Module 2

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ENVIRONMENT AND MARKET (EM)

Content Standards Performance Standards

The learner demonstrates The learner independently creates a


understanding of environment and business vicinity map reflective of
market in Contact Center Services in potential market in Contact Center
one’s province. Services in a province.

Quarter I Time Allotment: 4 hours

Module 2
Environment and Market

Introduction

Aspiring entrepreneur need to explore the economic, cultural, and social


conditions prevailing in an area. Needs and wants of the people in a certain
area that are not met may be considered business opportunities. Identifying the
needs of the community, its resources, available raw materials, skills, and
appropriate technology can help a new entrepreneur seize business
opportunities.

To be successful in any kind of business venture, potential


entrepreneurs should look closely at the environment and market. They should
always be watchful of existing opportunities and constraints, and to take
calculated risks. The opportunities in the business environment are factors that
provide possibilities for a business to expand and make more profit.
Constraints, on the other hand, are factors that limit business growth, hence
reduce the chance of generating profit. One of the best ways to evaluate
opportunities and constraints is to conduct a Strengths, Weaknesses,
Opportunities and Threats (SWOT) Analysis.

SWOT Analysis is a managerial tool used to assess the environment. It


is used to gather important information which is then used in strategic planning.
Strengths and weaknesses are internal in an organization. They relate to
resources owned by an organization that you have control over and also the
extent of its marketing.

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Opportunities and threats exist in the external environment.
Opportunities relate to the market, new technologies, and the external factors
such as government policies, climate, and trends. Threats replace what the
competitors are doing. It also includes legal and other constraints.

Now that you have read some important considerations to explore to be


successful in any business, you are now ready to explore more about the
environment and market.

To begin with, let’s find out the competencies that you will master as you
finish this module.

Objectives

At the end of this module, you are expected to:


 identify what is of “value” to the customer,
 identify the customer to sell to,
 explain what makes a product unique and competitive,
 apply creativity and innovative techniques to develop marketable
products, and
 employ a unique selling proposition (USP) to a product and/or
service.

Now that you have an idea about the things you will learn, take the first
challenge in this module – the pre-assessment.

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Pre-assessment

Task 1: Multiple Choice


DIRECTIONS: Choose the letter of the best answer. Write your answer on a
separate sheet of paper.

1. It is generated by examining the goods and services sold in the


community.
A. business creation C. business concept
B. business pricing D. business idea
2. It is a process of making new products which will be sold to the
customers.
A. product analysis C. product
development
B. product conceptualization D. product
implementation
3. These are luxuries, advantages and desires that every individual
considers beyond necessary.
A. wants C. requirements
B. desires D. needs
4. It is a factor or consideration presented by a seller as the reason that a
product or service is different from and better than that of the
competition.
A. unique selling plan C. unique pricing
policy
B. unique selling proposition D. finding value-added
5. A stage in which the needs of the target market are identified,
reviewed, and evaluated.
A. concept development C. project development
B. economic analysis D. refine specification
6. It is the introduction of new ideas to make the product and services
more attractive and saleable to the target customers.
A. new idea C. product development
B. creativity D. innovation
7. It is a managerial tool used to assess the environment and to gather
important information that can be used for strategic planning.
A. scanning C. WOTS Analysis
B. SWOT Analysis D. survey analysis

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8. It is creating names, symbol, or designs that identifies and
differentiates a product from the other products.
A. product naming C. branding
B. unique selling proposition D. tagline
9. It is a meaningful and unforgettable statement that captures the
essence of the brand.
A. product naming C. branding
B. unique selling proposition D. tagline
10. These are things that people cannot live without.
A. wants C. requirements
B. desires D. needs

Task 2: Guide Questions:

Directions: Read and study the guide questions below. Use a separate
sheet of paper to write your answer.

1. How does one determine the product or services to be produced


and/or to be provided to the target customers?

2. How does one select an entrepreneurial activity?

3. When can one say that a certain product has “value?”

4. Does applying creativity to your product or services important? Why?

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5. How can one effectively respond to the needs of the target customer?

6. From the viewpoint of business owner, discuss the importance of


scanning the environment and market in generating business ideas.

7. Using self-assessment, explain the level of your confidence in


formulating a business idea.

After all the guide questions are answered and skills have been
mastered, share insights/ideas with your classmates. Discuss your insights,
personal knowledge, and relevant experiences on the topic to make it more
exciting and engaging.

Learning Goals and Target

After reading and understanding the objectives of this module and


having gone through the pre-assessment and guide questions, you will be
asked to set your own personal goals. These goals will urge you to further
achieve the ultimate objective of this module. In the end, these goals will
motivate you to learn more about environment and market.

Goals and Learning


Ultimate Goal
Targets Activities

Figure 2: Strategic process to reach the objectives of this module

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Reading Resources and Instructional Activities

After setting your own personal goals and targets in achieving the
objectives of this module, you will have the opportunity to read and learn more
about environment and market. You will also be given a chance to do practical
exercises and activities to deepen your understanding of the topic.

Know

Product Development

When we talk of product development, we are referring to a process of


making a new product to be sold by a business or enterprise to its customers.
Product development may involve modification of an existing product or its
presentation, or formulation of an entirely new product that satisfies a newly-
defined customer’s needs, wants and/or a market place.

The term development in this module refers collectively to the entire


process of identifying a market opportunity, creating a product to appeal to the
identified market, and testing, modifying, and refining the product until it
becomes ready for production.

There are basic, yet vital questions that you can ask yourself about
product development. When you find acceptable answers to them, you may
now say that you are ready to develop a product and/or render services.
These questions include the following:
1. For whom are the product/services aimed at?
2. What benefit will the customers expect from product/service?
3. How will the product/service differ from the existing brand? From its
competitor?
In addition, needs and wants of the people within an area should also
be taken into big consideration. Everyone has his/her own needs and wants.
However, each person has different concepts of needs and wants. Needs in
business are the important things that an individual cannot live without in a
society. These include:
1. basic commodities for consumption,
2. clothing and other personal belongings,
3. shelter, sanitation and health, and
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4. education.

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Basic needs are essential to an individual to live with dignity and pride
in a community. These needs can obviously help you generate business ideas
and subsequently to product development.
Wants are desires, luxury and extravagance that signify wealth and
expensive way of living. Wants or desires are considered above all the basic
necessities of life. Some examples of wants or desires are: fashion
accessories, expensive shoes and clothes, travels, eating in an expensive
restaurant, watching movies, concerts, having luxurious cars, wearing
expensive jewelry and perfume, living in impressive homes, among others.
Needs and wants of people are the basic indicators of the kind of
business that you may engage in because it can serve as the measure of your
success. Some other points that might be considered in business undertakings
are the kind of people, their needs, wants, lifestyle, culture and tradition, and
their social orientation.
To summarize, product development entirely depends on the needs and
wants of the customers. Another important issue to deal with is the key
concepts of developing a product. The succeeding topic shall enlighten you
about the procedure in coming up with a product.
Concepts of Developing a Product
Concept development is a critical phase in the development of a product.
In this stage, the needs of the target market are identified, and competitive
products are reviewed before the product specifications are defined. The
product concept is selected along with an economic analysis to come up with
an outline of how a product is being developed. Figure 3 shows the stages of
concept development of a product.

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Identify Establish Generate Select a
Refine
Customer Target Product Product
Specifications
Needs Specifications Concepts Concept

Plan
Remaining
Analyze Development
Perform
Competitive Project
Economic
Products
Analysis

Concept
Development
Figure 3: Stages of Concept Development The

process of product development follows the following stages:

1. Identify customer needs: Using survey forms, interviews, researches,


focus group discussions, and observations, an entrepreneur can easily
identify customers’ needs and wants. In this stage, the information that
can be possibly gathered are product specifications (performance, taste,
size, color, shape, life span of the product, etc.). This stage is very
important because it would determine the product to be produced or
provided.
2. Establish target specifications: Based on customers' needs and
reviews of competitive products, you can now establish target
specifications of the prospective new product and/or services. A target
specification is essentially a wish-list.

3. Analyze competitive products: It is imperative to analyze existing


competitive products to provide important information in establishing
product or service specifications. Other products may exhibit successful
design attributes that should be emulated or improved upon in the new
product or service.

4. Generate product concepts: After having gone through with the previous

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processes, you may now develop a number of product

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concepts to illustrate the types of products or services that are technically
feasible and will best meet the requirements of the target specifications.

5. Select a product concept: Through the process of evaluation between


attributes, a final concept is selected. After the final selection, additional
market research can be applied to obtain feedback from certain key
customers.

6. Refine product specifications: In this stage, product or services


specifications are refined on the basis of input from the foregoing
activities. Final specifications are the result of extensive study, expected
service life, projected selling price among others are being considered in
this stage.
7. Perform economic analysis: Throughout the process of product
development, it is very important to always review and estimate the
economic implications regarding development expenses, manufacturing
costs, and selling price of the product or services to be offered or provided.

8. Plan the remaining development project: In this final stage of concept


development, you can prepare a detailed development plan which
includes list of activities, necessary resources and expenses, and
development schedule with milestones for tracking progress.

Finding Value

People buy for a reason. There should be something in your product or


service that would give consumers a good reason to go back and buy more.
There must be something that will make you the best option for target
customers; otherwise, they have no reason to buy what you are selling. This
implies further, that you offer something to your customers that will make them
value your product or service.

The value you incorporate in your product is called value proposition.


Value proposition is a believable collection of the most persuasive reasons why
people should notice you and take the action you’re asking for. It is what gets
people moving, what makes people spend for your product or service.

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Innovation
Innovation is the introduction of something new in your product or
service. This may be a new idea, a new method, or a new device. If you want
to increase your sales and profit, you must innovate. Some of the possible
innovations for your products are change of packaging, improvement of taste,
color, size, shape, and perhaps price. Some of the possible innovations in
providing services are application of new and improved methods, additional
featured services, and possibly freebies.

Unique Selling Proposition (USP)

Unique Selling Proposition is the factor or consideration presented by a


seller as the reason that one product or service is different from and better than
that of the competition. Before you can begin to sell your product or service to
your target customers, you have to sell yourself in it. This is especially important
when your product or service is similar to your competitors.
USP requires careful analysis of other businesses' ads and marketing
messages. If you analyze what they say or what they sell, not just their product
or service characteristics, you can learn a great deal about how companies
distinguish themselves from competitors.

Here's how to discover your USP and how to use it to increase your sales and
profit:

 Use empathy: Put yourself in the shoes of your customers. Always


focus on the needs of the target customers and forget falling in love with
your own product or service. Always remember, you are
making/providing this product not for yourself but for the target
customers to eventually increase sales and earn profit. Essential
question such as what could make them come back and ignore
competition, should be asked to oneself. Most possible answers may be
focused on quality, availability, convenience, cleanliness, and reliability
of the product or service.
 Identify customer’s desires. It is very important for you to understand
and find out what drives and motivates your customers to buy your
product or service. Make some effort to find out, analyze and utilize the
information that motivates the customers in their decision to purchase
the product or service.

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 Discover customer’s genuine reasons for buying the product.
Information is very important in decision making. A competitive
entrepreneur always improve their products or services to provide
satisfaction and of course retention of customers. As your business
grows, you should always consider the process of asking your
customers important information and questions that you can use to
improve your product or service.

Process

To enhance your understanding of the topic previously presented, you


will be tasked to form a group and arrange an interview with a successful
entrepreneur or practitioner. You have to document this interview and present
this to the whole class for reflection and appreciation.

Task 3: Interview
Directions: Select a successful entrepreneur or practitioner. Conduct an
interview using the set of questions below. Document the interview and present
it to the class. Use a separate sheet of paper.

1. How did you identify your customers?

2. What were your considerations in selecting your customers?

3. Explain how your product or service became unique to other products.

4. Did you consult somebody before you engaged in this business?


Cite / give sample insights that you gained from the consultation.

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5. What were your preparations before you started the actual business?

6. What creative and innovative techniques did you adapt in the


development of your product or service? What was the effect of the
innovative techniques to the sales and profits of your business?

7. What strategy did you consider to create a unique selling proposition to


your product or service?

Reflect and Understand

Task 4: Browsing the Internet

Directions: To deepen your understanding of the lesson, perform the


following tasks:

1. Browse the internet and view the topics related to:


a. customers’ needs and wants
b. techniques in identifying customers’ needs and wants
c. creativity or innovations in products and services
d. unique selling proposition
e. product development

2. Prepare a short narrative report about these topics and discuss it to the
class. You can highlight the aspect that intensifies your knowledge of
product development.

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Transfer

Task 5: Product Conceptualization

Directions: In a separate sheet of paper or in your notebook. Develop your


own concept of your product or service by using the figures on this page. Use
bullets in every stage of product conceptualization in listing important key ideas.

1. Identify
Customers Need
7. Prepare a 2. Target
-
Development Plan Specifications
-
- -

- -

6. Refine Product 3. Analyze a


Specification Competitive
Product
-
-
-
-

5. Select A product 4. Generate Product


Concept Concept

- -

- -

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Know

Generating Ideas for Business

The process of developing and generating a business idea is not a


simple process. Some people come up with a bunch of business ideas that are
not really feasible. There are two problems that arise; first is the excessive
generation of ideas that can forever remain as a dreaming stage and the
second is when they don’t have ideas and don’t want to become entrepreneurs.

The most optimal way is to have a systematic approach in generating


and selecting a business idea that can be transformed into a real business.
Here are some basic yet very important considerations that can be used to
generate possible ideas for business:

1. Examine existing goods and services. Are you satisfied with the product?
What do other people who use the product say about it? How can it be
improved? There are many ways of improving a product from the way it is
made to the way it is packed and sold. You can also improve the materials
used in crafting the product. In addition, you can introduce new ways of
using the product, making it more useful and adaptable to the customers’
many needs. When you are improving the product or enhancing it, you are
doing an innovation. You can also do an invention by introducing an entirely
new product to replace the old one.

Business ideas may also be generated by examining what goods and


services are sold outside the community. Very often, these products are
sold in a form that can still be enhanced or improved.

2. Examine the present and future needs. Look and listen to what the
customers, institutions, and communities are missing in terms of goods and
services. Sometimes, these needs are already obvious and identified right
away. Other needs are not that obvious because they can only be identified
later on, in the event of certain development in the community. For example,
a province will have its electrification facility in the next six months. Only by
that time will the entrepreneur could think of electrically-

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powered or generated business such as photo copying, computer service,
digital printing, etc.

3. Examine how the needs are being satisfied. Needs for the products and
services are referred to as market demand. To satisfy these needs is to
supply the products and services that meet the demands of the market. The
term market refers to whoever will use or buy the products or services, and
these may be people or institutions such as other businesses,
establishments, organizations, or government agencies.

There is a very good business opportunity when there is absolutely no


supply to a pressing market demand.

Businesses or industries in the locality also have needs for goods and
services. Their needs for raw materials, maintenance, and other services
such as selling and distribution are good sources of ideas for business.

4. Examine the available resources. Observe what materials or skills are


available in abundance in your area. A business can be started out of
available raw materials by selling them in raw form and by processing and
manufacturing them into finished products. For example, in a copra-
producing town, there will be many coconut husks and shells available as
“waste” products. These can be collected and made into coco rags or
doormats and charcoal bricks and sold profitably outside the community.

A group of people in your neighborhood may have some special skills that
can be harnessed for business. For example, women in the Mountain
Province possess loom weaving skills that have been passed on from one
generation to another. Some communities set up weaving businesses to
produce blankets, decorative, and various souvenir items for sale to tourists
and lowlanders.

Business ideas can come from your own skills. The work and experience
you may have in agricultural arts, industrial arts, home economics, or ICT
classes will provide you with business opportunities to acquire the needed
skills which will earn you extra income should you decide to engage in
income-generating activities. With your skills, you may also tinker around
with various things in your spare time. Many products are invented this way.

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5. Read magazines, news articles, and other publications on new
products and techniques or advances in technology. You can pick up
new business ideas from magazines such as Newsweek, Reader’s Digest,
Business Magazines, “Go Negosyo”, Know About Business (KAB)
materials, and Small-Industry Journal. The Internet also serves as a library
where you may browse and surf on possible businesses. It will also guide
you on how to put the right product in the right place, at the right price, and
at the right time.

Key Concepts of Selecting a Business Idea

Once you have identified business opportunities, you will eventually see
that there are many possibilities available for you. It is very unlikely that you will
have enough resources to pursue all of them at once.

You have to select the most promising one among hundreds of ideas. It
will be good to do this in stages. In the first stage, you screen your ideas to
narrow them down to about few choices. In the next stage, trim down the
choices to two options. In the final stage, choose between the two and decide
which business idea is worth pursuing.

In screening your ideas, examine each one in terms of the following


guide questions:

1. How much capital is needed to put up the business?


2. Where should the business be located?
3. How big is the demand for the product? Do many people need this
product and will continue to need it for a long time?
4. How is the demand met? Who are processing the products to meet
the needs (competition or demand)? How much of the need is now
being met (supply)?
5. Do you have the background and experiences needed to run this
particular business?
6. Will the business be legal and not against any existing or
foreseeable government regulation?
7. Is the business in line with your interest and expertise?

Your answers to these questions will be helpful in screening which ones


among your many ideas are worth examining further and worth pursuing.

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Branding

Branding is a marketing practice of creating a name, a symbol or design


that identifies and differentiates product or services from the rest. It is also a
promise to your customers. It tells them what they can expect from your product
or service and it differentiates your offerings from other competitors. Your brand
is derived from who you are, who you want to be and what people perceive you
to be.

Branding is one of the most important aspects in any business. An


effective brand strategy gives you a major edge in increasingly competitive
markets.

A good product can:


- deliver message clearly,
- confirm credibility,
- connect to target prospect,
- motivate buyers, and
- concretize user loyalty.

Here are simple tips to publicize your brand:

 Develop a tagline. Write a statement that is meaningful,


impressive, and easy to remember to capture the essence of your
brand.

 Design a logo. Create a logo symbolic of your business and


consistent with your tagline and displace it strategically.

 Write a brand message. Select a key message to communicate


about your brand.

 Sustain a brand quality. Deliver a promise of quality through your


brand.

 Practice consistency. Be reliable and consistent to what your


brand means in your business.

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Process

In generating a business idea, you should first identify the type of


business suited to your business idea. You should analyze and scan the
potential environment, study the marketing practices and strategies of your
competitors, analyze strengths, weaknesses, opportunities, and threats in your
environment to ensure that the products or services you are planning to offer
will be patronized and within easy reach of target consumers.
How to conduct SWOT Analysis:

 Be realistic about the strengths and weaknesses of your business


when conducting SWOT Analysis.

 SWOT Analysis should distinguish between where your business is


today, and where it can be in the future.
 SWOT Analysis should always be specific. Avoid any gray areas.
 Always apply SWOT Analysis in relation to your competition,
i.e. better than or worse than your competition.
 Keep your SWOT Analysis short and simple. Avoid complexity and
over analysis.
 SWOT Analysis is subjective.

Task 6: SWOT Analysis

Directions: In a separate sheet of paper or in your notebook list down all your
observations for your business idea. Categorize your observations according
to strengths, weakness, opportunities and treats. After carefully listing them
down, use the stated strategies to come up with a sound analysis, activities and
best business idea.

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Strength (S) Weaknesses (W)

- -
- -
- -
- -
- -
- -
Opportunities (O) Threats (T)

- -
- -
- -
- -
- -
- -

Strategies:

 SW - Maximize on the Strengths to overcome the internal Weakness.


 OW - Capitalize on the Opportunities to eliminate the internal
Weakness.

 ST - Maximize on your Strengths to eliminate the external Threats.


 OT - Take advantage of the available Opportunities to eliminate the
external Threats.

Analysis:

Activities:

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My Best Business Idea:

Reflect and Understand

To deepen your understanding of the topics previously discussed, you


will be asked to perform the following activities:

Task 7: Extra Reading and Video Viewing

Reading books and watching videos have been considered as some of


the most effective educational activities that can help learners broaden their
understanding on a certain topic. In this particular task, you will be asked to
conduct extra reading and video viewing on the Internet with the following
topics:
A. Steps in selecting a business idea
B. Criteria of a viable business idea
C. Benefits of a good brand
D. Ways on developing a brand

After successfully performing the assigned task, make a narrative


report about it and share it with the class.

Transfer

Task 8: Designing a Logo

Directions: In a separate sheet of paper or in your notebook draw a logo that


you will use in your business. Provide a simple statement to describe your logo.

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Logo

Tagline

Task 9: Making My Own Vicinity Map

Directions: In a separate sheet of paper or in your notebook draw a vicinity


map reflective of potential market in Contact Center Services in your province.
Provide a simple statement to describe your map.

Vicinity Map

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