Entrepreneurial Mindset: Business Ownership, MSME Classification, and Marketing Concepts

Vocabulary flashcards covering legal ownership structures, small business definitions, MSME classification thresholds, and core marketing concepts.

Ownership (Philippine Civil Law)

Under Art. 427 of the Civil Code, ownership is defined as the independent and general power of a person over a thing for purposes recognized by law and within the limits established thereby.

Sole Proprietorship

A form of business ownership characterized by single ownership of an enterprise where there is no legal separation between the company and the owner, making the owner receive all profit but liable for all debts and losses.

Partnership

A formal arrangement by two or more parties to manage and operate a business and share its profits.

General Partnership

A type of partnership in which all parties involved share the liabilities and profits equally.

Limited Liability Partnership

A business structure with at least one general partner who has full liability and active management, and one or more limited partners who have limited liability up to their investment and no management control.

Corporation

A legal entity created by individuals, stockholders, or shareholders that exists as a separate legal structure from its owners and is recognized under state laws to operate a business for profit.

Certificate of Incorporation

An official document issued by the Securities and Exchange Commission (SEC) that brings a corporation into legal existence as an independent entity with perpetual existence.

Cooperative

Member-owned, democratic organizations that offer limited liability, shared costs, and equitable profit distribution (patronage dividends) with the primary purpose of serving their members and community.

Department of Trade and Industry (DTI)

The Philippine government agency responsible for registering sole proprietorships.

Securities and Exchange Commission (SEC)

The Philippine government agency responsible for registering partnerships and corporations.

Cooperative Development Authority (CDA)

The Philippine government agency responsible for registering cooperatives.

Table 1: MSME Classification

A classification table from the Senate Planning Economic Office categorizing enterprises as Micro, Small, or Medium based on asset size and number of employees.

Micro Enterprise

An enterprise classified as having an asset size up to ₱3,000,000 and 1 to 9 employees.

Small Enterprise

An enterprise defined by the DTI as having 10 to 99 employees and total assets valued between ₱3,000,001 and ₱15,000,000.

Medium Enterprise

An enterprise classified as having 100 to 199 employees and total assets valued between ₱15,000,001 and ₱100,000,000.

Market Share Approach

An approach to defining a small business based on the percentage of total sales in a market that a company controls.

Total Asset Approach

An approach to defining a small business based on the total monetary value of assets owned by the business organization.

Manufacturing Business

A type of business involved in the conversion of raw materials into finished products needed by society, such as bakeries and restaurants.

Service Business

A business that provides intangible expertise, labor, or assistance to customers rather than physical products.

Wholesaling

Activities of persons or establishments that sell products to retailers and other merchants but do not sell in large amounts to final consumers.

Retailing

Activities involved in the sale of goods and services directly to final consumers.

General Construction Firms

Businesses engaged in the construction of buildings for private individuals or firms.

Marketing

The process of telling people why they should choose a product or service, encompassing all activities undertaken by a company to promote and facilitate buying or selling.

Core Marketing Concepts

The foundational pillars driving marketing activities, which include needs/wants/demands, products, value/satisfaction/quality, exchange/transactions/relationships, and markets.

Needs

Fundamental requirements for survival or essential social and individual needs, such as food, clothing, safety, and belonging.

Wants

Specific items or experiences that satisfy a need, shaped by a person's culture, personality, and environment.

Demands

Human wants that are backed by purchasing power.

Product

Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.

Customer Value

The customer's judgment of whether a product is worth acquiring based on what they receive versus what they sacrifice compared to alternative choices.

Customer Satisfaction

The extent to which a product's perceived performance matches a buyer's expectation.

Total Quality Management (TQM)

Programs designed to constantly improve the quality of products, services, and marketing processes.

Exchange

The act of obtaining a desired object from someone by offering something in return.

Transaction

A trade between two parties involving at least two things of value, agreed-upon conditions, a time of agreement, and a place of agreement.

Relationship Marketing

The process of creating, maintaining, and enhancing strong, value-laden relationships with customers and other stakeholders.

Market

The set of all actual and potential buyers of a product or service.

Target Market

A specific group of consumers at which a product or service is aimed.

Market Segmentation

The strategic process of dividing a broad target market into smaller, distinct subgroups of consumers who share common characteristics, needs, or behaviors.

Geographic Segmentation

Grouping customers based on defined geographical boundaries, such as region, country, population, or climate.

Demographic Segmentation

Grouping customers based on personal attributes, such as age, gender, nationality, ethnicity, occupation, income, social class, family size, religion, and education.

Psychographic Segmentation

Grouping customers according to lifestyles, personality, values, attitudes, opinions, and interests.

Behavioral Segmentation

Grouping customers based on actual customer behavior toward products and services, such as brand loyalty, benefits sought, user status, usage rates, occasion, and readiness to buy.

Marketing Mix (4Ps)

A mixture of ideas and promotional plans consisting of Product, Price, Place, and Promotion, popularized by Neil Borden in the 1950s.

Product (4Ps)

The physical item, service, or offering that a business plans to offer to satisfy target customer needs.

Price (4Ps)

The amount of money that a business charges customers for a product or service.

Place (4Ps)

Refers to how and where products will be distributed, including distribution channels and physical or online storefronts.

Promotion (4Ps)

Activities such as advertising, selling, sales promotions, public relations, direct marketing, sponsorship, and guerrilla marketing designed to generate interest and inform consumers.