Chapter 1-3: Entrepreneurship

Market Identification

A marketing approach and process intended to define the specific customer of the product by segmenting, targeting, and positioning.

Market Segmentation

An entrepreneurial marketing strategy designed to divide the market into smaller segments with distinct needs, characteristics, or behavior.

Heterogeneous

Describes a market composed of diverse customers with various characteristics, behavior, culture, traditions, and needs.

Homogeneous

Describes a smaller market segment where customers have similar interests, preferences, needs, wants, and other related variables.

Niche Entrepreneurial Marketing

An entrepreneurial approach where the business focuses on serving a homogeneous market segment that matches its competencies.

Geographic Segmentation

Dividing the market according to geographical locations like provincial regions, cities, provinces, municipalities, and barangay units.

Demographic Segmentation

Dividing the market based on demographic variables such as gender, age, income, occupation, education, religion, ethnic group, and family size.

Psychological Segmentation

Dividing the market based on what consumers think and believe, including variables such as needs, wants, attitudes, social class, personality traits, knowledge, awareness, brand concept, and lifestyle.

Behavioral Segmentation

Dividing the market based on variables such as perceptions, knowledge, reactions, benefits, loyalty, and responses.

Market Targeting

A stage in the market identification process aimed at determining the set of buyers with common needs and characteristics that the entrepreneurial venture intends to serve.

Market Segmentation Evaluation

The process of evaluating market segments based on size, expected growth, segment structure, and business capability.

Segmentation Matrix

A tool used to facilitate the segmentation process by assessing segment size, growth, and competitive forces, which may be strong, moderate, or weak.

Individual or One-on-One Marketing

A marketing approach where products are tailored to the needs of individual customers.

Segmentation Marketing

The process of dividing the market into distinct segments and developing strategies to serve each segment effectively.

Differentiated Marketing

A strategy where several segments are covered, and products are designed to suit the specific needs of each segment.

Concentrated or Niche Marketing

A strategy focusing on one or few segments, designing products for the majority of consumers within those segments.

Mass or Undifferentiated Marketing

A strategy where products are mass-produced for the entire market without differentiation among consumers.

Positioning

The act of occupying a certain place in the industry or market by arranging a product to occupy a clear, distinct, and desirable place in the mindset of target consumers.

Business Positioning

The process of determining the place of the business within the industry through industry analysis.

Market Positioning

The process of arranging a product to occupy a clear, distinct, and desirable place in the mindset of target consumers, after identifying the particular segment to serve.

Identifiable

The attribute or benefit of a product that is easily associated with it and recognized by consumers.

Beneficial

An attribute or value that provides valuable benefits to the target consumers.

Distinctive Advantage

An attribute that is unique to the product and difficult for competitors to copy.

Efficient and Rewarding

An attribute where the cost of attaching value to the product is lower than the expected benefits in terms of profit.

Feasibility Study

Serves as the forerunner of the business plan to determine whether the proposed business is feasible in all areas.

Business Plan

A detailed and integrated written document that describes the various activities involved in opening and operating a new entrepreneurial venture, serving as the roadmap of the business.

Test of Possibility and Test of Feasibility

The process of testing a new business idea to obtain positive outcomes before creating a business plan.

Test of Possibility

Ensures that the new business idea produces positive results to proceed to the feasibility test.

Test of Feasibility or Viability

Determines whether the proposed business is feasible in all areas and whether it should proceed to the business plan phase.

Introduction

Presents the general perspective of the business, including its name, address, ownership structure, description, location, funding requirements, and sources.

Sole Proprietorship

A business owned and operated by one individual.

Partnership

A business owned by two or more individuals who share profits and liabilities.

Corporation

A legal entity separate from its owners, with limited liability.

Incorporators

Individuals who originally formed a corporation, including their names, nationalities, and addresses.

Executive Summary

Highlights the overall business plan as a bird’s-eye view, written last but placed after the introduction.

Business Model

Defines the business’s structure, production, operation, and financial activities to achieve its vision, mission, goals, and objectives.

Business and Product Positions

Describes how the business defines its course and accumulates wealth.

Wealth Improvement Approaches

Methodologies or approaches taken to maintain competitive advantage, improve market share, and maximize resource utilization.

Parties Supporting the Business

Includes consumers, creditors, suppliers, employees, and staff who have a direct relationship with the business.

Environmental Analysis

A strategic tool that determines external and internal factors affecting the business, which may be political, economic, social, or technological.

Global Analysis

An assessment of overall global trends and their impact on the business.

Political Factors

Government stability, policies, and trade regulations that can affect the business.

Economic Factors

Economic growth, inflation, interest rates, and exchange rates that influence business performance.

Socioeconomic Factors

Demographics, cultural trends, and income distribution that affect consumer behavior.

Technological Factors

Innovation, automation, and digital infrastructure that impact business operations.

Ecological Factors

Climate change, resource scarcity, and sustainability considerations affecting the business.

Industry Analysis

Examines industry trends, consumer needs, competitors, market forecasts, and market position to inform strategic planning.

Industry Trends

Current and emerging shifts in the sector that may influence business decisions.

Consumer Analysis

Assessment of the needs, preferences, and behavior of target customers.

Competitor Analysis

Evaluation of competitors' strengths, weaknesses, and strategies.

Market Forecast

Projected size, growth, and opportunities within the market.

Market Share, Position, and Strategy

Analysis of the business's current market standing and planned actions to improve it.

Business Description

Provides information about the business's nature, form, current status, and future plans.

Merchandising

Buys and resells tangible goods.

Service

Provides intangible offerings like skills and expertise.

Manufacturing

Transforms raw materials into finished products.

Agriculture

Cultivates crops or raises livestock.

Hybrid Business

Combines multiple business natures, such as manufacturing and retail.

Organization Plan

Describes the business’s organizational structure, capital requirements, liabilities, management skills, government intervention, and financing needs.

Limited Liability

Limits the owner's liability to their financial contributions, protecting personal assets during business dissolution.

Unlimited Liability

Allows creditors to pursue the owner’s personal property if the business fails to settle its financial obligations during dissolution.

Production Plan

Describes activities related to producing goods, including scheduling, processes, equipment, materials, and costs.

Operation Plan

Outlines activities from raw material acquisition to product delivery, including inventory control, shipment, and support functions.

Marketing Plan

Includes the 7Ps of marketing (Product, Plan, Price, Place, Promotion, People, Packaging, Positioning) to detail how the business will reach target consumers.

Financial Plan

Compiles and describes financial data, including projected income, cash flows, financial position, and financial statement analysis.

Behavior

The reaction of consumers to changes happening in the environment that influence their buying decision.

Consumer Buying Behavior

The reaction of consumers to various events or forces in the business community that contribute to the decision process.

Cultural Factor

The distinct cultures of various ethnic or racial groups influencing their perceptions, attitudes, value systems, and religions which affect their buying behavior.

Social Factor

The relationships consumers maintain or establish within society, shaped by their social class, roles, and affiliations with various social groups.

Personal Factor

The personal characteristics of the buyer, including age, occupation, income, and lifestyle.

Psychological Factor

Consumers' perceptions, beliefs, and attitudes shaped by their specific experiences with particular products.

Marketing Mix

A tool used by entrepreneurs to position the product in the market to deliver it to consumers and convince them of its benefits.

Product

Tangible goods or intangible services offered by the business to satisfy consumers’ needs or wants better than competing products.

Price

The amount charged for a product, which reflects the business's goal of profit while consumers seek value for money.

Broad Price Strategy

Ensures that pricing decisions are coordinated with other sellers, including strategies like penetration and skimming pricing.

Penetration Pricing

Setting low prices to attract customers and gain market share.

Skimming Pricing

Setting high prices initially to maximize profit from early adopters before gradually lowering them.

Price Strategies

Methods to accomplish company goals of gaining profit, including cost-based, demand-based, and competition-based pricing.

Cost-Based Pricing

Setting prices based on production costs plus a desired profit margin.

Demand-Based Pricing

Adjusting prices according to consumer demand and willingness to pay.

Competition-Based Pricing

Setting prices based on competitors' pricing structures.

Customary Pricing

Maintaining price over an extended period of time.

Variable Pricing

Adjusting prices based on cost fluctuations or differences in demand.

One-Price Policy

Charging the same price to all customers under similar conditions.

Flexible Pricing

Varying prices based on the customer’s ability to negotiate or buying power.

Odd Pricing

Setting prices at levels slightly below even values.

Price-Quality Association

High price represents high quality, and low price represents low quality.

Prestige Pricing

Setting price floors above which customers perceive high-quality products.

Leader Pricing

Selling key items at low prices to gain consumer loyalty.

Multiple-Unit Pricing

Offering discounts for buying in large quantities.

Price Lining

Selling different models with varying quality and features at different prices.

Price Bundling

Offering a basic product, options, and customer service for one total price.

Unbundled Pricing

Selling individual components separately, allowing customers to choose what to buy.

Geographic Pricing

Setting prices based on the buyer's location relative to the seller.

Price Adjustment

Changing prices due to cost fluctuations, competition, or consumer demand.

Place

The location where the target consumers are willing to purchase the product, which may be physical or virtual.

Strategic Place

A location considered suitable for the business’s product distribution based on its unique requirements.

Direct Distribution Channels

Movement of goods from manufacturer to final user without independent middlemen.

Indirect Distribution Channels

Movement of goods or services through independent intermediaries before reaching the final user.

Exclusive Distribution

Limited outlets for high-end or luxury products.