Learning Module for Entrepreneurship

GRADE-12

Lesson The Potential Market and the Market

1 Need

EXPECTATIONS

After going through the module, you are expected to:

 recognize a potential market and analyze the market need.

You may start your journey in learning about the potential market and
the market need. Are you excited to answer the Pre-test? Smile and
Enjoy!

PRE-TEST

DIRECTIONS: To check your prior knowledge about the topic, please analyze the pictures
below and list down at least three (3) potential markets that entrepreneurs should consider
during this COVID -19 pandemic and indicate their needs. Write your answer in the space
provided.

https://images.search.yahoo.com/
Potential Market Market Need
1. 1.
2. 2.
3. 3.
POTENTIAL MARKET MARKET NEED
1. FACE MASK AND PPEs Helps to lessen and protect ourselves from the
risk of Covid 19

2. GROCERIES STORES People purchase essential good products resulting

into huge or demand of items.

3. ONLINE SELLING Since were facing this pandemic online selling rises
And sells essential products that will helps to going
Outside.

You have finished answering the pre-test. You may request your facilitator/guardian
to check your work. Congratulations and keep on learning!
Learning Module for Entrepreneurship

LOOKING BACK TO YOUR LESSON

As we go further, let us try to recall the competencies in Entrepreneurship.

o Competencies such as risk seeking, assertiveness and vision are considered typical of a
successful entrepreneur (www.ideasforleaders.com).

o Specific techniques and habits must be practiced and developed by all would-be
entrepreneurs. Aside from business competencies, entrepreneurs need interpersonal
and self-leadership skills too; however, these are often overlooked.
Entrepreneurial behavior’ can be learned and developed (www.ideasforleaders.com).

o If you’re an aspiring entrepreneur, there are different career paths you can take to turn
your dream into a reality. Which path you choose will depend on your experience, skills,
finances, and flexibility, as well as your goals for the future (Doyle, A., 2020).

Please answer the questions below. Good Luck!

Multiple Choice. Write the letter of the correct answer that best complete the
sentence in the space provided.

D. 1. All are core competencies in Entrepreneurship, except:

A. basic bookkeeping/ accounting skills B. communication skills
C. building relations with customer D. building competitive advantage

C. 2.Which of the following is not a business competency? This competency covers the
outcomes required to build, and grow a micro/small-scale enterprise - like developing and
maintaining small-scale business, establish customer base, and manage business finances.

A. Establish customer service B. Manage finances

C. Preparing business letters D. Monitoring operations

C. 3. Which is not a goal of entrepreneurial competency?

A. Expanding the enterprise B. Expanding markets and

clientele
C. Developing individuals and teams
D. Enhancing one’s business skill

A. 4. All are important aspects of Entrepreneurship as a course, except:

A. Discussion on economic issues and concerns.

B. Explanation of key concepts of competencies in Entrepreneurship.
C. Discussion on the relevance of the course.
Exploration of career opportunities.

B. 5.Which of the following does not cover a high-performing enterprise?

A. Build and develop the enterprise to be more competitive within a changing

business environment.
B. Creating gaps among employees.
C. Responding to consumers’ demand.
D. Maintaining product quality and accessibility.
Learning Module for Entrepreneurship.

BRIEF INTRODUCTION

The Potential Market

1. 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).
2. 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).
3. Market potential is the total demand for a product in a given business environment (Bhasin,
H., 2018).

The Importance of Potential Markets (Lake, L., 2019)

 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 revenue.
 Create a plan B that will weather changes in the economy or market.
How to Identify Your Potential Markets (Lake, L., 2019)

 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.

Ask yourself these questions that will help you identify both new ways to market your
current products or services, as well as new products and services that you can begin selling.

 What other products do my customers need now?

 What related products will they need in the future?
 Who else could make use of the products I am selling now?
 What demographic information does that new group have in common with my
current customers?
 What demographic information does that new group have in common with
Learning Module for Entrepreneurship
each other?
For example, a business that makes face masks and PPEs could identify
potential markets such as:
 Hospitals and other health related industries whose employees are prone to COVID
-19 virus and other viruses.
 Business industries and other organizations who want to ensure the health
condition of their employees.
 Employees and workers who need to report to work to earn income.
 Households who needs to go out for their necessities.

Note: Depending on the size and age of your company, as well as your industry, you may
have a clear picture of the potential markets that are available.

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.

The figure below depicts what is a potential market with respect to the total population
and how it can be converted to a penetrated market:

MBA Skool Team, 2018

Available Market
 Prospects who are willing and capable (have sufficient resources) buyers, and have
access to a particular market or service (www.businessdictionary.com).
 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).
Learning Module for Entrepreneurship
Target Market

 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
 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. (www.businessdictionary.com).

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
o A motivating force that compels action for its satisfaction. Needs range from basic
survival needs (common to all 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 (www.businessdictionary.com).

o A driver of human action which marketers try to identify, emphasize, and satisfy,
and around which promotional efforts are organized
(www.businessdictionary.com).
2. Market
o 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).

o 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).
Learning Module for Entrepreneurship
o 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 (Moffatt, M., 2019)

Your market consists of (Stull, C., Myers, P.& Scott D.M. (2008) as cited in:
https://learn.marsdd.com/):
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, the ability to define market patterns, needs, interests, preferences, etc.
for a comprehensive view of the buying process is critical (www.aberdeen.com).

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. The
more competition you have, the lower the margins will be.
• Consider how realistic your pricing is. How can you present your product or service
to potential customers so that it appears to be a good value, while still affording you
a healthy profit?
Learning Module for Entrepreneurship

ACTIVITIES
Activity 1. Read and analyze the statements below about “Market”. Determine whether the
statement is TRUE OR FALSE. Write TRUE if the statement is correct and write FALSE if
otherwise. Write your answer in the space provided.
True 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.
True 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.
True 3. Market refers to the whole area of operation of demand and supply
True 4. A market signifies any arrangement in which the sale and purchase of
goods take place.
True 5. The market establishes the prices for goods and other services.

Activity 2. Read and analyze the given situations below. Identify whether this refers to Write
existing customer, prospects, or target market users. your answer in the space
provided.

1. Students need to 6. Arlene, a student of a public

buy a tablet/ school, needs mobile data in Prospects
laptop for school Prospects order to comply with the
requirements. requirements in school.
2. Ana used to buy Existing customer 7. Hospitals need facemasks Prospects
shampoo. and PPEs.
Target market
3. Households living users 8. Mike, a sari-sari store owner, Prospects
in a remote area. wants to go online selling.
4. Martha, a call 9. Jeep drivers need to modify
Existing
center agent, needs a Prospects their jeeps for public customer
Wi-Fi. transportation.
5. Karlo, a factory 10. Ella needs to buy her
worker, needs Prospects vitamin C to boost her immune Prospects
transportation. system.

Activity 3. MAKE MEANING- INTERNET ASSSISTED ACTIVITY

DIRECTIONS: Give the meaning of the following word/phrase in each item. You may use the
internet to define the given word/phrase. Write your answer in the space provided.

1. Customer vs. consumer - Customer is the one who is purchasing the goods while
Consumer is the one who is the end user of any goods or services.
2. Demographic group - defined as a subset of the general population, and refers to
the group's age, gender, occupation, nationality, ethnic background, sexual orientation.

3. Market share - represents the percentage of an industry, or a market's total sales,

that is earned by a particular company over a specified time period.

4. Market size -  is the number of individuals in a certain market segment who are

potential buyers. 
.

5. Marketing strategies - refers to a business's overall game plan for reaching

prospective consumers and turning them into customers of the products or services the
business provides.
Learning Module for Entrepreneurship

REMEMBER
• 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).
• Available Market are prospects who are willing and capable (have sufficient resources)
buyers, and have access to a particular market or service
(www.businessdictionary.com).
• Target Market 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 (Kenton, W., 2019).
• Penetrated Market is a set of customers or clients who are already using a particular
product or service (www.businessdictionary.com).
• Need is a motivating force that compels action for its satisfaction. Needs range from
basic survival needs (common to all 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 (www.businessdictionary.com).

• A Market is a place where two parties can gather to facilitate the exchange of goods and
services (Kenton, W. & Boyle, M., 2020).
• Existing customers are people who have already purchased your product.
• Prospects are people who have not yet purchased your product but are considering it.

• Target market users are people in your target market who are not currently looking for
a solution.

CHECK YOUR UNDERSTANDING

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.
Write your answer in the space provided.

Situations Rating Justification

Situations Rating Justification

To produce face masks and

PPEs. 5 Face mask and PPEs are very important because
It helps us to protect from covid 19.

To open on-online business 4 It’s helpful because you can earned an income
for fashion accessories cause fashion accessories business is in huge
demand.

To open a message center 4 It gives relaxation of the body pain of every

Customer.

To open a computer shop. 5 It’s helpful for student when it comes to their
Assignments that need research.

To open a carinderia. 5 It’s important to have a carinderia when you don’t

have a time to cook and your in a hurry you can
just buy in there easily and much more lesser than
restaurant so it gives more profit’s to the owner.
Learning Module for Entrepreneurship

POST-TEST

Identification. Read and analyze the statements below and identify whether this refers to
potential market, available market, target market, or penetrated market. Write your answer
in the space provided.

Penetrated Market 1. Active consumers of a product.

Available Market 2. People who are both willing and capable of buying a particular product
or service in a particular market.

Potential Market 3. It is the part of the total population that has shown some level of interest
in buying a particular product or service.

Target Market 4. It includes specific customers to whom a company directs its marketing
efforts.
Penetrated Market 5. Customers or clients who are already using a particular product or service.

MATCHING TYPE. Match the definitions in Column A with the word/phrase in Column
B. Write your answer in the space provided.

Column A Column B
1. It is a company’s marketing goals and objectives combined A. Market
into a single comprehensive plan.
2. Refers to a person or organization that uses a commodity B. Target Market
or service.
3. This is an area or arena in which commercial dealings are C. Potential Market
conducted.
4. This is used to give a general idea of the size of a company D. Need
in relation to its market and its competitors.
5. This is one part of the total market for a good or service. E. Demographic group
6. It is also called Total addressable market (TAM). F. Market Strategy
7. A person or business that purchases a commodity or G. Market size
service.
8. Circumstances in which something is necessary, or that H. Customers
require some course of action; necessity.
9. The study of the characteristics of human populations, I. Consumers
such as size, growth, density, distribution, and vital
statistics.
10.The number of buyers and sellers in a particular market. J. Market share
REFLECTIVE LEARNING

If you’re thinking about starting a business, most likely you have dreamed of one that
involves your interests. But, what does the market need or want? Do you
Learning Module for
Entrepreneurship
know who is buying what and how much, or how, where and why they are
buying those goods or services already?

Determining the marketability of your start-up business is typically done in

the context of creating a business plan and performing an analysis of your
competition. It requires research into areas of marketability.

Congratulations! You are almost done in this module. Please

write your idea on the situation below.

As would-be Entrepreneur, you are tasked to identify your dreamed

business, one that involves your interests. Indicate who are your potential
market, target market, available market and/or penetrated market. Write your
answer in the space provided.

Potential Market -

~Don’t let what you cannot do interfere with what you can do.” – John Wooden

God Bless!

……CONTINUE LEARNING…..