Scanning the Market Environment.pptx

Scanning the Market Environment

1. Determine what method of market segmentation will be used for the following items. We have Climate Change. ________________ Target customers are from 13-25 yrs old. ________________ Customers prefer Branded items (US Levi’s ). ________________ This product is good for my health . ________________ Most People in the community are Roman Catholic ________________ Geographic Demographic Psychographic Behavioral Demographic

2. Scanning the Market Environment

3. Scanning the marketing environment Scanning the marketing environment is the starting point of any new venture that involves understanding and knowing the complexity of the environment. Through scanning the environment, an entrepreneur can recognize various opportunities and understand thoroughly the arena where the future business will operate.

4. Seeking, screening, seizing The 3S of opportunity spotting and assessment is the framework that most of the promising entrepreneurs use to finally come up with the ultimate product or service suited for a specific opportunity. An opportunity is an entrepreneur’s business idea that can potentially become a commercial product or service in the future.

5. S1: seeking the opportunity Opportunity seeking is the first and is the most difficult process to the number of options that the entrepreneur will have to choose from. It involves the development of new ideas from various sources:

6. Macro-environmental sources STEEPLED – This is a mnemonic for sociocultural, technological, economic, environmental, political, legal, ethical and demographic factors. This represents the general environment where the entrepreneur can identify business opportunities from and where the future business is about to operate.

7. 2. INDUSTRY This is the source of current trend on what is happening in the industry where the future business will belong to. Ex. An entrepreneur wants to engage into rice retailing, he or she should know the nature and the happenings of the rice industry. 3. NEW DISCOVERY OR KNOWLEDGE These are new trends that can be the core business model of a new venture.

8. 4. FUTURISTIC OPPORTUNITIES These are the projected new opportunitie s that can possibly affect the new business while it is running. Ex. Sari-sari stores in the future will be able to incorporate financial transactions such as accepting bills payment and process remittances.

9. Micro-market sources 1. Consumer preferences, interests and perception These are the current needs and wants of the potential customers that should be discovered right away by an entrepreneur.

10. 2. COMPETITORS Recognizing and understanding potential competitors will aid the entrepreneur to develop a product or service that is unique and will surely stand out on the competition. 3. UNEXPECTED OPPORTUNITIES FROM CUSTOMERS Oftentimes, the most brilliant ventures come from the most unexpected opportunities . Existing problems often give rise an unexpected opportunity.

11. 4. IRRITANTS IN THE MARKETPLACE SUCH AS DETERENTS, PROBLEMS, COMPLAINTS, AND DELAYS Entrepreneurs see opportunities in situations where there is a recurring problem or sometimes when there is no more hope in solving the problem. 5. TALENTS, HOBBIES, SKILLS, and EXPERTISE Business opportunities do not just come from outside forces but also from within the entrepreneur. The entrepreneurs’ talent, hobbies, skills, and expertise can be a good source of opportunity.

12. 6. LOCATION Often, entrepreneurs just have to look at their ecosystem and they will be able to spot a business opportunity right away. EX. School

13. Methods in generating ideas 1. FOCUSED GROUP DISCUSSION (FGD) A moderator handles a very open , free flowing, and in depth discussion with a group of people who can provide insightful ideas about a new product or service that will fill a market need . 2. PROBLEM SOLVING ANALYSIS This is similar to the FGD except that the participants are already given an inventory of product or service problems . The participants will just identify from the list given the compelling problems of a potential product/service instead of generating new ideas.

14. 3. BRAINSTORMING Similar to FGD, brainstorming is an activity that allows the participants to share creative ideas using the following rules No destructive criticism or judgment allowed Wilder ideas are accepted More ideas are preferred Improvement of others’ ideas is allowed 4. BRAINWRITING OR INTERNET BRAINSTORMING This is exactly the same as brainstorming except that the channel used is not face-to-face , but in writing or online

15. Macro-environmental sources STEEPLED ANALYSIS The result of the STEEPLED scan will aid the entrepreneur in deciding what product or service to set up and whether this new venture will succeed or not. It can help the entrepreneur to check if there is a compelling business opportunity or threat.

16. SOCI0-cultural factors These factors represent a general view of a locality’s traditions, customs, beliefs, norms and perceptions. These factors affects how a person of the locality behaves and reacts to marketing and selling activities. The entrepreneur should take note of the following sociocultural factors: Health consciousness Educational level Attitudes towards imported goods and services Attitudes toward the person’s lifestyle Attitude toward product quality and customer service Attitudes toward saving and investing Emphasis on safety Buying habits Religion and beliefs

17. Technological factors These are composed of innovations of an existing technology or an invention. Entrepreneurs should always be up-to-date with the technological changes, as these are catalysts in improving a product or service or replacing them entirely. The entrepreneur should take note of the following Technological factors : Basic infrastructure Rate of technological change Spending on research and development Technology incentives Legislation regarding technology Communication infrastructure Access to newest technology Internet infrastructure and penetration

18. Economic factors These factors plays a vital role in scanning of marketing environment because economic factors directly affect any business venture. These factors include income, expenses, and resources, that can influence the cost of doing and generating income. The entrepreneur should take note of the following Economic factors : Exchange rates Unemployment trends Labor Cost Stages of Business Cycle Trade flows and patterns Level of consumers’ disposable income Monetary policies Price fluctuations Stock Market Trends

19. Environmental or ecological factors The scan of these factors will help the entrepreneur determine if the business he or she is entering into will comply with the environmental standards or will just be a hazard to people, animals, and nature. The entrepreneur should take note of the following Environmental or ecological factors : Weather Climate Change Laws regulating environmental pollution Air and water pollution Recycling Waste management Attitudes toward “green” or ecological products Endangered Species Attitudes toward and support for renewable energy

20. Political factors These factors are mostly induced by the government policies and administration s, which can have a strong effect in the entrepreneur’s business. The entrepreneur should take note of the following Political factors : Government Stability and likely changes Corruption level Tax policy Freedom of press Rule of Law Government Effectiveness Political Rights

21. Legal factors Related with political factors, legal factors are government laws and regulations that can restrict or allow business activities. The entrepreneur should take note of the following Legal factors : Copyright, patents/intellectual property rights Consumer protection Employment law Health and Safety law Data protection law

22. Ethical factors These are the factors that will serve as an entrepreneurs’ guide on how to be ethical in running the business The entrepreneur should take note of the following Ethical factors : Ethical advertising and sales practices Accepted accounting, management, and marketing standards Attitude toward counterfeiting and breaking patents Attitude toward development and well-ding of employees

23. DEMographic factors These are the characteristics of the people in the target market. The entrepreneur should take note of the following Demographic factors : Population growth rate Age distribution and life expectancy rates Gender distribution Social Classes Family size and structure Minorities

24. S2 screening the opportunity It is a process of cautiously selecting the best opportunity. The selection will depend on the entrepreneurs’ internal intent , i.e. the main objective that the business will accomplish in the entrepreneur’s life external intent which will address the compelling needs of the target. The entrepreneur should apply due diligence and independent judgement in selecting the opportunities that have a potential and eliminate those that are not within the scope of the entrepreneur’s risk appetite. Risk appetite refers to the entrepreneurs’ tolerance of business risks.

25. TIME must be considered by the entrepreneur in screening the opportunities at hand, as it is considered of the most critical resources of an entrepreneur . Time should only be devoted to worthwhile opportunities. Therefore, entrepreneurs must always be sharp-eyed for real opportunities . They must be able to intelligently say no to low compelling opportunities and proceed with sensible ones .

26. T he most important elements that are always present in a opportunity. The entrepreneur should say no to an opportunity if it does not contain any of these business opportunity elements: Has superior value to customers Solves a compelling problem, issue, a need or a want Is a potential cash cow Matches with the entrepreneur’s skills, resources, and risk appetite.

27. S3: seizing the opportunity This is the “publishing through ” with the chosen opportunity. Entrepreneurs should make the best out of this opportunity , and they should exert effort and dedication for the future success of the new venture.

28. Product or service planning and development process In the seeking process , one opportunity stood out from a number of sources. The opportunity was tested according to its attractiveness and feasibility in the screening process. The last process, called product or service planning and development process.

29. i. Idea stage In this stage, the entrepreneur determines what are the feasible products or service that will perfectly suit the opportunity. Usually, a market evaluation is conducted by the entrepreneur to assess whether the new product or service ideas will be accepted by the market using values and benefits to consumer metrics. On the other hand, the value of the new products and services should also be assess if these will benefit the entrepreneur. Product and services that are unappealing to the market should be eliminated at this stage.

30. II. Concept stage In this stage the developed idea will undergo a consumer acceptance test. This test includes getting the initial reactions of the primary target market and the distribution channel. Conversational interviews are conducted to understand consumer preference on physical characteristics and attributes of a produ ct or the physical evidence of a service. Both favorable and unfavorable results will be used to devise an acceptable product or service. This will also be used to compare new idea with the competition with regard to the superiority or inferiority .

31. III. Product development stage In this stage, the entrepreneur leverages on the information generated from the prospective customers via the concept stage . Actual reactions from prospective customers are determined. The entrepreneur will conduct a consumer panel where the actual product samples or actual service samples will be given or rendered to panel of potential customers. The participants’ task is to critique the actual product or service and record the good qualities and inferior attributes . They are also given samples of competitors’ products or services for comparative purposes .

32. IV. Test marketing stage This stage validates the work done from the first three stages to measure success in the commercialization of the product or service. Actual sales results will be the foundation of the customer’s acceptance level and will be the basis in commercializing the product or service

33. Recognizing the potential market is really one of the most difficult task to do. It involves tedious research and research to ensure success. Once the 3s of opportunity spotting and assessment have been diligently done. The entrepreneur should now be ready to prepare a comprehensive business plan that covers the marketing, operations, and financial plans