ENTREPRENEURSHIP1

ENTREPRENEURSHIP Introduction to Entrepreneurship 1
Module 001 | Introduction to Entrepreneurship
The concept of Entrepreneurship has a wide range of meanings. On the one extreme, an entrepreneur is
a person of very high aptitude who pioneers change, on the other extreme definitions, anyone who
wants to work for himself or herself is considered an entrepreneur.
The word entrepreneur originates from the French word, entreprendre, which means "to undertake." In a
business context, it means to start a business. The Merriam-Webster Dictionary presents the definition of
an entrepreneur as one who organizes, manages, and assumes the risks of a business or enterprise.
Objectives:
1. Understand key concepts, underlying principles and core competencies in Entrepreneurship
2. Create or provide a quality and marketable product and/or service in Entrepreneurship
3. Define the concept of Entrepreneurship
Schumpeter’s View of Entrepreneurship
Austrian economist Joseph Schumpeter’s definition of entrepreneurship placed an emphasis on

innovation, such as:
New products New production methods New markets New forms of organization
Wealth is created when such innovation results in new dem and. From this viewpoint, one can define the
function of the entrepreneur as one of combining various input factors in an innovative manner to
generate value to the customer with the hope that this value will exceed the cost of the input factors,
thus generating superior returns that result in the creation of wealth.
Entrepreneurship vs. Small Business
Many people use the terms "entrepreneur" and "small business owner" synonymously. While they may
have much in common, there are significant differences between the entrepreneurial venture and the
small business. Entrepreneurial ventures differ from small businesses in these ways:
Amount of wealth creation - rather than simply generating an income stream that replaces traditional
employment, a successful entrepreneurial venture creates substantial wealth, typically in excess of
several million dollars of profit.
Speed of wealth creation - while a successful small business can generate several million dollars of
profit over a lifetime, entrepreneurial wealth creation often is rapid; for example, within 5 years.
Risk
The risk of an entrepreneurial venture must be high; otherwise, with the incentive of sure profits, many
entrepreneurs would be pursuing the idea and the opportunity no longer would exist.
Innovation
Entrepreneurship often involves substantial innovation beyond what a small business might exhibit. This
innovation gives the venture the competitive advantage that results in wealth creation. The innovation
may be in the product or service itself, or in the business processes used to deliver it.
Entrepreneur
The person who is able to identify business opportunities and implement actions to maximize
opportunities. An entrepreneur initiates enterprise creation, undertakes risks, and manages resources to
establish and operate a business enterprise that is capable of to self-sustain.
Definition According to J.B. Say
According to a French economist, J. B. Say, an entrepreneur is a person who shifts economic resources
out of an area of lower productivity into an area of higher productivity and greater yield.
Entrepreneur Developing Economies
In the case of in a developing economy, the concept of an entrepreneur is understood differently. An

entrepreneur in a developing economy is one who starts an industry (old or new), undertakes risks, bares
uncertainties and performs the managerial functions of decision-making and coordinating. He also puts
new processes based on technological research into operation. He is called an entrepreneur even if he
imitates any techniques of production from a developed economy. The term entrepreneur has now been
attributed to all small industrialists, traders and agriculturalists. Hence, all people who are gainfully
engaged in work of manufacturing, distribution or service in other sectors are called entrepreneurs. The
entrepreneur can be considered as the fourth factor of enterprise. The enterprise is the basic unit of an
economic organization. It produces goods and services worth more than the resources used. Enterprise is
an undertaking, especially one which involves four factors, land, labor, capital and now the entrepreneur.
It involves the willingness to assume risks in undertaking an economic activity.
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It also involves innovation, risk taking, and decision-making. Entrepreneurs are the people who start new
enterprises. The entrepreneur and enterprise are linked as the success of an enterprise depends on the
entrepreneur.
Intrapreneur
This is an employed staff e.g. manager who innovates for the company and takes risks only on behalf of
the employer. He is therefore an intra company entrepreneur for whom the term Intrapreneur is coined.
Intrapraneurs are, therefore, the main entrepreneurs in large companies who innovate and take risks on
behalf of their employer. These are creative people usually working together as teams, who function as
entrepreneurs within corporations. The idea is to use a company’s existing resources such as human,
financial and physical resources to launch new products and gain more profit.
Intrapreneurship
This is the development within a large co-operation of internal markets and relatively small autonomous
business units producing products, services or technologies that employ the firms‟ resources in a unique
way. It gives the managers of the co-operation the freedom to take initiatives and try new ideas. It is
entrepreneurship within an existing business.
Entrepreneurship and Innovation
Creativity is the ability to generate ideas while innovativeness is the ability to implement the appropriate
ideas. An entrepreneur is expected to be creative and innovative to be able to solve problems, cope with
business challenges, plan and implement activities successfully. An entrepreneur’s innovativeness is
reflected in the following ways:
Initiating new ideas. Initiative is the ability to start acting on an idea. Entrepreneurs are crusaders of
new ideas. They do not wait for conditions to be perfect to act on a new idea. They act on them and solve
obstacles and difficulties as they arise. As a result, an entrepreneur creates an advantage over their
competitors.
Searching for new information. An entrepreneur is always open for information that facilitates the
generation of new ideas for the business.
Translating ideas and information into a business venture. Excellent ideas and information are not
enough. An “average” idea acted upon and developed is far better than a “very good” idea that dies
because it is not followed up. Entrepreneurs are action-oriented and translate good ideas to actions.
Inquisitiveness
An entrepreneur is always curious to know what is happening in the business environment. The ability of
being inquisitive and sensitive to the environment upgrades the entrepreneurs’ level of thinking and
approach to business problems.
Perseverance. Entrepreneurs do not give in to failure. Rather, they seek out the faults and weakness
and then correct them. They persevere in their effort to overcome problems and setbacks and eventually
win.
Removing mental blocks and acceptance. Mental blocks and acceptance are traits that inhibit creativity
and innovativeness. Some of these are traditional methods and beliefs. An entrepreneur has the ability to
remove these barriers and encourage clear thinking and independence in his or her venture.
Entrepreneurial Contribution to Economic Development
Utilization of Local Resources
Local resources, some of which would be otherwise declared useless, are put to more gainful use. The
value of the resources is improved. For example, the conversion of waste products such as nylon papers
to make plastic posts, bottle tops from used bottles to make door curtains, sisal fiber to make the world
famous “ciondo” etc.
Promotion of Technology
Entrepreneurs are very creative hence, they contribute to the utilization and development of technology.
For example, the development of the energy saving jiko, wheel chairs, washing machines, vegetable and
fruit cutting machines, charcoal refrigerators etc.
Capital Formation
Entrepreneurs help in the creation of wealth for the country through job creation (as employees save
their salaries and wages through the banking system and other systems, they contribute to capital
formation). As the entrepreneurs pay tax and save their earnings they too directly contribute to capital
formation.
Creation of Employment Opportunities
Entrepreneurs help in solving the unemployment problem. Majority of indigenous. Kenyan entrepreneurs
are in Small Scale and Jua Kali Sector that is a major employer in the country. Promotion of an
Entrepreneurial Culture
By portraying successful images, entrepreneurs become models to the upcoming Kenyan generation. A
country, which embraces entrepreneurial culture, is bound to be economically stable.
Export Promotion
Many products manufactured by the Kenyan Jua Kali/Small Enterprise sector find their way to foreign
markets and in return, Kenyan entrepreneurs identify foreign markets. Through these activities,
entrepreneurs are able to earn the country foreign exchange.
Favorable Balance of Payment
The improvement of the Jua Kali Sector has seen a reduction in the rate of loss through import only.
There is now a balance between the import and export business.
The rate of improvement of industries in Kenya has gone up because of an improvement in the Jua Kali
and Small Scale Enterprises sector.
Improved Marketing of Locally Produced Products
The improvement in the Jua Kali sector has resulted in an improvement in the internal and external
markets. With the current competition, every business is compelled to produce quality products/services
and aggressively market the same.
Improved Infrastructure
Creation of businesses leads to improved cities and towns, which in turn result in improvement of roads,
banking services, telephone network, electricity etc.
Promotion of Talent and Hobbies
The Jua Kali and Small Scale Enterprise Sector encourages young people to exploit their talents.
Improved Growth in Gross Domestic Product

There is now favorable trade internally and this has seen an increase in economic growth.
Self-reliance
Entrepreneurs enable citizens to survive comfortably without too much borrowing.
Entrepreneurship and Self-Employment
A person puts his effort in a business or an activity that belongs to him/her in this state. He or she works
independently and earns a living from it. An entrepreneur is one who recognizes an opportunity and
takes the risks as a business owner of providing a needed product or service for which an adequate
reward (profit) is realized. Thus, both risk and profit are involved. These descriptions both fit
entrepreneurship and self-employment so they are one and the same, although entrepreneurship is a
more serious and deliberate level of self-employment.
Factors to Consider Before Going into Self-employment
Business Idea Skills (Technical/Managerial) Market Capital (Opening, Working or Long-term)
Machinery (Technology) Raw materials Location (Strategic) Legal Issues Competition
Reasons for Self-Employment
1. Need to improve personal income. Besides the inability to secure any type of employment this is the
most basic reason, which causes many low-income earners to directly embark on business byway of self-
employment. Inflation often impairs the ability of low-income earners to afford necessities of life to an
extent they have to look for alternative ways of ensuring survival, and this may lead them to set up small
business.
2. Inability to secure a desirable job. The number of Kenyans eligible for employment is very high. There
are not enough employment opportunities in the formal sector. The small business sector has the
capacity to create many jobs.
3. Influence of others. Although many aspiring entrepreneurs make a personal decision to go into
business there are also strong indications that just as many if not more get courage to take the plunge
because of influence or inspiration gained from close associates such as friends or relatives already in
business.
4. To fulfill a life-long ambition. There are those people in society whose ultimate goal is to go into
business at some defined point life no matter how attractive wage employment might seem. These
people are usually highly motivated internally and do not need extrinsic motivators to go into business.
They are often high achievers who aim for self-fulfillment that comes from doing something unique.
5. To seek more independence. These people prefer to be introduced to a task without being led every
step required for the accomplishment of the task. They like to be left alone to think and develop their
own initiative. When guided closely they feel belittled, frustrated and impatient. Occasionally these
people rebel and will often end up in self-employment if the present opportunity does not give them the
opportunity to seek challenge and contribute their own ideas.
6. Love for adventure. Innovative people thrive on exploring new ideas and opportunities even if the
outcome might be uncertain and risky. They derive satisfaction from the thrills that arise from a mixture
of success and uncertainty.
7. Dissatisfaction with wage employment. This may be because of poor prospects of career advancement,
delayed promotions, lack of recognition or appreciation of special accomplishments, poor terms of
service, unsatisfactory working conditions pending redundancy
8. Favorable environment. These include appropriate incentives e.g. access to credit facilities laws
governing small enterprise creation, access to raw materials and machinery, good infrastructure e.g.
roads telephone networks electricity, inexpensive cost of labor.
Characteristics of Entrepreneurs
M. M. P. AKhouri, formerly Executive Director, National Institute for Entrepreneurship and Small
Business Development (NIESBUD), New Delhi, describes an entrepreneur in words that clearly bring out
the characteristics of an entrepreneur. He describes entrepreneur “as a character who combines
innovativeness, readiness to take risk, sensing opportunities, identifying and mobilizing potential
resources, concerns for excellence and who is persistent in achieving the goal.”
1. An eye for opportunity: Many entrepreneurs start by finding a need and quickly satisfying it. They are
always alert to opportunities. They are very much quick to see and grab opportunities. They plan
intellectually and anticipate carefully how to achieve their goals in realizing an opportunity.
2. Independence: Even though most entrepreneurs know how to work within the framework for the sake
of profits, they enjoy being their own boss. They like doing things their own way. The characteristics of
independence and the sense of determination are the drives that make an entrepreneur start their own
business. In a way, their own business fulfills their need for independence.
3. An appetite for hard work: Most entrepreneurs start out working long, hard, hours with little play.
Entrepreneurs are always at work even when other people have stopped. They are persistent and
strongly believe that working hard will help them attain their goals. They hence focus on the result.
4. Self-confidence: Entrepreneurs must demonstrate extreme self-confidence in order to cope with all the
risks of operating their own business. Most successful entrepreneurs are confident of achieving realistic
and challenging goals. They get into business or industry with a high level of self-confidence. This, couples
with a sense of effectiveness ultimately contribute to the success of the venture.
5. Discipline: Successful entrepreneurs resist the temptation to do what is unimportant or the easiest but
have the ability to think through what is the most essential. Entrepreneurs are economically efficient, do
not like to waste time and they like to see work completed. They use discipline as a guide to their
destination.
6. Judgement: Successful entrepreneurs have the ability to think quickly and make a wise decision. This is
possible because they have a plan, they have an economic goal, they know what they want and they
know what they can do. Entrepreneurs are unaffected by personal likes and dislikes. They stand beyond
these types of prejudices, as they are realistic in their approach. At the time of their need they select
experts rather than friends and relatives to assist them. They usually avoid emotional and sensitive
attitude towards their business or problem.
7. Ability to accept change: Change occurs frequently when you own your own business, the
entrepreneur thrives on changes and their business grow. An entrepreneur may need to change his/her
plans in order to help the business grow. Entrepreneurs look at many solutions to their problems. They
realize that other people may know how to do something better. Entrepreneurs can choose the best way
to do something, even if it is different from how they want to do it.
8. Make stress work for them: On the roller coaster to business success, the entrepreneur often copes by
focusing on the result and not the process of getting there. Entrepreneurs are capable of working for long
hours and solving different complexities at the same time. As the captain of an industry or an enterprise,
an entrepreneur faces a number of problems and in right moment, he takes right decisions that may
involve physical as well as mental stress.
9. Need to achieve: Although they keep an “eye” on profit, this is often secondary to the drive toward
personal success. Entrepreneurs have strong desire to achieve higher goals. Their inner self motivates
their behavior towards high achievement. To an entrepreneur, winning is achievement.
10. Focus on profits: Successful entrepreneurs always have the profit margin in sight and know that their
business success is measured by profits.
11. Risk bearing: Entrepreneurs are the persons who take decisions under uncertainty and thus they are
willing to take risk, but they never gamble with the results. They choose moderate risk rather than play
wild gamble. They, therefore, undertake calculated risk which is high enough to be exciting, but with a
reasonable chance to win.
12. Locus of control: Closely consistent with McClellan’s theory of need for achievement, is the belief in
internal locus of control. According to Rotte’s locus of control theory, an individual perceives the
outcome of an event as being either within or beyond his personal control. Entrepreneurs believe in their
own ability to control the consequences of their endeavor by influencing their socio-economic
environment rather than leave everything to luck. They strongly believe that they can govern and shape
their own destiny.
13. Creative and Innovators: Successful entrepreneurs are innovators. They constantly put their efforts in
introducing new products, new method of production, opening new markets and reorganizing the
enterprise. They always try not to be satisfied with conventional and routine way of doing things, but
always think of how they can do them in a better way.
14. Leadership: Entrepreneurs should possess the quality of leadership. Leadership is the ability to exert
interpersonal influence by means of communication towards the achievement of goals. Entrepreneurs as
leaders should provide the necessary spark of motivation by guiding, inspiring, assisting and directing the
members of the group for achievement of unity of action, efforts and purpose. According to George R.
Terry: “Leadership is the activity of influencing people of strive willingly for group objectives”. Thus,
entrepreneur, as the leader of the group, can ensure high performance by creating a well-to-do
environment among others. They must have the capability to arrive at prompt and correct direction and
win the confidence of their subordinates. Being the leader of the enterprise, they should possess the
following characteristics:
Existence of followers
Assumption of responsibility
Empathy conduct
Exemplary conduct
Developing teamwork
Common objectivity
Facilitating change
Building morale
Maintenance of discipline
Active participation
15. Hence, entrepreneurs by their own leadership styles and behavior reduce the problems with careful
listening and proper handling of situations. Good administrative work depends upon effective leadership
of the entrepreneur.
16. Ability to mobilize resources: Entrepreneurs must have the ability to marshal all the inputs to obtain
the product. They have to mobilize 6Ms, i.e. Man, Money, Material, Machinery, Market and Method
effectively to realize the final product as entrepreneurship is a function of gap filling and input
completing.
Entrepreneurs have many qualities that help them their businesses successful. However, an entrepreneur
does not have to possess all the qualities. In that case, he has either to learn or hire the services of those
who possess the qualities he does not have.
ENTREPRENEURSHIP Core Competencies in Entrepreneurship 1
Course Module
Module 002 | Core Competencies in Entrepreneurship
Dr.C.K Prahalad and Prof. Gray Hamel coined the term core competency in 1989. They took examples of
various Japanese firms and compared them with their American counterpart. Competence based strategy
is the part of an overall strategy that is concerned with integrating technology, know-how (including
patents), value and culture in order to create a set of competencies that unfolds superior value for
customers and thereby support the product-market strategy of the firm
We should think of the organization as a small sapling, which after nourishment develops into a strong
tree with core competences as its trunk. This core competency trunk helps in growing branches of
different businesses and then these businesses grow products as fruit. The following graphic pictures this
very well.
Sadly, many companies around the world are not too well versed with the concept of core competencies
or fail to recognize actual competencies, which may help them with long term.
Objectives:
1. Define Core Competency
2. Understand the importance of Core Competency
3. Identify the Core Competencies in Entrepreneurship
Importance of Core Competencies
Core competencies are the collective learning of the organization, especially how to co-ordinate the
diverse production skill and integrate multiple stream of technologies. A company, if it has identified its
core competencies, will be capable of creating more value. Core competences must coalesce around
individuals working in the organization. These people should recognize their effort in building and
strengthening these core competencies.
Unlike physical assets, which do deteriorate over time, competences are enhanced as applied and share
across the organization. The competences act as the glue that bind businesses together as well as pave
the way for new business development. In other words, core competences of a business are also guiding
parameters for new markets and diversification.
Strategic Intent
The process of developing core competencies starts with the strategic intent of being a leader in the
market by leveraging the resources. This thought of being a leader in the market is called strategic intent.
This concept points out to identifying various opportunity gaps. It is an obsession with writing a
competitive agenda, for a long period of time, which is shared with the whole organization.
Strategic intent provides a basis for stretching the goals of the organization with barrier breaking
initiatives.
Framework for Advantage (Strategic Architecture)

The next stage towards developing the core competencies is to leverage the current resources of the
organization. This stage is known a developing the strategic architecture. Strategic architecture is a
roadmap which predicts what core competencies to build and which related technologies are needed.
This step requires the distillation of past and present data to answer the following questions:
Change in customer interference

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New technological possibilities
Competitor’s positioning
Current and future set up of the industry
This exercise allows managers to maintain consistency in their efforts and provides logic for managing
linkages across business units. It is helpful in more than one way. Apart from being a useful tool for
managing innovation, it also helps in identifying alliances and acquisitions of strategic importance.
Internally, this helps the lower management to allocate resources and upper management to keep focus.
Leveraging resources and thereafter the development of core competencies requires investment in three
different things:
a) Technology
b) Governance process
c) Collective learning
Companies should invest in all three of them. If not, then you will hamper the development of core
competencies. Thus, a company should invest in good governance and learning environment and not just
technology.
Identifying Core Competencies
Core competencies play an important role in the process of advantage. We can identify them using three
simple tests:
1. Does the trait provide a major competitive differentiation? Does it provide a unique value proposition
to the organization?
2. Does the trait cover a lot of business or is useful only for a single business unit?
3. Is it useful only for current business or for new ones too? Is it hard for competitors to imitate?
Core competencies extend to the whole organization, and are part of tactical learning at the same time.
We should not confuse a core competence with a core technology. Technology / technical capabilities are
complete in itself while a core competence is embedded inside the organization. Without one another, it
cannot exist. We should also differentiate between core competencies and core capabilities before
moving forward. Core capabilities are crucial for survival but unlike a core competency, does not confer
any specific differential advantage over other competitors in the industry.
Importance of Core Competencies
The most important advantage of having core competencies is having a long-term competitive
advantage. These competencies help in bridging the gap between performance and opportunity, thus
helping a company in being a potential leader in the industry. By linking traditional business to products
and service of the future, the company acquires greater opportunity for success. This also helps in
activation of the company by acting as a guideline for diversification.
Core competencies are also an indicator that resources are being used in the right places in the right
amount. An organization should focus on outsourcing all non-core activities that will streamline the
operations to encourage learning environment congruent to their competencies.
Core competencies also help in the development of core products. They should have access to all the
primary component of a complex product that can help in long-term foothold in that particular industry.
This complex product can then be used to create a pipeline of products.
Core competencies are meaningful if they are related to an attribute valued by the market. Customers
need to perceive a consistent difference in important attributes between the producer’s products or
services and those of its competitors. Intel particularly uses this. Their core competence lies in developing
an array of microprocessors in very short time. With the proved attribute of speed and quality against
other competitors, this core competency provides a distinctive competitive advantage.
Finally yet importantly, core competencies make a company focus on extensive Research and
Development (R&D).
Losing Core Competencies
Companies, especially big ones, have to be careful when outsourcing a product or service to a different
organization while looking to cut cost. In the past, Chrysler has viewed engines in cars as just another
component that was outsourced to various Japanese companies. Outsourcing is thus a two bladed sword
if not handled properly. While outsourcing can give a short-term competitive advantage, it typically
contributes very little to developing people skills that help in building core competency.
Sometimes lack of forecasting the state of the market and lack of a clear framework can make companies
forsake attractive opportunities. It often arises from a lack of clear insight in the core product and the
core competencies of a business. It is super important to recognize the importance of core competencies
in entering an emerging market.
Case Studies
Multiple examples from around the world can be cited in support of the concept of core competencies:
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NEC asserts that they use 18% of their earnings for R&D. NEC of Japan investigates its core
competencies every 5 years. With a spending of 18% in R&D they have a boastful array of 36 core
techniques in total.
Apple as an organization developed products that are rich in design and user experience. This gave
them a distinguished brand image in the market, which stands even now in the face of multiple
competitors. Apple products are sold with high margins.
3M as a company is a perfect example of commitment to developing core competencies. It has a range

of diversified products that include post-it notes, magnetic tapes, photographic film, pressure sensitive
tapes and coated abrasives. These all have quite different production technologies, end-consumers, and
channel of distribution. All this is connected with a few competencies in substrates, coatings, and
adhesives and a culture which was developed internally during its years of operations.
Canon cornered the copier market in 1990s by investing a lot in core competencies. Before PC copiers
became available in 1982, copying was done on a departmental basis within companies and through
commercial copy centers. Copy centers served a range of copying needs, from small copying jobs to large,
high speed/high volume projects involving document preparation. Satisfaction of copying needs depend
on a copier’s price, quality, performance, features, maintenance, and after-sales support. Those factors
became the basis for defining various market segments. The most profitable segment was of course the
large volume one in which Xerox was the market leader. Thus, a gap existed between the companies’
performance and the opportunity in terms of small volume copier market. In other words, companies
around the world were placing a high value on getting a small, relatively inexpensive personal copier and
thus an easy-to-use, durable, low priced, and maintenance-free small copier awaited innovation. Canon
approached the problem by assembling a task force of 200 people and developed a series of core
products; disposable cartridges, instant toner fusers, and other components to decrease the size as well
as the cost. Thus, an entirely new product was born which was reliable and required less servicing. This
product was developed and launched in less than 3 years, which really put Canon towards becoming a
competent player in printer technology.
A hospital in Singapore, Mount Elizabeth Hospital, is well known for organ transplantations. That is the
core competency of this hospital.
This hospital may as well have doctors and nurses from various countries to create a multi-ethnic
workforce for better communication with a better patient management. That would be their core
competency.
Arguments and Examples Against Core Competency?
Prahalad’s paper in 1990 was in many ways groundbreaking. This concept changed the paradigm of
strategic consulting. The whole western management shifted from the rigid strategic guideline of Michael
Porter to a more fluid strategic intent. However, two decades after the introduction of this concept we
are shifting again. The market now is much more dynamic in the presence of rapidly changing markets
and user needs. China’s low cost manufacturing and research capabilities can wreak on any
manufacturing organizations worldwide.
Changing consumer needs are making companies take help of smaller and design companies even for
their core products. For example, Apple bought SIRI and Nike taking help of Apple in creating a digital
experience for its customers. Netflix, though their core competency is said to be content delivery, but
they are now venturing into original content creation too.
These examples cannot be taken as argument against core competencies keeping in mind the short-term
time horizon they are being applied to.
Core competency is a hard concept to grasp. The resources and patience required for the development of
even a single competency is huge. A strategic mindset and focus on achieving a long-term global
leadership is important to develop a strategic intent.
We think our readers should kind in mind one thing. Core competencies are needed to develop a global
leadership and long term competitive advantages. A company may be highly profitable even without
developing a core competency, but only for a short period.
ENTREPRENEURSHIP Career Opportunities 1
Course Module
Module 003 | Career Opportunities
Entrepreneurs start new businesses and take on the risk and rewards of being an owner. This is the
ultimate career in capitalism - putting your idea to work in a competitive economy. Some new ventures
generate enormous wealth for the entrepreneur. However, the job of entrepreneur is not for everyone.
You need to be hard-working, smart, creative, willing to take risks and good with people. You need to
have heart, are motivated and driven.
Objectives:
1. Explore Job Opportunities for Entrepreneurship as a career.
2. Understand the benefits and downside of Entrepreneurship as a career.
3. Define the required qualities of an Entrepreneur.
Careers in Entrepreneurship
One of the best things about pursuing a career as an entrepreneur is the wide-open possibilities. There is
room in many economies throughout the globe for entrepreneurship - such as India, Brazil, Dubai, the
U.S. or Kenya. There are many industries where wealth creation is possible be it the Internet and IT,
personal services, media, engineering or small local business (e.g., dry cleaning, electronics repair,
restaurants). However, there is a downside of entrepreneurship too. Your life may lack stability and
structure. Your ability to take time off may be highly limited. Moreover, you may become stressed as you
manage cash flow on the one hand and expansion on the other. Three out of five new businesses in the
U.S. fail within 18 months of getting started.
It is important to be well informed and understand what is and is not realistic. The web is chock-full of
come-ons promising to make you rich. Avoid promotions that require you to pay up front to learn some
secret to wealth. Understand that the market is more or less efficient - which means that if a bunch of
people know a sure way to be a millionaire then the opportunity has probably already been competed
away. On the other hand, look for inefficiencies in markets. Places where a better idea, a little ingenuity
or some aggressive marketing could really make a difference. Think about problems that people would
pay to have a solution to. It helps to know finance. It is necessary to really know your product area well.
What do consumers want? What differentiates you from the competition? How do you market this
product? A formal business plan is not essential, but is normally a great help
in thinking through the case for a new business. You'll be investing more in it than anyone else, so treat
yourself like a smart, skeptical investor who needs to be convinced that the math adds up for the
business you propose starting.
Entrepreneurs have many personalities. A number never finished college. Some are fiery revolutionaries.
Some are gentle souls with a good idea. Some are driven but difficult. Some have grown up in the most
difficult circumstances imaginable - emerging with enormous determination to strive for greatness.
Others are pleasant, personable and compassionate renegades. Generally, there will be a life event, key
motivator or a source of inspiration that causes a person to strike out on their own rather than work
inside a larger company. Sometimes it is cubicle fatigue or, worse, being fired. Other times it is an "aha
moment" where an insight or innovation into how an industry or business could be done differently
arises. Sometimes it is a bad boss.
The possibilities in entrepreneurship are endless. The rewards can be high. Moreover, the risks are
undoubtedly high too. Nevertheless, if you are driven, creativity and the desire to be your own boss, this
may very well be the career for you.
Eight Jobs You Can Get With an Entrepreneurship Degree
1. Mid-level management. At big companies, the C-level folks develop ideas, the ground force does the
work, and mid-level management converts the idea into execution. Graduates with entrepreneurial
degrees are well suited for this opportunity.
2. Business consultant. The Fortune 500 is ripe with business consultants. They need people who can go
to a client site, identify problems and fix them. That is what an entrepreneur does, and that is why this
job is perfect for you. You have the training to help identify things that others may not notice and the
training to know how to fix them.
3. Sales. Someone who works in sales or runs the department needs to know how businesses run. They
need to know how to represent a company, manage accounts, and follow up on leads.
4. Research and development. To work in R&D, you need to understand business concepts, procedures,
and practices. With all of the training and education, someone has received learning about
entrepreneurship; they are well prepared for this type of position.
5. Not-for-profit fundraiser. Being able to raise funds requires understanding the importance of business
and networking relationships. It is a great place for someone with this type of degree because you will
have experience in studying advanced concepts that can be used to your advantage on the job.
6. Teacher. Now here me out on this one. I am not suggesting that you go teach entrepreneurship. I
suggest you teach a core competency (e.g., math, history, literature, etc.), but teach students the
entrepreneurial side. Teach them the benefits of math to business, history to innovation, and literature
to persuasive advertising.
7. Recruiter. Having had courses that cover operations management, leadership, and a variety of others,
you most likely have a keen sense of what type of person is needed to fulfill a position. Companies who
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recruiters rely upon someone being not just people savvy, but having an in-depth business sense as well.
8. Business reporter. If you can write articles, or pick up a quick class to learn it, you are in a prime
position to take the lead on covering a local business beat. You will understand the field and concepts
and can use your knowledge to make the business section that much more interesting and telling.
ENTREPRENEURSHIP Recognize a Potential Market 1
Course Module
Module 004 | Recognize a Potential Market
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 usually measured by either sales value or sales
volume.
Objectives:
1. Recognize the characteristics of a potential market.
2. Identify market problems.
3. Build products to meet customers’ needs.
Determine Market Potential
Once you have established that an opportunity matches your business’s vision, goals, and financial
indicators, you are ready to assess its market potential by examining specific key factors. Market research
will enable you to more accurately assess the following points:
Ability to compete – Which opportunity offers the potential for you to compete most effectively in the
marketplace based on a price/cost advantage or market differentiator? If you will not be able to compete
effectively, be wary of such an endeavor. Build on your strengths to increase the chances of future
successes.
Duration of the opportunity – Will the opportunity last long enough for you to seize it and reap its
rewards? Duration is critical to determining attractiveness. For example, a new product or service based
on a long-term trend, such as a changing demographic, has an enduring window of opportunity. One
based on a fad, such as the latest fashion trend, has a limited life. Another consideration is how long you
have before competition might flood the marketplace.
Growth potential – In many cases, long-term growth rather than immediate rewards make one
opportunity more attractive than another does. An entrepreneur may decide to offer a new product in a
growth area rather than pursuing sales of existing products that have minimum growth potential. Is the
sales potential sufficient to make it worthwhile? Even if you can dominate a small market, it may not be
worth your while.
Risks and rewards – A certain amount of risk is involved in all entrepreneurial ventures, and growth is no
different. How much will the opportunity cost to pursue in terms of time, money, and physical resources?
What is your potential return on your investment? Are the risks acceptable to you and your business? Do
the rewards compensate for the risks?
Keep in mind that typically the risks associated with growth opportunities increase as you move away
from products and markets you know into products and markets that are new to you. Costs for
researching and developing new products and researching and penetrating new markets will also
increase.
Identifying Market Problems
To deliver products that solve your target customers’ problems, you must first identify market problems.
These problems may be stated directly as customer needs or implied indirectly.
Your market consists of:
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
Traps to Avoid When Listening to Your Market
Ensure that you listen to all of the people that comprise your market to avoid falling into the following
traps. Each trap is not entirely bad, but can become problematic when it becomes your only focus. The
key is to balance your focus to ensure that you are really listening to your entire market at the same time.
1. Focusing only on innovation and the competition.
As an entrepreneur, it is easy to focus on building innovative solutions that do not connect directly to
market problems; just because you can innovate, does not always mean that you should.
It is also easy to pay too much attention to what competitors are doing and expend resources on trying to
beat them to market. In many cases, the customer does not care about extra features.
Instead, ask the following questions to ensure that you are solving a problem for your target market:
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● What problem does this solution solve?
● Is this a problem experienced by my target market?
● What would my target market do if I did not solve this problem?
While it is always a good idea to keep abreast of what your competitors are doing, ensure that the
market wants the problem solved.
2. Focusing only on customers.
Henry Ford said, “If I had asked people what they wanted, they would have said faster horses.”
Customers understand problems, but they cannot help you to move your product forward. They know
what you provide, and tend to stay inside that mindset.
Customers are a source of input, but not the only source of input. This is why talking to prospects and
target market users (who have not purchased your products) is key to rounding out the picture. They
often see things beyond your current product.
3. Focusing only on revenue.
By listening only to prospects, and delivering only what the next customer wants, you will gain revenue
but miss market opportunities. It is critical to find a balance between prospects and customers to ensure
that your future revenue is protected, while still keeping existing customers happy.
Stated Versus Silent Market Needs
Stated needs are explicit statements from your market that declare, “I want a product to do X.” While
stated needs are important, they are not as powerful as silent needs, which are problems with yet
undefined solutions.
When interviewing potential users, your goal is to understand your target market’s everyday problems;
whether or not you believe that, you can initially solve those problems.
Example:
While doing market research, a major TV manufacturer uncovered the problem that people regularly
misplace their TV remote control. Customers did not identify this as a problem that needed solving, but it
was a common issue.
By listening to the customers’ silent need, the company was able to develop a feature that resonated
with its target market (a “remote-control finder” button on the TV itself).
Using this outside-in approach enables you to concentrate on and solve your target market’s problems. It
removes the guesswork from product development and reduces concerns related what your competitors
are developing. Listening to the market is the best research you can do to ensure that you build the right
solutions.
The Three Pieces of Entrepreneurship
In today’s world, especially living in the San Francisco Bay area, everyone has his or her stereotype of
what an entrepreneur is. Are they someone who wears a hoodie? Someone who eats pizza and plays
video games at work at 3 am? On the other hand, someone else who neglects all for her garage
laboratory? They might be entrepreneurs, but at the real heart of entrepreneurship are three things: the
ability to identify or recognize opportunity, the ability to review or assess opportunity, and last but not
least, the ability to successfully execute and realize opportunity. While these tasks seem straightforward
on paper, the skills you need for each one are very different, and it is difficult to be good at all of them.
To be a successful entrepreneur, you need to excel at all three, all at the same time.
Opportunity Recognition
The people who typically excel at opportunity recognition are the right-brain creative type people. These
people are clever and look at the same situations that everyone else does, but envision something
different. They see new angles, new possibilities, and new ways to do things. Scientists, especially those
in the heavily analytical fields, often struggle with this phase. Being a scientist, we strive for
reproducibility and have the mindset that if A + B = C today, then A + B = C tomorrow. People who excel
at opportunity recognition often look at a situation and say, what if tomorrow, A + B = D? Then what?
Opportunity recognizers truly think outside the box, stretch the limits, and are combinatorial in non-
traditional ways.
While the opportunity recognition phase is crucial when beginning a new enterprise, it is important to
seek new opportunities throughout the entire lifetime of any enterprise. To stay ahead and on top of the
market, companies must constantly recognize opportunity as they continue to grow and evolve. Steve
Jobs is the quintessential opportunity recognizer of our era; his iterations of Apple have successfully
capitalized on opportunity after opportunity. Facebook also excels in opportunity recognition. As
Facebook usage increased, advertisers wanted a piece of the action, thus the ability to “Like” “Pages” was
born.
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Opportunity Assessment
The opportunity review phase is where scientists generally stand out in the entrepreneurship process.
The opportunity review is when the analytical assessment of the opportunity that was recognized occurs.
During this stage, an entrepreneur must assess potential strategies and business models as well as
conduct market and economic analyses in order to establish an answer to the question: Can I bring this
idea to market in an economically successful way?
Next, it is time to construct a business plan, a concept any MBA student knows all too well! A good
business plan will answer several key questions: What is the market for my good or service? What does
the market need and/or want? Who are my competitors? How will I create and sustain a competitive
advantage? Is my product or service distinct and unique? If you are a “me too” enterprise, meaning that
you are simply imitating another business’s product or service, then you will only be able to do as well as
the firm your imitating, never better. To be better, you must differentiate yourself in some way such as
differentiation by price, value, features and benefits, guarantee, location, retail availability, or
specialization.
Other questions to consider during the assessment phase: What are the intellectual property implications
of your core idea? Do you plan to trademark, copyright, or have proprietary information? Are you going
to be able to get the start-up capital to trademark or copyright without divulging the uniqueness of the
company?
What is the model that builds in sufficient revenue compared to cost? How will you pay back investors,
on top of all ongoing costs, supporting employees, maintaining raw materials and all of your other
expenses? How impressive do your income statements and balance sheets look? How would you price
this technology, idea, or product?
The 2007 book by Heath and Heath titled Made to Stick: Why Some Ideas Survive and Others Die talks
about the difference between things you hear once and never forget and things you hear over and over,
but fail to remember. For example, we all remember hearing “you can see the Great Wall of China from
outer space,” but the best part is – it’s not true! No matter how many times this has been put to rest, it
has never left the public consciousness (the Great Wall of China is about as wide as a highway; you
cannot see highways from outer space). So how do you make your company that memorable? According
to Made to Stick, you need to have a “sticky” tagline that is simple, unexpected, concrete, credible,
emotional, and told as a story.

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Just like opportunity recognition, the opportunity assessment process never actually ends in a business. A
plan is necessary, for sure, but an entrepreneur must be nimble in the face of market changes and forces.
Perhaps the most difficult challenge of a start-up company or a budding scientist is to make the correct
decision between staying the course with the plan and determining when it is most beneficial to detour
from the plan based on reactionary forces. As an entrepreneur, this is the largest struggle I personally
face.
Opportunity Realization
The opportunity realization is what I call the “Get it Done” phase. During this phase, it is time to take
advantage of the situation and execute all of the great ideas and projections ascertained from the two
prior phases. In my experience, many scientists struggle with this phase. This phase is tough and
unpredictable. It is a combination of doing things by the book and dealing with inimitable people and
unique situations. Now it is time to build a team, raise money, develop a marketing strategy and a sales
approach, implement your sticky idea. From a scientist’s point of view, this can feel a lot like publishing a
peer-reviewed manuscript.
Implementing the plan is often not as simple as it seems. You are suddenly faced with a completely new
set of questions: is your business scalable? Does your team work well together?
A great book published in 2010 that explores the realization side of the business is Stuart Diamond’s
Getting More: How to Negotiate to Achieve Your Goals in the Real World. Getting More takes the
premise that there are pretty standard ways of dealing with common life and business issues. If you
change how you approach these common situations by changing your behavior, can you change the
behavior of the people around you? Can you train yourself to be a tougher negotiator, to get more out of
every situation? When is it more efficacious to be nice? To be tough? How tough is too tough? This book
is a definite must-read for any aspiring entrepreneur.
In theory, everything that makes a good scientist should make a good entrepreneur. However, as a
current graduate student, I feel that we are not often taught how to become applied scientists or even
made aware of different aspects of our professional lives that could be used toward entrepreneurship.
Just like delivering any paper, patent or scientific discovery, being an entrepreneur means having several
ideas, exploring the most “sticky” ones, and finally implementing the winning initiative with full force.
ENTREPRENEURSHIP Analyze the Market Need 1

Course Module
Module 005 | Analyze the Market Need
To be successful, you have to be clear on what it is you are offering your customers.
Many businesses offer too many products and services, to too many different types of customers, at too
many prices and in too many markets. This leads to diffusion of effort, increased expenses and reduced
profitability. Success in business, though, requires that you develop absolute clarity about the products
and services you are going to offer.
Entrepreneurs tend to be optimistic and ambitious. For this reason, they become enthusiastic about
offering more and different products and services to more and different markets. They are easily
distracted by new profit opportunities and often fail to focus on those areas where the greatest business
success is possible for them.
Objectives:
1. Describe the unique selling proposition and value proposition that differentiates one’s product/service
from existing products/services.
2. Recognize the importance of marketing analysis in your business plan.
Conducting a Market Analysis for Your Business Plan
One of the most critical sections of your business plan is your market analysis. Find out just what
information you need to know about your potential customers.
Every business plan should include market analysis. This is one of the first and most important reasons to
do a business plan. Moreover, whether you are just starting a new business or reviewing an existing
business, you should renew your market analysis at least every year. Markets change--a business needs
to watch for changes in its market.
The market you need to look at is your potential market, not the actual market served, the one that is
limited to your existing customers. Your target market is much wider than just the people you already
reach. It is the people you might someday reach, or people you could reach, that you need to be
concerned about.
For example, the market of a local movie theater or restaurant includes not just the people who regularly
go there but also everybody who lives within driving distance. The market for a landscaping business
includes all the homes and commercial properties within a logical reach. The market for downloadable e-
books over the internet includes everyone connected to the web. The market for personal computers
includes homes, schools, businesses, and government organizations.
It is your plan--and every plan is different--so you need to know as much as you can about your target
market.
Getting the Information
The information sources that will help you conduct a market analysis are different for every business
plan. For example, you might need local information you can get from your local chamber of commerce.
You might also need to find other government statistics, or other commercial statistics, so you may be
conducting some internet searches to track down the information.
Not all the information you need is going to be publicly available, and you may have to settle for
educated estimates. Sometimes you will have to extrapolate information from different sources to get
the information you are seeking. I have seen good market research come from telephone directories,
catalogs, industry association statistical compilations, real estate information and density maps.
Segmentation
Always try to divide your target market into useful slices or segments. For years, I consulted with a
computer manufacturing company that targeted such market segments as homes, small offices,
businesses, educational organizations, and government. Dividing the market into these segments helped
the company address the more specific market needs, media, pricing patterns and decision criteria in
each of their different market segments.
Segmentation helps you target specific people with specific messages and helps you focus on user needs.
Families might need quick, consistent service while students might need late-night service. Families read
the newspaper; students read posters on bookstore walls. Knowing your market segments will help you
make smart decisions when it comes to providing the products and services that will work best for them
and for communicating with them.
Market Size and Growth
You need to be able to measure and quantify your market. For example, if local homeowners are part of
your target market, then you should be able to count them. You need to know whether you have 500
people in your market, 200,000, or 2 billion. Be able to show what the total market is for your business.
When it comes to market growth, you need to think about percentage change as a market forecast. Is the
number of homeowners in your target market increasing or decreasing? By how much per year? How
many older workers retire every year, and how is this changing? How many people eat in restaurants in
your market area, and how is this behavior changing? Market ENTREPRENEURSHIP Analyze the Market
Need 3
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forecasts start with the total numbers of possible purchasers in each market segment, then project
percentage change over the next three to five years.
Market Trends
You need to understand what is going on with your market. What marketing trends and fashions do you
see having an influence on your market segments? If you are selling cars, for example, is there a trend
that shows people responding to higher gasoline prices or more environmental concerns? In computers,
is there a trend toward more power and lower prices? How does the increase in TV recorder equipment
affect your market? The questions that affect target markets will be different for every business, and
these are just examples. What is important is that as you create your business plan, you become aware of
the market trends that affect your specific market.
Know Your Customers’ Needs
However good your product or service is, the truth is that no one will buy it if they do not want it or
believe they do not need it. Moreover, you will not persuade anyone that they want or need to buy what
you are offering unless you clearly understand what it is your customers really want.
Knowing and understanding customer needs is at the center of every successful business, whether it sells
directly to individuals or other businesses. Once you have this knowledge, you can use it to persuade
potential and existing customers that buying from you is in their best interests.
This guide tells you what you need to know about your customers, how to use this information to sell to
them more effectively, and how to win business from your competitors.
Why do your customers need you?
What do you know about your customers?
The customer's current supplier
Ten things you need to know about your customers
Why Do Your Customers Need You?
Every business needs a reason for their customers to buy from them and not their competitors. This is
called a Unique Sales Proposition (USP). Your USP can be identified by completing the phrase "Customers
will buy from me because my business is the only..."
Your USP can change as your business or your market changes, and you can have different USPs for
different types of customer.
For example:
A stationery store could offer a free same-day delivery service for its business customers within a local
area - an effective USP for businesses that need fast delivery
The same stationery store could offer a 5 per cent discount to businesses that spend more than $1,000
a month - this would be a USP for cost-conscious customers
The stationery store could also make sure it offers the most comprehensive stock of artists' materials in
the area - a USP for local professional or amateur artists
All of these USPs can be effective because they are driven by what the customer looks for when making a
buying decision.
It is a good idea to review your USPs regularly. Can you tailor your products or services to better match
your customers' needs? Consider asking your customers why they buy from you. This will tell you what
they think your USP is - this may differ from what you think your USP is.
It is also useful to check constantly what your competition is doing. Remember - if your competitors are
doing the same, your USP is not unique any more.
What Do You Know About Your Customers?
The more you know about your customers, the more effective your sales and marketing efforts will be. It
is well worth making the effort to find out:
Who they are
What they buy
Why they buy it
If you are selling to other businesses, you will need to know which individuals are responsible for the
decision to buy your product or service. For information on targeting decision-makers, see our guide on
how to target the right people in an organization.
You can learn a great deal about your customers by talking to them. Asking them why they are buying or
not buying, what they may want to buy in the future and asking what other needs they have can give a
valuable picture of what is important to them.
Strong sales are driven by emphasizing the benefits that your product or service brings to your
customers. If you know the challenges that face them, it is much easier to offer them solutions.
It is also well worth keeping an eye on future developments in your customers' markets and lives.
Knowing the trends that are going to influence your customers helps you to anticipate what they are
going to need - and offer it to them as soon as they need it.
You can conduct your own market research and there are many existing reports that can help you build a
picture of where your customers' markets - and your business - may be going.
The Customer's Current Supplier ENTREPRENEURSHIP Analyze the Market Need 5
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Chances are your potential customer is already buying something similar to your product or service from
someone else. Before you can sell to a potential customer, you need to know:
Who the customer's current supplier is

If the customer is happy with their current supplier
If buying from you would offer the customer any benefits - and, if so, what those benefits would be
The easiest way to identify a potential customer's current supplier is often simply to ask them. Generally,
people are very happy to offer this information, as well as an indication of whether they are happy with
their present arrangements.
If you can find out what benefits they are looking for, you stand a better chance of being able to sell to
them. The benefits may be related to price or levels of service, for example. Are there any benefits your
business can offer that are better than those the potential customer already receives? If there are, these
should form the basis of any sales approach you make.
Ten Things You Need to Know About Your Customers
1. Who they are
If you sell directly to individuals, find out your customers' gender, age, marital status and occupation. If
you sell to other businesses, find out what size and kind of business they are. For example, are they a
small private company or a big multinational?
2. What they do
If you sell directly to individuals, it is worth knowing their occupations and interests. If you sell to other
businesses, it helps to have an understanding of what their business is trying to achieve.
3. Why they buy
If you know why customers buy a product or service, it is easier to match their needs to the benefits your
business can offer.
4. When they buy
If you approach a customer just at the time they want to buy, you will massively increase your chances of
success.
5. How they buy
For example, some people prefer to buy from a website, while others prefer a face-to-face meeting.
6. How much money they have

You will be more successful if you can match what you are offering to what you know your customer can
afford.
7. What makes them feel good about buying
If you know what makes them tick, you can serve them in the way they prefer.
8. What they expect of you
For example, if your customers expect reliable delivery and you do not disappoint them, you stand to
gain repeat business.
9. What they think about you
If your customers enjoy dealing with you, they are likely to buy more. In addition, you can only tackle
problems that customers have if you know what they are.
10. What they think about your competitors
If you know how your customers view your competition, you stand a much better chance of staying
ahead of your rivals.
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Module 003 | Career Opportunities
Entrepreneurs start new businesses and take on the risk and rewards of being an owner. This is the
ultimate career in capitalism - putting your idea to work in a competitive economy. Some new ventures
generate enormous wealth for the entrepreneur. However, the job of entrepreneur is not for everyone.
You need to be hard-working, smart, creative, willing to take risks and good with people. You need to
have heart, are motivated and driven.
Objectives:
1. Explore Job Opportunities for Entrepreneurship as a career.
2. Understand the benefits and downside of Entrepreneurship as a career.
3. Define the required qualities of an Entrepreneur.
Careers in Entrepreneurship
One of the best things about pursuing a career as an entrepreneur is the wide-open possibilities. There is
room in many economies throughout the globe for entrepreneurship - such as India, Brazil, Dubai, the
U.S. or Kenya. There are many industries where wealth creation is possible be it the Internet and IT,
personal services, media, engineering or small local business (e.g., dry cleaning, electronics repair,
restaurants). However, there is a downside of entrepreneurship too. Your life may lack stability and
structure. Your ability to take time off may be highly limited. Moreover, you may become stressed as you
manage cash flow on the one hand and expansion on the other. Three out of five new businesses in the
U.S. fail within 18 months of getting started.
It is important to be well informed and understand what is and is not realistic. The web is chock-full of
come-ons promising to make you rich. Avoid promotions that require you to pay up front to learn some
secret to wealth. Understand that the market is more or less efficient - which means that if a bunch of
people know a sure way to be a millionaire then the opportunity has probably already been competed
away. On the other hand, look for inefficiencies in markets. Places where a better idea, a little ingenuity
or some aggressive marketing could really make a difference. Think about problems that people would
pay to have a solution to. It helps to know finance. It is necessary to really know your product area well.
What do consumers want? What differentiates you from the competition? How do you market this
product? A formal business plan is not essential, but is normally a great help
in thinking through the case for a new business. You'll be investing more in it than anyone else, so treat
yourself like a smart, skeptical investor who needs to be convinced that the math adds up for the
business you propose starting.
Entrepreneurs have many personalities. A number never finished college. Some are fiery revolutionaries.
Some are gentle souls with a good idea. Some are driven but difficult. Some have grown up in the most
difficult circumstances imaginable - emerging with enormous determination to strive for greatness.
Others are pleasant, personable and compassionate renegades. Generally, there will be a life event, key
motivator or a source of inspiration that causes a person to strike out on their own rather than work
inside a larger company. Sometimes it is cubicle fatigue or, worse, being fired. Other times it is an "aha
moment" where an insight or innovation into how an industry or business could be done differently
arises. Sometimes it is a bad boss.
The possibilities in entrepreneurship are endless. The rewards can be high. Moreover, the risks are
undoubtedly high too. Nevertheless, if you are driven, creativity and the desire to be your own boss, this
may very well be the career for you.
Eight Jobs You Can Get With an Entrepreneurship Degree

1. Mid-level management. At big companies, the C-level folks develop ideas, the ground force does the
work, and mid-level management converts the idea into execution. Graduates with entrepreneurial
degrees are well suited for this opportunity.
2. Business consultant. The Fortune 500 is ripe with business consultants. They need people who can go
to a client site, identify problems and fix them. That is what an entrepreneur does, and that is why this
job is perfect for you. You have the training to help identify things that others may not notice and the
training to know how to fix them.
3. Sales. Someone who works in sales or runs the department needs to know how businesses run. They
need to know how to represent a company, manage accounts, and follow up on leads.
4. Research and development. To work in R&D, you need to understand business concepts, procedures,
and practices. With all of the training and education, someone has received learning about
entrepreneurship; they are well prepared for this type of position.
5. Not-for-profit fundraiser. Being able to raise funds requires understanding the importance of business
and networking relationships. It is a great place for someone with this type of degree because you will
have experience in studying advanced concepts that can be used to your advantage on the job.
6. Teacher. Now here me out on this one. I am not suggesting that you go teach entrepreneurship. I
suggest you teach a core competency (e.g., math, history, literature, etc.), but teach students the
entrepreneurial side. Teach them the benefits of math to business, history to innovation, and literature
to persuasive advertising.
7. Recruiter. Having had courses that cover operations management, leadership, and a variety of others,
you most likely have a keen sense of what type of person is needed to fulfill a position. Companies who
use
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recruiters rely upon someone being not just people savvy, but having an in-depth business sense as well.
8. Business reporter. If you can write articles, or pick up a quick class to learn it, you are in a prime
position to take the lead on covering a local business beat. You will understand the field and concepts
and can use your knowledge to make the business section that much more interesting and telling.
ENTREPRENEURSHIP How to Identify a Target Market and Prepare a Customer Profile 1

Course Module
Module 007 | How to Identify a Target Market and Prepare a Customer Profile
In order to market your product or service, it is imperative that you tailor your marketing and sales
efforts to specifically reach the segment of population that will most likely buy your product or service. It
is critical that you first determine or clearly identify your primary market. Your energies and funds then
can be spent more efficiently.
If you do not know who your customers are, how will you be able to assess whether you are meeting
their needs? Since success depends on your being able to meet customers’ needs and desires, you must
know who your customers are, what they want, where they live and what they can afford.
We have all heard a business owner say, "My product is terrific! It appeals to everyone." Many of us have
also seen small businesses that try to be all things to all people. This is a difficult, if not impossible, bridge
to cross.
Targeting your market is simply defining who your primary customer will be. The market should be
measurable, sufficiently large and reachable.
Objectives:
1. Identify a target market.
2. Understand how to prepare a customer profile.
3. Recognize the core concepts of a target market.
Types of Market
A market is simply any group of actual or potential buyers of a product. There are three major types of
markets.
The consumer market. Individuals and households who buy goods for their own use or benefit are part of
the consumer market. Drug and grocery items are the most common types of consumer products.
The industrial market. Individuals, groups or organizations that purchase your product or service for
direct use in producing other products or for use in their day-to-day operations.
The reseller market. Middlemen or intermediaries, such as wholesalers and retailers, who buy finished
goods and resell them for a profit.
Identifying Your Market
Here are three steps to follow when identifying your market:
1. Identify Why a Customer Would Want to Buy Your Product/Service.

The first step in identifying your target market understands what your products/services have to offer to
a group of people or businesses. To do this, identify your product or service’s features and benefits. A
feature is a characteristic of a product/service that automatically comes with it.
For example, if a toothpaste has a stain-removing formula, that is a feature. The benefit to the customer,
however, is whiter teeth.
While features are valuable and can certainly enhance your product, benefits motivate people to buy.
An example is anti-lock brakes; they are features on a car, but the benefit to the consumer is safety.
By knowing what your product/service has to offer and what will make customers buy, you can begin to
identify common characteristics of your potential market.
For example, many different consumers desire safety as a benefit when purchasing a car. Rather than
targeting everyone in their promotional strategy, a car manufacturer may opt to target a specific group of
consumers with similar characteristics, such as families with young children. This is an example of market
segmentation.
2. Segment Your Overall Market.
It is a natural instinct to want to target as many people and groups as possible. However, by doing this
your promotional strategy will never talk specifically to any one group, and you will most likely turn many
potential customers off. Your promotional budget will be much more cost effective if you promote to one
type of customer and speak directly to them. This allows you to create a highly focused campaign that
will directly meet the needs and desires of a specific group. Again, this is called market segmentation.
Market segmentation is the process of breaking down a larger target market into smaller segments with
specific characteristics. Each group requires different promotional strategies and marketing mixes
because each group has different wants and needs. Segmentation will help you customize a
product/service or other parts of a marketing mix, such as advertising, to reach and meet the specific
needs of a narrowly defined customer group.
Larger markets are most typically divided into smaller target market segments on the basis of geographic,
demographic, psychographic and behavioristic characteristics:
Geographic. Potential customers are in a local, state, regional or national marketplace segment. If you are
selling a product such as farm equipment, ENTREPRENEURSHIP How to Identify a Target Market and
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geographic location will remain a major factor in segmenting your target markets since your customers
are located in particular rural areas. Alternatively, if you own a retail store, geographic location of the
store is one of the most important considerations.
Climate is a commonly used geographic segmentation variable that affects industries such as heating and
air conditioning, sporting equipment, lawn equipment and building materials.
Decide if your business is going to do business on a local, regional, national or international level. Identify
the geographic region where your market is located. Identify specific boundaries within which you will do
business.
Demographic. Potential customers are identified by criteria such as age, race, religion, gender, income
level, family size, occupation, education level and marital status. Choose those characteristics of your
demographic target market that relates to the interest, need and ability of the customer to purchase your
product or service.
A demographic profile for a business would include such factors as customer size, number of employees,
type of products, and annual revenue. If you are a business-to-business marketer for example, you may
want to consider segmenting according to your target customer’s size. A printing company may decide to
target only magazine publishers that publish more than one magazine because they need high volume
accounts to make a profit.
Identify the following demographic characteristics of your market.
Consumer Market
Age
Income
Gender
Profession
Education
Family Size
Homeowner
Marital Status
Business Market
Geographic location
Size of Company
Annual revenue
Number of Branches
Number of Employees
Industry
Age of Company
Psychographic.
Many businesses offer products based on the attitudes, beliefs and emotions of their target market. The
desire for status, enhanced appearance and more money are examples of psychographic variables. They
are the factors that influence your customers’ purchasing decision. A seller of luxury items would appeal
to an individual’s desire for status symbols.
Business customers, as well as consumers, can be described in psychographic terms. Some companies
view themselves as cutting edge or high tech, while others consider themselves socially responsible,
stable and strong. Still others see themselves as innovative and creative. These distinctions help in
determining how your company is positioned and how you can use the company’s position as a
marketing tactic.
The following are psychographic variables. Identify the characteristics of your target market.
Consumer Market
Lifestyle
Fun-Seeking
Family Stage
Trendy
Hobbies
Status Seeking
Sports Enthusiasts
Conservative
Forms of Entertainment
Socially Responsible
Publication
Environmentally Conscious
Influencer
Subscriptions
Family Oriented
Technical
Workforce Type
Management Style
Other
Business Market
Business Style
Industry Leader
Business Stage
Innovative
Employee Relations
Conservative
Trade Associations
Socially Responsible
Business Products/Stable
Services Used
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Employee Friendly
Publication Subscriptions
Workforce Type
Management Style
Behavioristic. Products and services are purchased for a variety of reasons. Business owners must
determine what those reasons are, such as: brand, loyalty, cost, how frequently and at what time of year
customers in a segment use and consume products. It is important to understand the buying habits and
patterns of your customers. Consumers do not rush and buy the first car they see, or the first sofa they sit
on. A Fortune 500 company doesn’t typically make quick purchasing decisions.
Answer the following questions regarding your market.
Reason/occasion for purchase?
Number of times they will purchase?
Timetable of purchase, every week, month, quarter, etc.?
Amount of product/service purchased?
How long to make a decision to purchase?
Where customer purchases and/or uses product/service?
Most businesses use a combination of the above to segment their markets. Demographic and geographic
criteria will usually qualify your target markets so you can establish if segment members have enough
money to purchase your offering or if they are in a location that’s accessible to the product. Most
businesses then use the psychographic and behavioristic factors to construct a promotional campaign
that will appeal to the target market.
3. Research Your Market
Some or all these reference tools can be found in the reference collection of any public library or college
library that supports local business or a business school.
Government Data
A great deal of demographic data is either free or inexpensive because it is collected and published by the
government.
Commercial Sources of Demographic Statistics
Online databases have made it much easier than it used to be to sift through the mountains of
information created by the gatherers of statistics. You can also use online search engines such as Yahoo!
and Google to find database compilers and other vendors.
Demographic Publications
Magazines containing articles on demographic trends.
Demographic, Psychographic and Behavioristic

The primary vehicles to obtain this information are surveys and focus groups. Surveys are typically
anonymous and try to reach as many members of a target market as possible. Focus groups, on the other
hand, attempt to get an understanding of a specific market segment by questioning eight to 12 members
of that group to discover what psychographic and behavioristic factors might motivate the entire group.
You should consider hiring a marketing research firm, since executing both questionnaires and focus
groups could be complex undertakings. If hiring a marketing research firm is out of the question for your
business at this time, here are some suggestions for conducting your own survey research:
Your current customers can provide you with insight on potential customers and how to appeal to them.
You may also discover an opportunity to produce additional products to serve this market or improve on
an existing product. Ask yourself: What do I need to learn about my customers? Then construct questions
that will provide the answers. It can be as simple as asking a current customer:
Why did you purchase this product? How can this product be improved? Make sure you give them
enough space to answer.
If you have a retail outlet, you have the means of distributing a customer comment card or questionnaire.
A suggestion box is also a vehicle for obtaining information about your customers and their wants and
needs.
When mailing monthly invoices or statements, include a questionnaire and return envelope. If you
provide an incentive to those who return it, such as a gift or premium, you increase the chances of
getting it back.
Get statistics on the subscriber population for the trade journal that serves the market you want to
segment. Most major publications have demographic and behavioristic profiles of their readership. If you
are a manufacturer of a part used in printing presses, a magazine focusing on the printing industry can
provide you with valuable segmenting information. Simply call the advertising department and ask for a
media kit. While you are talking to the publisher’s representative, ask if there are any regular or special
articles, you should see for useful trade and demographic statistics.
Requesting a customer-organization’s annual report will provide you with business demographic
information.
Work with a local college. If you need help in designing and executing a market survey, contact a
marketing professor at a nearby college and offer it as a class project.
Identify your potential customers and question them.
Having complete a customer profile will assist you in developing the proper marketing strategies to be
successful in your target market. Remember, no two-customer profiles will be the same. You will have to
decide how much emphasis to place on a potential user’s lifestyle, loyalty, and spending habits. If you are
going to advertise heavily, you will want to know the media habits of potential customers as well.
Whatever information will help you better promote and sell your product should be included in your
customer profile.
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Choose the segmented target market(s) you will sell to
After identifying and defining the possible segments within your target market, you must face the critical
question of whether it would be profitable and feasible for you to pursue each identified segment, or
choose one or two. To make this decision, you must answer the following questions:
What is the financial condition of my firm? If you have limited resources at this time, you may want to
direct your marketing efforts to only one segment. A concentrated advertising campaign to reach one
market segment is likely to be more effective than a diffuse campaign attempting to reach two.
What segments are my competitors covering? Are they ignoring smaller segments that I can possibly
exploit? The printing company previously mentioned may decide to pursue small magazine publishers
because there are many competitors currently serving the needs of larger publishers. Alternatively,
Career Options may discover that since in their geographic location there are several firms that specialize
in helping professionals in transition, they should specialize in the recent college graduate market.
Is the market new to your firm? If so, it may be better for you to concentrate on one segment for now,
and expand to others when your initial segment has been successfully penetrated. Developing new
markets takes a greater commitment of time, money and energy.
Important Considerations:
If you pursue one segment of your target market and the demand for your product decreases, so will
your financial strength. In essence, you are putting all your eggs in one basket.
When your firm becomes well established in a particular market segment, it may be difficult for you to
move to another segment. This may occur due to your market reputation or popularity.
After you have mastered one particular segment, you can then begin to develop another. Directing your
firm’s marketing efforts at more than one market segment by developing a marketing mix for each
specific segment is known as multi-segment strategy. An example of a product that was traditionally
targeted at women and is now being targeted with variations in strategy at men is hair coloring.
The marketing mixes for multi-segment strategy may vary by product feature, price, and promotional
material and distribution methods. If product variations requires additional work, you may incur higher
production costs. Additionally, different promotional plans and distribution efforts will result in higher
marketing costs. Plan carefully, to make sure the costs do not outweigh the benefits.
Now think about all the characteristics you have identified and start formulating the promotional
campaign that will best address this specific target market. Start to formulate a picture or description of
your ideal customer. Make sure everything you do, from design, price to marketing, addresses your
market.
Core Concepts of a Target Market

A target market is a select group of customers in a larger audience or population in whom your company
decides to invest money to promote its brand, products or services. Companies often begin by breaking
down a larger market into smaller segments with similar demographic, lifestyle or behavioral qualities
and then identify a targeted segment for a given campaign.
Concrete
The whole point of defining a target market is to be as clear as possible whom you are speaking to
through marketing and promotions. Rather than trying to deliver one universal message in hopes of
reaching "everyone," you want to clearly depict your "typical" customer so that you know how to affect
them and where to find them for message delivery. Household cleaning products, for instance, are
historically promoted during daytime soap operas, since that is when a large contingent of stay-at-home
moms are available and watching.
Size and Growth Potential
Not all target markets are created equal. One of the key determinants when comparing one potential
market to another is the size. If two markets pose similar opportunities, the one that is the largest often
becomes the primary target. Growth potential is also a key consideration. If you see more obstacles in a
large market, you may choose a market that is small but growing fast. If you can get in early into a growth
market, you can entrench yourself as a major player.
Competitive Advantages
The level of competition affects a company's decision whether to make a play in a given target market. In
essence, you have to weigh the ability of your message to shine through against other competitors. For
instance, if one potential target market has five competitors and another has 10, the first seems riper.
However, you also need to consider how well your strengths align with that given market. In some cases,
you may enter a more competitive market because of greater customer demand and because your
strengths align well to give you advantages.
Profitability
An overriding issue in target market selection is profitability. Companies often identify two to three
potential discrete segments of customers who may have strong interest in the brand. Usually, you launch
your first promotional campaign to target the group you see as the most profitable once you build a loyal
following. As you maintain those relationships, you may begin messaging ENTREPRENEURSHIP How to
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a secondary market to expand. Marketing is an investment, and the market you feel provides the
greatest return is usually targeted first.
Players in Marketing
Any person or entity, which is a rival against another. In business, a company in the same industry or a
similar industry which offers a similar product or service. The presence of one or more competitors can
reduce the prices of goods and services as the companies attempt to gain a larger market share.
Competition also requires companies to become more efficient in order to reduce costs.
Market Players
There are often a number of different types of company or people playing in any marketplace.
Customers
The most important organization or people in the market are your customers. This includes both current
and potential customers.
Major customers
It is very common for most sales to be made to a relatively small set of big customers. These always need
careful attention and may have account/relationship managers assigned to them. A problem is that big
customers may also demand big discounts and special attention.
Minor customers
Minor customers buy less, but are useful as in aggregate they may buy quite a lot. The only time minor
customers are undesirable is when serving them costs more than the profit gained from them. This can
happen when they are angered or when they try to gain an unfair attention for their smaller payment.
Suppliers
Suppliers may sell directly into the market, for example selling spare parts, but largely they need to be
kept aligned to your strategy.
In some markets, suppliers also supply your competitors. When supply is short, the supplier may hold a
position of power in the choice of who to serve.
You can also have major and minor suppliers. Major suppliers are critical for everyday delivery and a
problem from them can cause delays or product quality issues.
Complementors
Complementors are those who sell non-competing products and which generally help your sales. For
example in a rock musical instrument market, drum and guitar manufacturers are complementors to one
another.
It is generally a good idea to collaborate closely with complementors as mutual benefit may be gained.
They may also seek to work with competitors, which can be a tricky situation -- but if it all adds up to
expanding the market, then this is beneficial. An alternative strategy, as with suppliers, is that if you can
lead the complementors to support you more, then competitors may be weakened.
Competitors
Competitors are those who have products and services similar to you and where customers who are
buying something will compare your offerings and prices directly, weighing one up against the other.
The interaction with competitors is usually directly antagonistic. You seek to convince customers that
your offerings are better and those competitors' offerings are worse. Nevertheless, there are times when
collaborating with competitors is helpful, for example in influencing sensible regulations.
Substitutors
Substitutors are like competitors but their products are not the same. The classic substitution is replacing
butter with margarine (a battle that is still raging). Other substitutions are more evolutionary, for
example, where typewriters were substituted by word processors.
Initially, substitutions may be seen as quite different, for example where computers were big and
expensive alternatives to the typewriter. Yet innovation and evolution continued and computers
eventually became cheaper than typewriters as well as offering benefits the typewriter could not
emulate.
A critical attribute of a substitutor group is that they all seek the same 'share of wallet'. Hence, when a
person is thirsty, all drinks are substitutes for one another.
Regulators
In any industry, standards are often helpful in many ways, from ensuring product safety to helping
suppliers create plug-compatible parts that enable economies of scale and hence lower product prices.
Regulation may be driven by collaboration between competitors. Independent organizations or even

governments, whose agendas may not align with company profit motives, may also create regulations.
An important part of regulation is policing, without which regulations become only guidelines. Sometimes
customers do their own policing, for example by not buying non-standard products. Independent
inspectors who can have draconian punitive powers may also do regulation.
It can be an important part of marketing to demonstrate conformance to regulations. Displaying safety

badges, showing ecological awards, and so on can help convince customers of the quality of the product
and the integrity of the firm. ENTREPRENEURSHIP How to Identify a Target Market and Prepare a
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Influencers
There are also groups and organizations who have no direct control but who will seek to promote their
own agendas by influencing players within the marketplace, including regulators and retailers. These
often have an ethical basis, for example ecological or animal rights activists.
Lobby groups who represent certain business interests may also be involved, although often indirectly
(for example in seeking to persuade regulators to create stronger controls).
Marketers need to be careful with influencers who can create bad publicity through demonstrations and
leaking information to the press. Influencers can be helpful if you listen to them and take their concerns
seriously.
Concepts of Marketing
There are five (5) different concepts of marketing, each of which vary in the function that they deal with.
For example – production concept deals with production and selling concept deals with selling. Each of
the concept was developed as per the need of the market. As the market changed, so did the concepts of
marketing. In addition, today, we have an opportunity to look at all five (5) concepts of marketing and
what they represent.
1. Production concept - Consumers prefer products that are widely available and inexpensive. The
production concept is more operations oriented than any other concept.
When the production concept was found, a production orientation business dominated the market from
the beginning of Capitalism to the mid 1950’s. During the era of the Production concept, Business
concerned itself primarily with production, manufacturing, and efficiency issues. This viewpoint was
encapsulated in Says Law which states Supply creates its own demand (from the French economist Jean –
Baptiste Say.) To put it another way, if a product is made, somebody will want to buy it. The reason for
the predominance of this orientation is there was a shortage of manufactured goods (relative to demand)
during this period so goods sold easily.
The basic proposition of the production concept is that customers will choose products and services that
are widely available and are of low cost. So business is mainly concerned with making as many units as
possible. By concentrating on producing maximum volumes, such a business aims to maximize
profitability by exploiting economies of scale. Managers try to achieve higher volume with low cost and
intensive distribution strategy. This seems a viable strategy in a developing market where market
expansion is the survival strategy for the business. Companies interested to take the benefit of scale
economies purse this kind of orientation.
In a production-orientated business, the needs of customers are secondary compared with the need to
increase output. Such an approach is probably most effective when a business operates in very high
growth markets or where the potential for economies of scale is significant. It is natural that the
companies cannot deliver quality products and suffer from problems arising out of impersonal behavior
with the customers.
2. Product concept - Consumers favor products that offer the most quality, performance, or innovative
features. The product concept believes in the consumer and it says the consumers are more likely to be
loyal if they have more options of products or they get more benefits from the product of the company.
The product concept proposes that consumers will prefer products that have better quality, performance
and features as opposed to a normal product. The concept is truly applicable in some niches such as
electronics and mobile handsets.
Two companies, which stand apart from the crowd when we talk about the product concept, are Apple
and google. Both of these companies have strived hard on their products and deliver us feature rich,
innovative and diverse application products and people just love these brands.
One problem, which has been associated with the product concept, is that it might also lead to marketing
myopia. Thus, companies need to take innovations and features seriously and provide only those, which
the customer needs. The customer needs should be given priority.
In the past, several of Microsoft product have been brought under the hammer with people feeling more
and more disgruntled with the operating systems because of lack of innovation and new features. Each
Microsoft operating system appears almost similar with just few tweaks.
On the other hand, innovating too soon becomes a problem. Several innovative products are marked as
experimental in the market instead of ENTREPRENEURSHIP How to Identify a Target Market and Prepare
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being adopted because of which these products have less shelf life and might have to be taken off the
market.
Thus, companies following the product concept need to concentrate on their technology such that they
provide with excellent feature rich and innovative products for optimum customer satisfaction.
3. Selling concept - Consumers will buy products only if the company aggressively promotes or sells these
products. Off course, in this era of marketing, we know that selling is not the only tactic to sell your
product. You have to focus on marketing as well.
During WWII world industry geared up for accelerated wartime production. When the war was over this
stimulated industrial machine turned to producing consumer products. By the mid 50’s supply was
starting to out-pace demand in many industries. Businesses had to concentrate on ways of selling their
products. Numerous sales techniques such as closing, probing, and qualifying were all developed during
this period and the sales department had an exalted position in a company’s organizational structure.
The Selling Concept proposes that customers, be individual or organizations will not buy enough of the
organization’s products unless they are persuaded to do so through selling effort. So organizations should
undertake selling and promotion of their products for marketing success. The consumers typically are
inert and they need to be goaded for buying by converting their inert need in to a buying motive through
persuasion and selling action.
This approach is applicable in the cases of unsought goods like life insurance, vacuum cleaner, and
firefighting equipment including fire extinguishers. These industries are seen having a strong network of
sales force. This concept is applicable for the firms having over capacity in which their goal is to sell what
they produce than what the customer really wants.
In a modern marketing situation, the buyer has a basket to choose from and the customer is fed with a
high decibel of advertising. So often, there is a misconception that marketing is all about selling. The
problem with this approach is that the customer will certainly buy the product after the persuasion and if
dissatisfied will not speak to others. In reality, this does not happen and companies pursuing this concept
often fail in the business.
4. Marketing concept - Focuses on needs/wants of target markets & delivering value better than
competitors do. The marketing concept believes in the pull strategy and says that you need to make your
brand so strong that customers themselves prefer your brand to every other competitor. This can be
achieved through marketing.
The marketing concept proposes that the success of the firm depends on the marketing efforts of the
company and in delivering a better value proposition as compared to its competitors in its own target
market.
The marketing concept also demands that the strategic decisions made by the company are taken
keeping the customer in mind. Especially the needs wants and demands of the customers. A holistic
approach is taken with the whole organization striving to make the customer experience better. Applying
the marketing concept also means knowing what the market needs and expects from the company
because of which companies, which apply the marketing concept, need to carry out more of market
research.
The marketing concept is the most followed ideology by top companies. This is because, with the rise of
economy, consumers have become more knowledgeable and choosy as a result of which the organization
cannot concentrate on what it sells but rather it has to concentrate on what the customer wants to buy.
As we are ultimately satisfying the customer, the marketing concept also demands that the organization
integrate all its different departments to give value to the customer. This means that all the departments
including Marketing, Finance, HR or Operations should have an idea of the core objectives of the
company as well as the goal of the company.
How to implement the marketing concept?
To implement the marketing concept, you need to ask 3 basic questions to yourself or your organization.
a. What is the target market – The first step is to determine exactly which the target market is. This can
be by market research and deciding which target market will give the best returns.
b. What are the needs wants and demands of the target market – A further step in marketing research is
the consumer preferences study. This study will help the firm determine the needs wants and demands
of the target market thereby helping the firm in deciding their strategies.
c. How best can we deliver a value proposition – In this step, the firm decided what strategy it needs to
adopt. What combination of ATL and BTL activities should be adopted? What kind of value should the
firm create and deliver. How should it integrate its different departments? Ultimately, the firm decides
how to apply the marketing concept within itself to deliver a better customer experience.
To summarize, the concept of marketing relies on market research and determining needs of the
customer such that a better marketing strategy can be devised which satisfies the needs of the customer.
The marketing concept also demands a holistic approach from the organization.
5. Societal marketing concept - Focuses on needs / wants of target markets & delivering value better than
competitors do that preserves the consumer and society’s well-being.
The societal marketing concept was an offshoot of the marketing concept wherein an organization
believes in giving back to the society by producing better products targeted towards society welfare.
Some have questioned ENTREPRENEURSHIP How to Identify a Target Market and Prepare a Customer
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whether the marketing concept is an appropriate philosophy in an age of environmental deterioration,

resource shortages, explosive population growth, world hunger and poverty, and neglected social
services. Are companies that successfully satisfy consumer wants necessarily acting in the best, long run
interests of consumers and society?
The societal marketing concept was an offshoot of the marketing concept wherein an organization
believes in giving back to the society by producing better products targeted towards society welfare.
Some have questioned whether the marketing concept is an appropriate philosophy in an age of
environmental deterioration, resource shortages, explosive population growth, world hunger and
poverty, and neglected social services. Are companies that successfully satisfy consumer wants
necessarily acting in the best, long run interests of consumers and society?
The marketing concept sidesteps the potential conflicts among consumer wants, consumer interests, and
long-run societal welfare. Yet some firms and industries are criticized for satisfying consumer wants at
society’s expense. Such situations call for a new term that enlarges the marketing concept. We propose
calling it the societal marketing concept, which holds that the organization’s task is to determine the
needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and
efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-
being.
The societal marketing concept calls upon marketers to build social and ethical considerations into their
marketing practices. They must balance and juggle the often-conflicting criteria of company profits,
consumer want satisfaction, and public interest. Yet a number of companies have achieved notable sales
and profit gains by adopting and practicing the societal marketing concept. Some companies practice a
form of the societal marketing concept called because related marketing. Pringle and Thompson define
this as “activity by which a company with an image, product, or service to market builds a relationship or
partnership with a cause,’ or a number of ‘causes,’ for mutual benefit.
They see it as affording an opportunity for companies to enhance their corporate reputation, raise brand
awareness, increase customer loyalty, build sales, and increase press coverage. They believe that
customers will increasingly look for demonstrations of good corporate citizenship. Smart companies will
respond by adding “higher order” image attributes than simply rational and emotional benefits. Critics,
however, complain that cause related marketing might make consumers feel they have fulfilled their
philanthropic duties by buying products instead of donating to causes directly. Thus societal marketing
concept as related to cause related
marketing differs mainly because here, the company makes a proactive effort to give back to the society.
ENTREPRENEURSHIP Validate Customer-Related Concepts 1
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Module 008 | Market Validation (Customer Development)
The entire concept of customer development is feedback driven. Looking at quite a few surveys that
startups use, it is obvious that the common mistakes seem to be being either biased or leading on.
Question: How would you design a survey? What are things to keep in mind? What are best practices
from market research practices?
Objectives:
1. Understand the things to keep in mind when designing a survey.
2. Recognize the best practices from market research practices.
Define an Effective Survey for Market Validation
How do you design an effective survey for Market Validation (Customer Development)? Here are some
key points:
Narrow Down, But Don't Necessarily Zero in - on a few facts.
If you ask people vague questions, you will also get vague answers in response. The answer to a question
as wide and vague as what people want, might completely take you off the track, and land you in the
middle of nowhere. Start by knowing what your insights are, where you want to narrow down - a general
overview of the kind of customers and target audience and their overall needs. This insight gets sharper
and sharper over iterations. However, start somewhere.
List down your assumptions.
Write a list of assumptions you have about your core audience, and the value proposition. Target the set
of questions you will need an answer to, that will affect your immediate next iteration.
Sharpen your core set of questions
Pick four or five different things you need clarity on before you start your survey. If you ask too many
deep questions, you might lose the audience.
Do not lead a question.
Frame a question and check how easy it is to say no to it. If it is hard, it probably is leading. That said, it
should not be too easy to say no either.
Frame Questions as a Skeptic
One tip that I was given while framing questions, was to put on a skeptical hat, list all the reasons why
this idea/product/feature might not take off, and then frame questions to disprove the fallacy. It gives
you a perspective on how easy it will be to sell this proposition to customers.
Don't Anchor
Anchor statements are rather powerful. If you start off with a brief that you are building a product, which
will make life easy for enterprise customers, expect all answers to follow to more or less align towards
that statement.
Allow for Free Flowing Answers
Collecting answers are one bit, but the next bit comes in processing the answers to qualify them and in
prioritizing, them based on authenticity. One of the best ways to do it would be to ask enough questions
to get the audience thinking and then have a few fields were they can write free flowing answers. It will
give you a perspective on how deep of a problem it is, and how eager the audience is, to solve the
problem.
The recommendation is evolving your engagement in three distinct phases. Diverge and Converge on
these as the product roadmap evolves and as major revisions happen.
Divergent thinking is a thought process or method used to generate creative ideas by exploring many
possible solutions. It is often used in conjunction with its cognitive colleague, convergent thinking, which
follows a particular set of logical steps to arrive at one solution, which in some cases is a ‘correct’
solution. By contrast, divergent thinking typically occurs in a spontaneous, free-flowing, 'non-linear'
manner, such that many ideas are generated in an emergent cognitive fashion. Many possible solutions
are explored in a short amount of time, and unexpected connections are drawn. After the process of
divergent thinking has been completed, ideas and information are organized and structured using
convergent thinking.
Convergent thinking is a term coined by Joy Paul Guilford as the opposite of divergent thinking. It
generally means the ability to give the "correct" answer to standard questions that do not require
significant creativity, for instance in most tasks in school and on standardized multiple-choice tests for
intelligence.
The Interview
Ideally face to face, where you are still trying to understand the target audience and how real the pain
point is. Ask plenty of follow up questions.
General Feedback
First Iteration of the Product launches, you see people signing up, using it, and you might want to send
out a note to them asking for Feedback. E.g. "Thanks for using the Product. Would love to hear your
feedback on your experience so far". A slightly more detailed follow up would be asking for three things
users love and three things users hate about the product.
Focused Feedback ENTREPRENEURSHIP Validate Customer-Related Concepts 3
Course Module
For specifics - let us say on identifying who the target audience is - its enterprise, but is it the CTO, the
Product Manager, or the Lead Programmer who finds it useful, what is the Price point that they'd be
willing to pay, understanding aspirations in terms of features etc.
Validating your Decisions Using Surveys
Learning about your own customers.
If you want to talk to your own customers, and understand product satisfaction, feature requests or
anything else, a survey can be a great tool. You most likely have email addresses for your customers, or
can provide a feedback link on your site, or even embed a survey in-product. However, your respondents
are likely your biggest advocates who want to help you, or your least satisfied customers, who may want
to complain. Surveying existing customers is no doubt a valuable exercise and can create preliminary
benchmarks, but the focus of this article is on surveying non-customers, or people you may not
immediately be able to access.
Learning about potential customers:
I always find it hard to generalize feedback programs without diving directly into a use case. I hope the
following will help give you some ideas and inspiration for the topics that are most important to you
when it comes to gathering feedback.
So what is a resource-efficient way to find data and insights around key business questions, in order to
gain the confidence to push forward on growth and awareness efforts, while still staying nimble enough
to pivot if needed?
Talk to potential customers.

Determine the key business questions where feedback from a large audience would help you make better
decisions. Using a survey or even series of recurring surveys to monitor trends can help find answers
quickly, and help give you the confidence to sprint forward and grow your customer base.
Using a Survey and a Targeted Audience to Make Smart Decisions
How do you get started? Work backward. First, think of what you are going to do with the data once you
have it. This will help you determine what exactly you need to ask, and how to ensure the data is usable.
Starting by just typing out questions can actually prolong the process. I also recommend keeping goals
narrow and focused. You can always run more survey projects, so do not overthink the first project and
try to address too many topics at once, which
leads to longer surveys and more survey creation and QA time. You are also going to learn a lot every
time you run a project, which will make each subsequent project more successful.
Create Clear Objectives
1. Understand if its core offering is priced appropriately.
2. Find out which types of customers are most likely to purchase its product.
3. Get custom market stats it can use to build a TAM (total addressable market), sanity check its market
understanding and build customized data for presentations, potentially for fundraising
4. Understand key info around its new offering to validate whether this is a business initiative it should
focus on.
Determine Your Target Audience
Everyone is a potential customer. Focus on Market size and target market.
Create a Great Survey
1. Turn key objectives into great questions.
2. Elicit actionable data to help inform the business decisions it’s considering.
Uncovering Critical Insights
1. Analyze data
2. Find key insights
3. Determine action plan
ENTREPRENEURSHIP How to Develop a Marketing Strategy and Marketing Mix for a Product 1 Course
Module Module 009 | How to Develop a Marketing Strategy and Marketing Mix for a Product A
marketing strategy is simply a clear statement on how a marketing professional intends to present a
product to the public, taking into account the target audience, product benefits and marketing methods.
A marketing mix combines the four Ps of marketing (product, price, place, promotion) into a single
statement of what the offering is. Combining the elements of the marketing strategy and the marketing
mix provides you with a clear focus for marketing a product and for satisfying the objectives a company
has for the product. The marketing mix is the set of controllable, tactical marketing tools that a company
uses to produce a desired response from its target market. It consists of everything that a company can
do to influence demand for its product. It is also a tool to help marketing planning and execution.
Objectives:
1. Recognize the importance of marketing mix in the development of marketing strategy.
2. Understand the 7P’s of Marketing. Marketing Mix and Marketing Strategy To succeed, a strong
business will need an excellent, well-coordinated marketing effort. To generate the sales that make
business owners sleep well at night, your business will need a good marketing strategy that takes into
account the components of the marketing mix. Though similar, with room for overlap, the marketing
strategy is different from the marketing mix. One is composed of the what, where and when while the
other decides how much emphasis to put into each component of marketing. Marketing Mix The
marketing mix is composed of four main components, known as the 4Ps: product, price, place and
promotion. The components of the marketing force you to consider how much you will charge for the
product or service you are selling; as well as when and where the product will be sold. For instance, a
cleaning service would be wise to sell its service during the spring when consumers are planning major
projects; similarly, promotions at around key holidays will also drive in more business. Marketing Strategy
The marketing strategy looks at the big picture of providing a profitable product or service to a customer
while taking into account that same customer is being courted by the competition. To survive against
strong competition, your company will need to pay attention to your competition's price and quality;
then make decisions on how to win customers. For instance, is your company equipped to sell a superior
product at a higher price point; or would your firm do better by offering a comparable product at a lower
price? Develop a Marketing Strategy & Marketing Mix for a Product
1. Define the Unique Selling Proposition (USP) for the company. Describe the stated benefit that a
product has for the customer. Outline, using the USP, the claim you are making about the product: why a
customer should purchase it and what value the customer will receive from it. Describe a USP for each
product to help narrow down your marketing focus for that product.
2. Describe the targeted audience for the product. Narrow the focus of the product by identifying who
will be buying. Shape the marketing campaign around that description. Picture the expected customer in
your mind and on paper (or in a word processing program). Reach out to that customer specifically.
3. Define the product in detail. Take the time to describe the specific value and qualities of the product.
Go beyond the obvious. Look for the unique features that the product has to offer. Display these in a
marketing campaign.
4. Create a pricing strategy for the product. Indicate how similar products are selling in the marketplace,
using the market research that you have collected. Gather this market research and study it to ensure
that you do not overprice or underprice the product. Reach the company stated sales and profit
objectives for that product, using the pricing strategy.
5. Identify the place where the product will be marketed. Recognize that place goes beyond geographic
location. Look more closely at the type of venue where the product will be featured. Note whether the
product will be marketed in grocery stores, department stores or small boutique shops. 6. Define the
promotional techniques that you will use for the product. Explain how you will use the standard
promotional techniques, such as advertising, sales and promotional events, person-to-person selling, and
public relations campaigns. Create a promotional strategy that features the product qualities as
effectively as possible. The 7P’s of Marketing Once you have developed your marketing strategy, there is
a "Seven P Formula" you should use to continually evaluate and reevaluate your business activities. These
seven are product, price, promotion, place, packaging, positioning and people. As products, markets,
customers and needs change rapidly, you must continually revisit these seven Ps to make sure you are on
ENTREPRENEURSHIP How to Develop a Marketing Strategy and Marketing Mix for a Product 3 Course
Module track and achieving the maximum results possible for you in today's marketplace. The 7P’s of
Marketing: Product, Price, Place, Promotion, Packaging, Positioning and People Product To begin with,
develop the habit of looking at your product as though you were an outside marketing consultant
brought in to help your company decide whether it is in the right business at this time. Ask critical
questions such as, "Is your current product or service, or mix of products and services, appropriate and
suitable for the market and the customers of today?" Whenever you are having difficulty selling as much
of your products or services as you would like, you need to develop the habit of assessing your business
honestly and asking, "Are these the right products or services for our customers today?" Is there any
product or service you are offering today that, knowing what you now know, you would not bring out
again today? Compared to your competitors, is your product or service superior in some significant way
to anything else available? If so, what is it? If not, could you develop an area of superiority? Should you
be offering this product or service at all in the current marketplace? Prices The second P in the formula is
price. Develop the habit of continually examining and reexamining the prices of the products and
services, you sell to make sure they are still appropriate to the realities of the current market. Sometimes
you need to lower your prices. At other times, it may be appropriate to raise your prices. Many
companies have found that the profitability of certain products or services does not justify the amount of
effort and resources that go into producing them. By raising their prices, they may lose a percentage of
their customers, but the remaining percentage generates a profit on every sale. Could this be appropriate
for you? Sometimes you need to change your terms and conditions of sale. Sometimes, by spreading your
price over a series of months or years, you can sell far more than you are today, and the interest you can
charge will more than make up for the delay in cash receipts. Sometimes you can combine products and
services together with special offers and special promotions. Sometimes you can include free additional
items that cost you very little to produce but make your prices appear far more attractive to your
customers. In business, as in nature, whenever you experience resistance or frustration in any part of
your sales or marketing plan, be open to revisiting that area. Be open to the possibility that your current
pricing structure is not ideal for the current market. Be open to the need to revise your prices, if
necessary, to remain competitive, to survive and thrive in a fast-changing marketplace. Promotion The
third habit in marketing and sales is to think in terms of promotion all the time. Promotion includes all
the ways you tell your customers about your products or services and how you then market and sell to
them. Small changes in the way you promote and sell your products can lead to dramatic changes in your
results. Even small changes in your advertising can lead immediately to higher sales. Experienced
copywriters can often increase the response rate from advertising by 500 percent by simply changing the
headline on an advertisement. Large and small companies in every industry continually experiment with
different ways of advertising, promoting, and selling their products and services. Moreover, here is the
rule: Whatever method of marketing and sales you are using today will, eventually, stop working.
Sometimes it will stop working for reasons you know, and sometimes it will be for reasons you do not
know. In either case, your methods of marketing and sales will eventually stop working, and you will have
to develop new sales, marketing and advertising approaches, offerings, and strategies. Place The fourth P
in the marketing mix is the place where your product or service is actually sold. Develop the habit of
reviewing and reflecting upon the exact location where the customer meets the salesperson. Sometimes
a change in place can lead to a rapid increase in sales. You can sell your product in many different places.
Some companies use direct selling, sending their salespeople out to personally meet and talk with the
prospect. Some sell by telemarketing. Some sell through catalogs or mail order. Some sell at trade shows
or in retail establishments. Some sell in joint ventures with other similar products or services. Some
companies use manufacturers' representatives or distributors. Many companies use a combination of
one or more of these methods. In each case, the entrepreneur must make the right choice about the very
best location or place for the customer to receive essential buying information on the product or service
needed to make a buying decision. What is yours? In what way should you change it? Where else could
you offer your products or services? Packaging The fifth element in the marketing mix is the packaging.
Develop the habit of standing back and looking at every visual element in the packaging of your product
or service through the eyes of a critical prospect. Remember, people form their first impression about
you within the first 30 seconds of seeing you or some element of your company. Small improvements in
the packaging or ENTREPRENEURSHIP How to Develop a Marketing Strategy and Marketing Mix for a
Product 5 Course Module external appearance of your product or service can often lead to completely
different reactions from your customers. With regard to the packaging of your company, your product or
service, you should think in terms of everything that the customer sees from the first moment of contact
with your company all the way through the purchasing process. Packaging refers to the way your product
or service appears from the outside. Packaging also refers to your people and how they dress and groom.
It refers to your offices, your waiting rooms, your brochures, your correspondence and every single visual
element about your company. Everything counts. Everything helps or hurts. Everything affects your
customer's confidence about dealing with you. When IBM started under the guidance of Thomas J.
Watson, Sr., he very early concluded that fully IBM salespeople, at least initially, would represent 99
percent of the visual contact a customer would have with his company. Because IBM was selling relatively
sophisticated high-tech equipment, Watson knew customers would have to have a high level of
confidence in the credibility of the salesperson. He therefore instituted a dress and grooming code that
became an inflexible set of rules and regulations within IBM. As a result, every salesperson was required
to look like a professional in every respect. Every element of their clothing-including dark suits, dark ties,
white shirts, conservative hairstyles, shined shoes, clean fingernails-and every other feature gave off the
message of professionalism and competence. One of the highest compliments a person could receive
was, "You look like someone from IBM." Positioning The next P is positioning. You should develop the
habit of thinking continually about how you are positioned in the hearts and minds of your customers.
How do people think and talk about you when you are not present? How do people think and talk about
your company? What positioning do you have in your market, in terms of the specific words people use
when they describe you and your offerings to others? In the famous book by Al Reis and Jack Trout,
Positioning, the authors point out that how you are seen and thought about by your customers is the
critical determinant of your success in a competitive marketplace. Attribution theory says that most
customers think of you in terms of a single attribute, either positive or negative. Sometimes it's "service."
Sometimes it's "excellence." Sometimes it's "quality engineering," as with Mercedes Benz. Sometimes it's
"the ultimate driving machine," as with BMW. In every case, how deeply entrenched that attribute is in
the minds of your customers and prospective customers determines how readily they will buy your
product or service and how much they will pay. Develop the habit of thinking about how you could
improve your positioning. Begin by determining the position you would like to have. If you could create
the ideal impression in the hearts and minds of your customers, what would it be? What would you have
to do in every customer interaction to get your customers to think and talk about in that specific way?
What changes do you need to make in the way interact with customers today in order to be seen as the
very best choice for your customers of tomorrow? People The final P of the marketing mix is people.
Develop the habit of thinking in terms of the people inside and outside of your business who are
responsible for every element of your sales, marketing strategies, and activities. It's amazing how many
entrepreneurs and businesspeople will work extremely hard to think through every element of the
marketing strategy and the marketing mix, and then pay little attention to the fact that every single
decision and policy has to be carried out by a specific person, in a specific way. Your ability to select,
recruit, hire and retain the proper people, with the skills and abilities to do the job you need to have
done, is more important than everything else put together. In his best-selling book, Good to Great, Jim
Collins discovered the most important factor applied by the best companies was that they first "got the
right people on the bus and the wrong people off the bus." Once these companies had hired the right
people, the second step was to "get the right people in the right seats on the bus." To be successful in
business, you must develop the habit of thinking in terms of exactly who is going to carry out each task
and responsibility. In many cases, it is not possible to move forward until you can attract and put the right
person into the right position. Many of the best business plans ever developed sit on shelves today
because the [people who created them] could not find the key people who could execute those plans.
Glossary Marketing Mix: The set of controllable, tactical marketing tools that a company uses to produce
a desired response from its target market. Marketing Strategy: Designed to meet the company’s
marketing objectives by providing its customers with value.

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ENTREPRENEURSHIP Introduction to Entrepreneurship 1

Module 001 | Introduction to Entrepreneurship

1. Understand key concepts, underlying principles and core competencies in Entrepreneurship

2. Create or provide a quality and marketable product and/or service in Entrepreneurship

3. Define the concept of Entrepreneurship

Schumpeter’s View of Entrepreneurship

Austrian economist Joseph Schumpeter’s definition of entrepreneurship placed an emphasis on

Entrepreneurship vs. Small Business

Definition According to J.B. Say

Entrepreneur Developing Economies

In the case of in a developing economy, the concept of an entrepreneur is understood differently. An

Entrepreneurship and Innovation

Entrepreneurial Contribution to Economic Development

Utilization of Local Resources

Creation of Employment Opportunities

Favorable Balance of Payment

Improved Marketing of Locally Produced Products

Promotion of Talent and Hobbies

Improved Growth in Gross Domestic Product

Entrepreneurs enable citizens to survive comfortably without too much borrowing.

Entrepreneurship and Self-Employment

Factors to Consider Before Going into Self-employment

Business Idea Skills (Technical/Managerial) Market Capital (Opening, Working or Long-term)

Machinery (Technology) Raw materials Location (Strategic) Legal Issues Competition

Reasons for Self-Employment

ENTREPRENEURSHIP Core Competencies in Entrepreneurship 1

1. Define Core Competency

2. Understand the importance of Core Competency

3. Identify the Core Competencies in Entrepreneurship

Importance of Core Competencies

Framework for Advantage (Strategic Architecture)

Change in customer interference

New technological possibilities

Current and future set up of the industry

Importance of Core Competencies

Losing Core Competencies

3M as a company is a perfect example of commitment to developing core competencies. It has a range

Arguments and Examples Against Core Competency?

Module 003 | Career Opportunities

1. Explore Job Opportunities for Entrepreneurship as a career.

2. Understand the benefits and downside of Entrepreneurship as a career.

3. Define the required qualities of an Entrepreneur.

Eight Jobs You Can Get With an Entrepreneurship Degree

ENTREPRENEURSHIP Career Opportunities 3

ENTREPRENEURSHIP Recognize a Potential Market 1

Module 004 | Recognize a Potential Market

1. Recognize the characteristics of a potential market.

2. Identify market problems.

3. Build products to meet customers’ needs.

Determine Market Potential

Identifying Market Problems

Your market consists of:

Existing customers: People who have already purchased your product

Traps to Avoid When Listening to Your Market

1. Focusing only on innovation and the competition.

ENTREPRENEURSHIP Recognize a Potential Market 3

● What problem does this solution solve?

● Is this a problem experienced by my target market?

● What would my target market do if I did not solve this problem?

2. Focusing only on customers.

3. Focusing only on revenue.

Stated Versus Silent Market Needs

ENTREPRENEURSHIP Recognize a Potential Market 4