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ENTREPRENEURSHIP
LEARNER'S ACTIVITY SHEET
Quarter 3 – Week 3:
Recognize a potential market
and analyze the market need
ENTREPRENEURSHIP – Grade 11
Learner's Activity Sheet
Quarter 3 – Week 3: Recognize a potential market and analyze the market need
First Edition, 2021

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LEARNER’S ACTIVITY SHEET IN ENTREPRENEURSHIP

FOR 2nd Semester – QUARTER 3, WEEK 3

Name: _______________________________________ Grade & Section: _______________________

School: ______________________________________ Teacher: ________________________________

Competencies: Recognize a potential market and analyze the

market need

Learning Objectives:

1. Identify potential market and the market need.

2. Determine the possible products/ services you could
offer to the market to meet the need.
3. Show interest in identifying potential market and
market need.

I. Explore
Directions: Read and analyze the statements below.
Determine whether the statement is TRUE OR FALSE.
Write TRUE if the statement is correct and write FALSE if
otherwise. Write your answer on the space provided.

___________1. A market is any place where two or more parties can meet to
engage in an economic transaction and should only involve legal
tender.
___________2. Market includes retail stores and other similar businesses that
sell individual items to wholesale markets selling goods to other
distributors but may not be virtual.
___________3. Market refers to the whole area of operation of demand and
supply.
___________4. A market signifies any arrangement in which the sale and
purchase of goods take place.
___________5. Market establishes the prices for goods and other services.
___________6. Markets are unified.
___________7. Markets can be controlled.
___________8. In business, research is not required.
___________9. Knowing your customer is very important.
___________10. Knowing your market/target customer is one of the priorities
in having business.
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II. Learn

What is it?
What is MARKET?

Market, a means by which the exchange of goods and services

takes place as a result of buyers and sellers being in contact with one
another, either directly or through mediating agents or institutions.

Markets in the most literal and immediate sense are places in which things
are bought and sold. In the modern industrial system, however, the market
is not a place; it has expanded to include the whole geographical area in
which sellers compete with each other for customers.

The concept of the market as defined above has to do primarily with more or
less standardized commodities, for example, wool or automobiles. The word
market is also used in contexts such as the market for real estate or for old
masters; and there is the “labour market,” although a contract to work for a
certain wage differs from a sale of goods. There is a connecting idea in all of
these various usages—namely, the interplay of supply and demand.

A market is any place where makers, distributors or retailers sell, and

consumers buy. Examples include shops, high streets, or websites. The term
may also refer to the whole group of buyers for a good or service

Market is a set up where two or more parties engage in exchange of goods,

services and information is called a market. Ideally a market is a place where
two or more parties are involved in buying and selling.

The two parties involved in a transaction are called seller and buyer.

The seller sells goods and services to the buyer in exchange of money. There
has to be more than one buyer and seller for the market to be competitive.

Monopoly - Monopoly is a condition where there is a single seller and many

buyers at the market place. In such a condition, the seller has a monopoly
with no competition from others and has complete control over the products
and services.

In a monopoly market, the seller decides the price of the product or service
and can change it on his own.

Monopsony - A market form where there are many sellers but a single buyer
is called monopsony. In such a set-up, since there is a single buyer against
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many sellers; the buyer can exert his control on the sellers. The buyer in such
a form has an upper edge over the sellers.

Types of Markets

1. Physical Markets - Physical market is a set up where buyers can

physically meet the sellers and purchase the desired merchandise from
them in exchange of money. Shopping malls, department stores, retail
stores are examples of physical markets.
2. Non Physical Markets/Virtual markets - In such markets, buyers
purchase goods and services through internet. In such a market the
buyers and sellers do not meet or interact physically, instead the
transaction is done through internet. Examples - Rediff shopping, eBay
etc.
3. Auction Market - In an auction market the seller sells his goods to one
who is the highest bidder.
4. Market for Intermediate Goods - Such markets sell raw materials
(goods) required for the final production of other goods.
5. Black Market - A black market is a setup where illegal goods like drugs
and weapons are sold.
6. Knowledge Market - Knowledge market is a set up which deals in the
exchange of information and knowledge based products.
7. Financial Market - Market dealing with the exchange of liquid assets
(money) is called a financial market.

Financial markets are of following types:

1. Stock Market - A form of market where sellers and buyers exchange

shares is called a stock market.
2. Bond Market - A market place where buyers and sellers are engaged in
the exchange of debt securities, usually in the form of bonds is called a
bond market. A bond is a contract signed by both the parties where one
party promises to return money with interest at fixed intervals.
3. Foreign Exchange Market - In such type of market, parties are
involved in trading of currency. In a foreign exchange market (also
called currency market), one party exchanges one country’s currency
with equivalent quantity of another currency.
4. Predictive Markets - Predictive market is a set up where exchange of
good or service takes place for future. The buyer benefits when the
market goes up and is at a loss when the market crashes

The Potential Market

Potential market is the part of the total population that has shown some
level of interest in buying a particular product or service. Potential
market is also called Total Addressable Market (TAM) (MBA Skool Team,
2018).
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A potential market is the part of the market you can capture in the
future. It includes the demographic groups that are not currently your
customers but could become customers in the future (Lake, L, 2019).

Market potential is the total demand for a product in a given business

environment (Bhasin, H., 2018).

Potential market is the part of the total population that has shown
some level of interest in buying a particular product or service. This
includes individuals, firms and organizations. Potential market is also
called Total addressable market (TAM)
Market potential is the entire size of the market for a product at a
specific time. It represents the upper limits of the market for a product
Market potential is the valuation of the sales revenue from all the
supplying channels in a market. Market potential is the population that
is interested in the product/ service that is being made or offered by an
organization. In other words, market potential is the potential money
making capability of a firm if it capitalizes all advantages and everything
goes its way.
Your potential market includes the demographic groups that are not
currently your customers but could become customers in the future.
They might become your customers because you expand your available
products or services, or because you begin marketing your current
products and services in a new way and to new groups of buyers.

Types of Potential Markets

Potential markets take one of three forms:

• New products you market to your current customers.

• New products you market to new customers.
• Current products you market to new customers.

To identify your new potential markets, consider every target

demographic you currently sell to, as well as those you have not yet
targeted. Identify what they have in common, new milestones they will
encounter in their lives that will impact their buying patterns, and
where they overlap or diverge from your current customers.

The Importance of Potential Markets

Potential markets are an important part of a business's future growth.
Ensure the future of your business by identifying new customers. Think
proactively about ways for your business to grow and change. Show the
potential of your business to investors or collaborators. Increase your
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revenue. Create a plan B that will weather changes in the economy or

market.
It is very important for a new business to know and determine the
market potential of the product of service being offered. If the market
potential is very low then there is no point spending a lot of money on
the product.
One of the most important aspects of market potential is the amount of
business a product can generate in future as compared to today.
Companies can also evaluate the market share of companies in the
market. The most relevant question is the target market growing for the
offering.
Market potential helps business plan better and launch their products
and services with better preparation. Depending upon the overall
market potential, companies can identify the sales potential, or the
amount of sales they would be doing in that identified market.

Determination of Market Potential

It is a subset of the total population, where market potential is the
population, all of whom can be potential consumers of the product or
service. Market potential is the maximum population which would be
interested in the product / service, and gives a good insight on the
growth possibility as well.
Factors for calculating Market Potential
There are various factors which are important for knowing the actual
market potential:
1. Total Size of the Market: This means the total value of customers
or clients for the particular offering. Higher the number better it is.
2. Return on Investment: This would mean is the market profitable to
invest in? A market which would give a good return on the costs
incurred would only lead to good business today as well as in future.
3. Growth Rate of the Market: A target market may be good today in
terms of size and ROI but is it going to be rising in future as well? Hence
the growth rate and trends are very important for determining the
market potential
4. Category Competition: How many and how big are the competitors
for our product/service?
5. Entry Barriers: Are there any real barriers to entry into the existing
market? E.g. Very high licence cost can be an issue
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6. Political Environment: In international markets, the political

environment forms a very important factor in determining the market
potential.
7. Internal Environment: Overall the market potential may be very
good but the question arises that are we strong enough to compete in
the market with suitable offering, cost, and competition.

How to Identify Your Potential Markets

Consider every target demographic that you currently sell to, as well as those
you have not yet targeted. Identify what they have in common with each other,
new milestones that they will encounter in their lives that will impact their
buying patterns, and where they overlap or diverge from your current
customers.
Ways to Identify Your Market
1. Look to your consumers first
One are the days when marketers could easily manufacture a consumer
need through advertising and messaging. Your product needs to solve
for an actual consumer problem. Products that solve problems or
provide value for people beyond what someone could provide for
themselves and are resistant to the ebbs and flows of trends or
seasonality are the sure-fire signs that your product has viability.

If you pay attention to consumer feedback across social, blogs and

other channels you will have a better read on evolving consumer needs
and be able to innovate faster and more efficiently to keep your
consumers coming back for more. Better yet, if you can speak to the
pain point personally, demonstrate deep knowledge and supplemental
value surrounding your product through content or other unexpected
ways to delight your consumer, you will be able to increase consumer
Loyalty.

2. Pay attention to your competitors.

You may think that your ideal market should have no

competitors, but this is not the case. You want enough competition to
establish that there is an actual market - or an actual need for your
product. Having competition can also speed up your learning curve.
Look to your competitors’ media buys, messaging, and product
positioning and product innovation pipeline. This can help eliminate a
lot of trial and error as you launch.
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You do want to make sure that your brand has an inherently

unique identity and/or differentiated product benefits that will help you
to stand out from your competitors. But, be wary of positioning your
product by calling out your competition - your brand identity should be
strong enough to speak for itself
3. Make sure that the market amplifies your business.
Your business has certain capabilities - “superpowers” - which
will be maximized in the right industry. You should pay attention to
what your natural talents are when considering where to take your
company or product, and make sure that you have the appropriate
talent and technology for your market.
For example, if you are in a fast-moving industry like technology,
you need to make sure you have an organizational model that makes it
really easy to launch iterations of your products quickly. You will want
to enable marketing, design and development to come together without
silos for nimble sprint cycles, allowing you to optimize your product
with each new release. Build out your tools and team for the specific
market that you’re in

4. Decide if you are obsessed with your industry.

If it’s not an industry you naturally enjoy learning about, talking
to people about, obsessing about, then it’s not something you’ll be
willing to fight for in the long run. Elon Musk once said being an
entrepreneur is like chewing glass and staring into the abyss
simultaneously.
Leading your business takes grit, determination, relentless focus
and requires a passion for what you do beyond interest, it needs to
border on obsession. It will test you. It will tell you no a million times
before it tells you yes. Ultimately, the difference between the ones who
make it and those that don’t is some luck, grace and also refusing to
stand down.

Reaching Your Potential Market (Lake, L., 2019)

Once you've identified and chosen a potential market to begin targeting,
you will need new marketing strategies in place to communicate with them.
Use this profile to identify:
• The demographic information that people in a group have in common.
• The best forms of media to reach them.
• How they prefer to shop and make purchases.
• The concerns, struggles, or problems that you can help them
overcome.
• What values matter to them, both in everyday life and when
shopping.
• The language that resonates with them
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Available Market

These are prospects who are willing and capable (have sufficient
Resources) buyers, and have access to a particular market or service
(www.businessdictionary.com). It is defined as the number of people
who are both willing and capable of buying a particular product or
service in a particular market (MBA Skool Team, 2020).

Target Market

This refers to a group of potential customers to whom a company wants

to sell its products and services. Target markets are generally
categorized by age, location, income, and lifestyle. Defining a specific
target market allows a company to home in on specific market factors
to reach and connect with customers through sales and marketing
efforts. (Kenton, W., 2019).

Penetrated Market
This is a set of customers or clients who are already using a particular
product or service. A penetrated market means that the potential users
of a product or service are aware of it, and in many cases are active
consumers of it.

The size of a potential market helps a company understand the level

Of investment it should make further in the market, while taking into
Consideration other factors. If the potential market is very small, it
means there is a very small fraction of the total population showing any
interest in the product or category.

This means that it is better that the company doesn’t invest further in
the product or category because people won’t buy it. If the size of the
potential market is large, it means that there is a huge fraction of the
total population which is showing interest in the product, so further
investment can be made on the product development or modification,
marketing, promotions etc. The size of the potential market gives an
estimate of what all a company should do and how much it should
invest (MBA Skool Team, 2018).

The Market Need

1. Need

This refers to the motivating force that compels action for its
satisfaction. Needs range from basic survival needs (common to all
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human beings) satisfied by necessities, to cultural, intellectual, and

social needs (varying from place to place and age group to age group)
satisfied by necessaries

The need is a driver of human action which marketers try to identify,

emphasize, and satisfy, and around which promotional efforts are
organized

2. Market

A market is a place where two parties can gather to facilitate the

exchange of goods and services. The parties involved are usually buyers
and sellers. The market may be physical like a retail outlet, where
people meet -face-to-face, or virtual like an online market, where there
is no direct physical contact between buyers and sellers (Kenton, W. &
Boyle, M., 2020).

A market does not refer to a particular place but it refers to a market

for a commodity or commodities. It refers to an arrangement whereby
buyers and sellers come in close contact with each other directly or
Indirectly to sell and buy goods (Shaikh, S., retrieved 2020). A market
is any place where sellers of particular goods or services can meet with
buyers of those goods and services. It creates the potential for a
transaction to take place. The buyers must have something they can
offer in exchange for the product to create a successful transaction

Existing customers: People who have already purchased your product.

Prospects: People who have not yet purchased your product but are
considering it.

Target market users: People in your target market who are not
currently looking for a solution.

Define the Market Need for Your New Business

Why is it important to clearly define market needs?

The market now demands that your business align to their needs. In
order to properly align your marketing efforts and your content, in
particular to what buyers need, you have to have a clear understanding
of the many intricacies, pains and pressures within your market. To
achieve such alignment, you need the ability to define market patterns,
needs, interests, preferences, etc. for a comprehensive view of the
buying process is critical
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Below are ways to define your market (Lancaster SCORE (2010):

• Consider whether the business offers a new solution to an old
problem or complements an emerging trend.
• Have a clear picture of your target market.
• Determine the benefits that your product or service offers.
• Examine industry data that can confirm whether there is a
sustained, growing demand for your product or service.
• Identify the percentage of market share that it is realistic for you
to capture.
Activity 1
Directions: Give at least 5 top leading brands of products in our country and
on each product, give a short statement how it improves the lifestyle of the
Filipino consumer.

1. __________________________
2. __________________________
3. __________________________
4. __________________________
5. __________________________

III. Engage

What I Learned
Directions: Copy and accomplish this on you notebook.
Considering the ways to define your market, evaluate the
situations below using 1 to 5 rating scale, 5 as the highest
and 1 as the lowest. Justify your answer in 1 to 2 sentences
only.
Situation Rating Justification
To produce face masks and PPEs
To open on-line business for fashion
accessories
To open a massage center.
To open a computer shop.
To open a carinderia.
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IV. Apply

What I Can Do
A. Directions: In your notebook, complete the following
statements.

1. I have learned that

_____________________________________________________________________

2. I have realized that

_____________________________________________________________________

3. I will apply what I have learned

____________________________________________________________________________

B. Directions: In your municipality/locality, give at least five market

needs that you think relevant in supplying the basic needs and help
improve the lifestyle of your family and the rest of the residents.

1.
2.
3.
4.
5.

V. Post Test

A. Directions: Read and analyze the statements below. Identify

whether this refers to potential market, available market, target
market, or penetrated market. Write your answer on your notebook.

_________1. They are described as active consumers of a product.

________ 2. They are people who are both willing and capable of buying a
Particular product or service in a particular market.
_________3. It is the part of the total population that has shown some level of
Interest in buying a particular product or service.
_________4. It includes specific customers to whom a company directs its
marketing efforts.
_________5. They are customers or clients who are already using a particular
product or service.
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B. MATCHING TYPE. Match the definitions in Column A with the

word/phrase in Column B. Write your answer on your notebook.

Column A Column B

1. It is a company’s marketing goals and

objectives combined into a single comprehensive Market
plan.
2. It refers to a person or organization that uses a
Market size
commodity or service.
3. This is an area or arena in which commercial
Target market
dealings are conducted.
4. This is used to give a general idea of the size of
a company in relation to its market and its Potential market
competitors.
5. This is one part of the total market for a good
Need
or service.
6. It is also called Total Addressable Market Demographic
(TAM). group
7. A person or business that purchases a
Market strategy
commodity or service.
8. Circumstances in which something is
necessary, or that require some course of action; Customer
necessity.
9. The study of the characteristics of human
populations, such as size, growth, density, Consumer
distribution, and vital statistics.
10. The number of buyers and sellers in a
Market share
particular market.