with it.

Creating your marketing plan should be a top priority. The top priority for a marketing plan is
identifying the largest group of potential buyers for your products or services. Within that group exists
smaller segments, and it has unique needs that you might decide to run specific marketing campaigns
for.

Size of Market This is the group of people who are likely to buy your product or service.
Unless you are in a very specific niche, you want to find a large group of
buyers. For example, if you want to put up a bakeshop with a target market
of 3,000 individuals of different ages
Understand Your Customer In order to determine the size, you need to understand who your ideal
Profile customer is. For instance, based from the given example on your bakeshop
where a person/individual who loves to eat freshly baked breads and hot
pandesal.
Personal Similarities in Often, the group you're targeting has similarities when you look at the
Market personal lives of those in that group. This includes marital status, education
levels, type of career, as well as family size and income levels. As to the
bakeshop example most of the consumers have similarities like customers
aging 50-70 prefers to buy flat taste breads than teenagers who prefers tasty
or flavourful breads
Consider Cultural A marketing plan should consider the geographic and cultural elements of
Components your target group. These could have a significant difference on how what the
buyers want to buy or even how they buy it.
Special Interests of Needs Marketing plans have become more dynamic with the expansion of social
media and digital marketing. As a business owner, you can learn about the
 size of your market, based on very specific information. Essentially you can
segment your market to enable you to develop marketing campaigns that
target specific buyers. For example, if you own a pet store that caters to
parrot owners, you probably don't want to target cat owners
Market Research is a critical component when you’re launching a product, try to improve your
existing service, or when you’re just looking to be a step ahead of your
competitors. It will provide you with all the information you need to make a
better business decision

There are 5 things that market research can do for you in the process of product development & business
growth:

1. It is crucial for a better understanding of your customers.

Market research will help you map out the full profile of your ideal customer. Knowledge of your
customers will help you determine the market size and what triggers them to buy. You’ll gain valuable
insights like their age, location, gender & income, which will help you in creating effectively tailored
marketing and pricing campaigns.

2. Knowledge about your competitors, and how they approach the market.
Market research will help assess the market to identify both key players and those on the rise.
Furthermore, it will help you find the weaknesses in your competitor’s approach. These are gaps that
you can utilize to gain more customers. You can also learn what performed the best for the competition.
In turn, you will be able to think more creatively while modelling your new strategy.

3. Treating your product before launch

Testing is a very important part of learning what works before jumping into the business world. Every
business decision should be tested before fully exposing to your target audience. By market testing your
idea or product, you will save yourself from additional expenses and most importantly, from delivering a
bad product to the marketplace.

You can never be 100% sure that your product will instantly connect with your potential customer. With
market research, you’ll find out what approach you should take when marketing the product. You’ll also
find the key message that resonates with clients.

4. You won’t go out of business

It is not the strongest or the most intelligent who will survive but those who can best manage change.‖ —
Charles Darwin.

So, in order to remain in business and stay relevant, you should not only anticipate change, but you need
to be able to predict change too. That’s how good your market research needs to be!

5. Business Growth
Market research helps you comprehend the demands of your customers, detect more business
opportunities, plan the perfect marketing campaign, minimize losses, and keep track of the competition.
It allows organizations to classify their objectives while following the current trends and take advantage
by reaching out to their target audience.
 Identifying problems before they happen is crucial if you want to grow. Effective market research will
not only help you predict some of the pitfalls that can occur but also it will save you a lot of money too.
Your solution may look like a proper market fit, but if it’s not the case, you’re in big trouble.

The process of market research itself is designed to reduce the risk and to make the marketing strategy
cost-effective for your business.

Choosing a Product or Service to Sell.

To succeed as an entrepreneur, you must develop the ability to select and offer the right products or
services to your customers in a competitive market. More than any other factor, your ability to make this
choice will determine your success or failure.

There are thousands of products and services available to consumers today. And there are unlimited
opportunities for you to enter the marketplace and compete effectively with a new product or service
that's better in some way than what's already being offered by your competitors. Remember, your skill at
choosing that product or service is critical to your success.

The most important thing you can do before deciding what to sell is to think. And the more you think
about a product or service before you bring it to market, the better your decisions will be.

So how do you start? To make a product successful, you must be personally and emotionally committed
to its success. Once you've got a product or service in mind, you need to begin with a self-analysis.

How to Make Sure There’s a Market for Your Business Idea

1. Accept the market as a harsh, but fair judge.
If you're in business, you simply need to embrace the reality that the market will ultimately dictate
your success. That means you have to make sure the numbers support your idea.

2. Pick proven categories, then find your niche.

Broad proven categories typically offer greater opportunities than hot new markets.

3. Focus on wallet share, not market share

Broad proven categories typically offer greater opportunities than hot new markets.

4. Put your ideas to the test.

Better to pay the price in terms of time and effort now in order to learn what you don't know about
your market and buyer. The response you get will tell you what buyers in your market want, need
and desire. You can then use that information to enhance your offering or to discover a more
profitable market and business than you initially conceived

B. Customer’s Profiling
Customer profiling involves gathering and analyzing detailed information about customers to create
profiles or personas that represent different segments of the customer base. This helps businesses
 understand their customers' needs, preferences, behaviors, and demographics, allowing them to tailor
their marketing strategies, products, and services more effectively.

Key Components of Customer Profiling:

1. Demographic Information:
o Age
o Gender
o Income
o Education level
o Occupation
o Marital status
2. Geographic Information:
o Location (city, state, country)
o Climate
o Urban or rural setting
3. Psychographic Information:
o Interests and hobbies
o Lifestyle choices
o Values and attitudes
o Personality traits
4. Behavioral Information:
o Purchase history
o Frequency of purchases
o Brand loyalty
o Preferred shopping channels (online, in-store)
o Response to marketing campaigns
5. Technographic Information:
o Device usage (smartphones, tablets, computers)
o Preferred social media platforms
o Online behavior and preferences

Benefits of Customer Profiling:

 Personalized Marketing: Helps in creating targeted marketing campaigns that resonate with specific
customer segments.
 Improved Customer Experience: Allows businesses to tailor their products and services to meet the
unique needs and preferences of different customer groups.
 Increased Customer Loyalty: By understanding and addressing customer needs better, businesses can
foster stronger relationships and loyalty.
 Optimized Product Development: Insights from customer profiles can guide the development of new
products and services that better meet market demands.
 Enhanced Competitive Advantage: Knowing the customer better than competitors can lead to more
effective strategies and a stronger market position.

Methods of Customer Profiling:

 Surveys and Questionnaires: Collect direct feedback from customers about their preferences and
behaviors.
 Customer Interviews: Gain deeper insights through one-on-one conversations with customers.
 Data Analysis: Use data from customer transactions, website analytics, and social media interactions to
identify patterns and trends.
 Customer Relationship Management (CRM) Systems: Leverage CRM tools to track and analyze
customer interactions and history.