ENTREPRENEURSHIP AND ITS ROOTS

The word entrepreneur takes its humble roots from the 13th century French word
“entreprendre” which meant to undertake. The word itself, the term entrepreneur stems from the
French literally, between taker, or go between with early references having been traced to the
eighteenth century economists Richard Cantillon, Anne- Robert Jacques Turgot, and Francois Quesnay.

Richard Cantillon

The person responsible for the first academic usage of the word entrepreneur was economist
Richard Cantillon in his Essai sur La Nature du Commerce en General. He stated that the bearing of risk
by engaging in business without an assurance of the profits that will be derived is the distinguishing
feature of an entrepreneur.

Daniel Defoe

This was later supported by Daniel Defoe by embodying the entrepreneur through the
protagonist of his novel Robinson Crusoe. Defoe was the first, in 1697, to consider the value of the
"creative entrepreneur" - though he used the term "projector" - as a means of advancing industry
through ingenuity and creativity.

Jean Baptiste Say

The 19th century saw three major additions to the growing concept of entrepreneurship. Jean
Baptiste Say portrays that the entrepreneur with his knowledge and judgment as someone who sought
opportunities to earn profits by reallocating resources from areas of low productivity to areas of high
productivity by describing an entrepreneur in terms of behavior.

John Stuart Mill

John Stuart Mill on the other hand describes the entrepreneur as someone who was more than
the venture capitalist but also one who managed the venture.

Alfred Marshall

Alfred Marshall who linked Say’s and Mill’s ideas claiming that the entrepreneur was one who
coordinated the four factors (land, labor, capital and entrepreneurship) together. It must be noted that
at this point in time, discussions on entrepreneurship were vastly based on the “who” of the concept. In
addition to being dubbed as a risk taker, a projector, and an adventurer, the entrepreneur has evolved
such that he was also identified as an arbitrageur (Say), a manager distinct from a capitalist (Mill) and as
a coordinator (Marshall).

At the dawn of the twentieth century, these “who” concepts of entrepreneurship were further
developed by the likes of Frank H. Knight and Joseph Schumpeter. Their discussions, however, were less
focused on who the entrepreneur was but what his actions were that makes him an entrepreneur.

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Frank H. Knight

Frank H. Knight carried forward the notion of risk taking by classifying two kinds of risks. Two
different kinds of risk were distinguished by Frank Knight : one is capable of being measured (i.e.,
objective probability that an event will happen) and shifted from the entrepreneur to another party by
insurance; the other is un-measurable (i.e., no objective measure of probability of gain or loss), e.g., the
inability to predict consumer demand.

Joseph Schumpeter

The discussions on entrepreneurship were also shifting towards the specific actions
entrepreneurs take that make them who they are. This is shown in Joseph Schumpeter’s discussion on
innovation and how it is a vital component of who an entrepreneur is. His two greatest insights were
that innovation is the driving force not only of capitalism but also of economic progress in general, and
that entrepreneurs are the agents of innovation. These new combinations or “creative destruction” as
they are sometimes called are what he referred to as innovation. He discussed that the entrepreneur did
not necessarily have to be the inventor, more importantly he had to be the one to act in an enterprising
manner upon the innovation.

Peter Drucker

Peter Drucker notes that entrepreneurship can be defined as changing the yield of resources
(seen in supply or production terms) or as changing the value and satisfaction obtained from resources
by the consumer (defined in demand terms) and innovation to be the specific instrument of
entrepreneurship.

He therefore prescribed a systematic form of entrepreneurship management, based on

systematic innovation: “Systematic innovation consists in the purposeful and organized search for
changes and in the systematic analysis of the opportunities such changes might offer for economic or
social innovations”.

One can say that, to define entrepreneurship would be to define both the entrepreneur and the
actions he takes. It is then best to use Commission of European Communities’ definition which is:
Entrepreneurship is the mindset and process to create and develop economic activity by blending risk-
taking, creativity and/or innovation with sound management, within a new or an existing
organization. As a mindset and a process, it is then something that can be learned.

Five Types of Innovation

1. Product – The introduction of a new product or quality

The combination of two existing products to create an entirely new product was an
example of an innovation as described by Schumpeter.
2. Process – The introduction of a new method of production
Another type of innovation that Schumpeter has identified is the introduction of a new
process of production.

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 3. Business Model – Opening of a new market

Schumpter’s third kind of innovation: the opening of new markets as it has recognized
that among commuters there exist a substantial number who were willing, needed and could
afford to avail of the services of a ride sharing company like theirs.

4. Source of Supply - the conquest of a new source of supply of new materials or parts

People these days are on the constant look out for sustainable and eco-friendly
products. One such product is vegan leather made from cactus. An innovative solution has been
discovered by two entrepreneurs who have developed a way to create authentic looking leather
from cactus. This is an example of a new source of supply of new materials or parts.

5. Mergers and Divestments - organization of any industry

The carrying out of the new organization of any industry, like the creation of a monopoly
position or the breaking up of a monopoly position is another kind of innovation according to
Schumpeter.

PERSONAL ENTREPRENEURIAL COMPETENCIES

Entrepreneurial Competencies refers to the key characteristics that entrepreneurs ideally

possess in order to perform entrepreneurial functions effectively. Competencies are defined as the
combination of knowledge, abilities, and attitudes needed to accomplish a role efficiently. In adopting
this definition, entrepreneurial competencies to the three components of the PECs which are the
planning cluster (knowledge), achievement cluster (abilities), and power cluster (attitudes). These
clusters are further subdivided in several characteristics.

THE PLANNING CLUSTER

The planning cluster of the personal entrepreneurial competencies covers three characteristics
and they are: goal setting, information seeking and systematic planning and monitoring. One of the
more popular myths about entrepreneurship is that, they grab opportunities without considering the
risks. Some say that they free-dive into new ventures as easily as they cross streets. However, the truth
to the matter is successful entrepreneurs rarely go into any business venture without a plan. In fact, it is
innate with them to set goals when meaning to achieve something, seeking relevant information that
would ensure success. In addition to this, they keep a tight reign over their entrepreneurial ventures,
overseeing things even to the most minute details. This especially happens early on an entrepreneurial
venture.

THE ACHIEVEMENT CLUSTER

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 Ask any successful entrepreneur why they did and rarely would you hear that they did it for
money. Some have done it for the heck of being the first, or for even shallower reasons. Either way, for
successful entrepreneurs, starting an entrepreneurial venture and willingly accepting all the risks
involved, is usually never about the money. More often than not, it’s just that they have a burgeoning
need to overcome a challenge or difficulty or even the stubbornness to accept that something that
others might have said cannot be done. This is manifested in the achievement cluster of the Personal
Entrepreneurial Competencies and is composed of opportunity seeking, persistence, commitment to
work, risk taking and demand for efficiency and quality.

THE POWER CLUSTER

Entrepreneurs have strong communication skills, and it’s this strength that enables them to
effectively sell their product or service to clients and customers. They’re also natural leaders with the
ability to motivate, inspire and influence those around them. Passion is perhaps the most important trait
of the successful entrepreneur. They genuinely love their job and are willing to put in those extra hours
to make their business grow; they get a genuine sense of pleasure from their work that goes way
beyond just cash. These traits are manifested under the power cluster of Personal Entrepreneurial
Competencies and is composed of persuasion and negotiation and self-confidence.

RISK AND REWARDS OF BEING AN ENTREPRENEUR

REWARD
1. Money/Profit
2. Time Freedom
3. Be your own boss
4. Express Creativity
5. Fulfillment

RISK
1. The Risk of Failure
2. Long hours of hard work
3. Unwanted responsibilities-

STRENGTH AND WEAKNESSES OF SMALL BUSINESS

STRENGTH
1. Decision-making is Fast
2. Can easily modify production

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 3. Gives employees sense of belonging

WEAKNESS
1. Cannot compete with bigger businesses
2. Lack of market planning and market studies
3. Due to limited capacity, small enterprises cannot avail economies of scale, they tend to
operate in a higher cost
4. Lack of capital
5. Poor and inadequate record-keeping

STARTING YOUR SMALL BUSINESS

WHERE DO YOU START?

In many entrepreneurship fora, the most frequently asked question by aspiring entrepreneurs
is: “What is the best business to go into?”

The standard answer they often receive is: “It depends,” which is then explained in detail in
terms of the many internal and external variables on which “it” depends. Often, this answer disappoints
the listeners. Does it disappoint you too? But an answer that may be considered acceptable now may
turn out unacceptable sometime after.

You should be better advised to look within and outside to identify what is the best business for
you to go into.

1. Looking Within
In a way, the best business for you actually depends on you – who you are, what you know,
what you have. Begin by looking for products, processes, or services about which you already know
something. It is now a fact that many ideas for small businesses were the direct result of experience in a
previous job. Carpenters would be confident going into construction, furniture making or sash-making.
Seamstresses would have a best chance going into garment making or stuffed toy manufacturing, or
setting up a modista or tailoring shop. Cooks would be good in starting a carinderia, a tapsilog stall, or a
small restaurant.

Technical training is also closely linked with entrepreneurship. You will do well to begin a
business based on some vocation or trade skills you have learned, such as auto repair, metalworking,
computer assembly, desktop publishing, or bookkeeping.

2. Looking Outside

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 a. Find a business opportunity in every market need. One of the first things you should
remember in trying to identify business opportunities is that all enterprising ventures
answer, in one way or another, a particular human need.
b. Study supply and demand gaps. Whether it is a product or a service, it must respond to
what the buyers need or want. Find out how the present demand for certain products or
services in the community is being met. Is demand for some items being filled by local
suppliers or producers? Find out whether or not local supply can cope with or totally satisfy
local demand. If not, this may suggest that there is room for still one more in the business.
c. Capitalize on available resources.
The availability of certain resources in an area can suggest business opportunities. These
resources may be in the form of raw materials, skills, information or technology. Consider
the following:
 Raw Materials. Identify the materials that are native to and abundant in an
area. Study how to make money out of these either through gathering the
materials, trading them, partially processing them, or manufacturing
finished products out of them.
 Local skills. Are specialized, traditional skills available in the community?
Can these be used for commercial purposes? The availability of skilled
weavers in a community, for example, can be tapped by organizing a
weaving, handloom, or handicraft industry.

Examples of traditional skills on which progressive enterprises have been

built are: shoemaking in Marikina City, slipper-making in Liliw, Laguna,
woodcraft in Paete, Laguna, jewelry making in Meycauayan, Bulacan, and
“antique” furniture making in Betis, Pampanga.

 Technology. Look out for advances or improvements in technology. These

might be useful in upgrading or improving traditional production systems or
starting a new business altogether. For example, research and development
in aquaculture has made prawn and bangus culture a viable business
venture. Similarly, R & D in waste utilization has given rise to new products
like wood particle boards, organic farming, and volcanic ash ceramics.
Canned laing, and vacuum-fried tahong are also new products developed by
DOST.

 Adapt, complement, reshape.

Get familiar with the current economic situation in communities
comparable to where you live. You can be inspired by a number of projects
which have worked in these areas and which you can adapt to your own
local situation. Don’t just copy and imitate. Innovate! Innovating is
improving on someone else’s idea to make it work for you. This might mean
reshaping or repackaging goods or services to fit or match present trends or
styles. Creative ideas may add or change a product’s features and thus add
more to its benefits.

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  Explore forward-backward industry linkages. No doubt, there are a number
of industries in your community. Find out what possible business ideas you
can pick up from what already exists. For example, a backward linkage of a
meat processing plant in your area may spur agribusiness projects like
poultry or hog raising, transport services, supplies required for meat
processing. Consider also going into distribution of poultry feeds, egg trays
and other inputs to the poultry raisers in the community. A forward linkage,
on the other hand, would explore opportunities in meat packaging,
subcontracting, or trading and distribution of finished products.

INTRODUCTION TO BUSINESS PLANNING

You are already definite about this business idea and want to make it real. You feel you have the
“it” to be an entrepreneur. You know what you are getting into; you have the skills, some experience,
and believe you can persuade people to buy your product or use your service.

What else is stopping you from starting that business? The ordinary person will rush headlong
into the water. The entrepreneur will first dip a toe, so to speak, to determine if the water is hot,
lukewarm, or cold before taking the plunge. As mentioned by Peter Drucker, the entrepreneur takes
calculated risks. He is expected to get more details about a business idea to determine if the business he
has in mind will stay afloat, grow, or collapse. He notes down these details in what is called a business
plan.

WHY PLAN A BUSINESS?

BUSINESS PLAN
A business plan is a document that aims to establish whether or not a business idea will bring in
money that is greater than what it cost to start and operate it. Your business idea may look attractive to
you at first. But beware! Not all business ideas are “doable.” Some look brilliant while others are just too
absurd. Therefore, no matter how good your business idea will seem, you still need to make a business
plan for the following reasons:

A. Reduce, if not remove, the risk of losing money invested in a poorly researched or
unstudied business idea. Preparing a business plan will enable you to measure the
prospects of a business idea before parting with your money.
B. Avoid costly mistakes. Every spur-of-the-moment or careless decision you make for
the business entails cost that you might not be able to recover. It is never advisable
to engage in a trial and error or on a hit-or-miss activity. You can actually save on
costly mistakes by looking carefully at the details of the business.
C. Anticipate your financial requirements. Money is the blood of any business.
Without it no business can start or even survive. It is always wise to foresee sudden
increases or decreases in the demand for your product or service so you can

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 prepare for them. Through the business plan you can plan for the lean months and
ensure that the business will have enough resources to meet business obligations
during the periods when sales are low. In the same manner, the business plan will
help you get ready for the peak production months so that you avoid losing any
business opportunity.
D. Organize your activities beforehand. A business plan will serve as your road map to
an unfamiliar territory and as such, minimize or avoid unpleasant surprises. The
business plan will allow you to estimate how your business will perform in the
future and to prepare for contingencies in case things will not turn out as planned.
E. Apply for financing from lending institutions. You should be able to convince
possible sources of capital, especially banks, that something good will come out of
your business idea. A well-prepared business plan can be your back-up support.

COMPONENTS OF A BUSINESS PLAN

A. Introduction or executive summary. Just like the preface or foreword of a book, the
introduction or executive summary gives a general idea about the contents of the business plan.
It also states the name of the person who is planning to set up the business, form of ownership,
the business address, type of project, objective(s) of the business, and total project cost.
B. Marketing Plan. This generally refers to the product or service that the business will offer. It
gives details of the product or service, how it will benefit the buyer, how it will look like; who are
expected to buy the product or use the service, where they can buy, and how much it will cost.
This component also includes data on how much sales the business can expect - in a year, in two
years, or longer - in units and in peso values. This portion also looks at the general situation
outside the proposed business.
C. Production or Technical Plan. This component deals with how the product is made or the
service completed; when it is made or completed; type and number of materials and equipment
and number of people needed to make the product or complete the service; type and amount of
electricity, power and water to use; arrangement and location of machines, work stations,
storage and other areas; physical space and facilities; quality control system; waste disposal
system; and many more.
D. Organizational Plan. This refers to the details of putting the business together. It involves
getting the people, setting up systems and procedures, acquiring the machines and equipment,
and registering the enterprise. It includes coming up with a timetable of activities to do until the
enterprise formally opens for business.
E. Financial Plan. Just as money is very important to any business, this section is critical to any
business plan. This component will let you know how much you will need to put up the business,
where you will get the money to finance it, and keep it going. Vital to this component is an
estimate of how much you will need to operate the business for at least a year up to, probably
five years, especially if you will borrow from a bank, how you are going to use the loan, how
much profit the business will earn, how you are going to repay the bank loan, and some other
information.
F. Socio-economic Plan. Entrepreneurs are not just after with profit. In every enterprise, there
must be always the benefit to the community. It includes, taxes, social services and
development, employment and others.

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MARKETING PLAN

To make sure your business idea is concrete and feasible, answer following questions:

1. What good or service will your business sell?

2. Who will buy your good or service?

3. How are you going to sell your good or service?

4. Which needs will your good or service fulfil for which customers?

5. What is the positive or negative impact your business will have on your community and the natural
environment?

MARKETING PLAN

After getting an overview of the business plan, it is time to come up with your own business plan
for the product or service that you have selected. The discussions from this chapter onwards will serve
as your prompt for preparing your business plan.

The first part of the business plan deals with finding out the possible buyers of your product or
users of your service. The techniques for identifying who they are and more can be found in the
marketing function of a business.

Marketing refers to the commercial processes involved in promoting and selling, and
distributing a product or service. It refers to the commercial functions involved in transferring goods
from producer to consumer.

Market

1. A subdivision of a population considered as buyers;

2. The business of buying and selling a specified commodity;
3. A geographic region considered as a place for sales.

Related words that were given for the term, “Market,” includes:

1. The world of commercial activity where goods and services are bought and sold;
2. The customers for a particular product or service.

The four important things in marketing that an entrepreneur must remember are:
a. The client, the buyer, the target user, generally called the target market;
b. The entrepreneur’s ability as a marketer to understand the target market;
c. The entrepreneur’s ability to influence the target market to buy the products or use the services
offered by the business; this will depend on how well he understood he target market; and

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 d. The main objective of marketing, which is making the target market buy the company’s product
or service; this will be measured by the revenues that come in the form of payment from the
buyers of the product or users of the service.

UNDERSTANDING YOUR MARKET

There are five skills you need to acquire that will help you understand the market: how to group
(or segment) the market, how to identify which segment to focus on (target), and how to be more
familiar with your target. It will also help to you to know who else are making similar products or
offering similar services (competition) and how to estimate the size of the target market that will buy
your product or use your service.

SEGMENTING THE MARKET

Market segmentation refers to the process of dividing prospective buyers into groups that have
common needs and will respond similarly to a marketing action. It is a process in marketing of grouping
a market (customers) into smaller subgroups. It is drawn from the recognition that the total market is
often made up of submarkets (segments).

A market can be grouped according to these variables:

a. geographic (region of the world or country, size of country, climate),
b. demographic (population - age, gender, sexual orientation, income, occupation, education, etc.)
c. psychographic (personality, lifestyle, values, attitudes), or
d. behavioral (product, benefit sought, rate of usage, brand loyalty, readiness-to-buy stage, etc.).

The kind of grouping to use will depend on the nature of product you are going to make and the set up
of your business (whether manufacturing/processing, trading, or service).

MARKETING STRATEGIES

A marketing strategy is a plan of action required to realize the main objective of marketing,
which is to influence the target market to buy the product or service being offered by a business. Much
of the ability to influence the target market is developed by knowing what these marketing strategies
are, by learning from the other companies, and by actual practice.

Marketing strategies revolve around the 4Ps of marketing, so-called because they all start with
the letter P. Collectively referred to as the marketing mix, the 4Ps are the factors that help a business to
sell its product or service. The four elements – the four Ps of marketing – are normally set apart as:
getting the right product to the market, at the right price, ensuring that promotion in terms of
advertising and marketing for the product or service is right, and ensuring that the product or service is
distributed to the most convenient place for the customers to buy it

PRODUCT STRATEGIES

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 Product strategies involve using the properties of the product to influence the target market
into buying a product or using a service. Some of the properties of a product or service include brand,
packaging, label, support, and attributes.

Branding

A “brand” is a name, term, sign, symbol or design, or a combination of these, that aims
to identify the goods or services of one seller and to differentiate them from the other sellers.

The simplest example of a brand is the full name of a person. A person’s full name
distinguishes him from another person. And just like your full name, your brand will allow your
target market to easily identify and distinguish your product or service from similar products or
services available in the market. If your product or service can be easily identified through its
brand, this will trigger an easy recall for your target market.

It usually takes a long time before an entirely new business is able to establish its brand
unlike in the case of a franchise. This is one of the reasons why many new businesses use a
brand that spoofs an existing brand. Take for instance, Mang Donald, a brand of chicken taken
from the brand, McDonald’s. It is always good to come up with a brand that is short, can easily
catch one’s attention, and speaks of the product or service.
Another example is Reyes Haircutters. It easily conveys that the establishment is in the
salon business. Mr. Quickie lives up to the image of what the business is trying to project, and
this is in fixing shoes and bags in a jiffy.

Packaging

After coming up with a brand, the next step is to think about the package of the
product. Packaging refers to the outside appearance of a product, or the way it is presented. In
deciding how you are going to present your product, you can follow this simple concept – “what
the package should be or should do for the product.” In other words, the package should
convey what it is and what it does for the product.

Labeling

After the brand and packaging comes the label. A label is used to identify, grade,
describe, and promote a product. In the perfume example, the name POISON etched on the
backside of the jar is a label. For customers to know that POISON is a perfume and not a toxic
substance, the entrepreneur can put the word, “perfume” below the label, or a description of
the perfume, or a description on how to use it, or put a “non-toxic” grade symbol on the jar.

Product Support

Product-support is the collective term for services that add to the marketability of the
actual product. Some examples would be: credit and financing services, fast and reliable
delivery, and a quick installation. For very expensive and highly technical products, product-
support is very important. Many times, customers put a premium on product-support when
considering a purchase. An example is the service warranty that often comes with the purchase
of computers and appliances. One reason that is attributed to the success of the furniture

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 business of the store, ABENSON, is the free and prompt delivery service that comes with every
purchase.

PRICE STRATEGIES

One of the most obvious ways of influencing the target market to buy a product or
service is by setting a low price. However, not all goods and services can be priced low. An
entrepreneur must see to it that the price is “right” in order to make a profit, sustain the
business, and let it grow, and continue serving the needs of the target market. Before going into
price strategies, we need to discuss the concept of value, specifically monetary value. A simple
way of understanding value is to ask different people how much a particular product should be
priced. Surprisingly, each would give a different price.

Value is a perception of worth. That value can be quantified. The question to ask is,
“How much is this product or service worth to you?” People value one thing differently, or put a
price tag for the same items differently depending on their background, character, experience,
and many other factors. It all goes back to how well you understand your target market. Having
a good understanding of your target market will help you identify and recognize the factors that
influence how people “price” a product or service.

FACTORS AFFECTING PRICE

There are other basic factors that affect pricing decisions or pricing strategies aside from
understanding your target market. These factors include: the cost of the product, external factor
- competitors’ prices, and target market factors – the supply and demand situation, the ability of
your target customers to pay, and the image of your company (high prices are associated with
good quality and low prices with low quality), among other factors.

Cost Factor: Cost-plus Strategy

When you price your product or service, always consider the following costs – the cost
of making the product, the cost of selling your product, and the costs you incur to operate
your business. The easiest and the most commonly used pricing strategy is the costplus.

To illustrate:

Total cost incurred to make the balloons = P1,500

No. of balloons made = 100
Computation of Unit Cost P1,500 / 100 = P15 per balloon
Markup (20% Assumption) +3
SELLING PRICE per balloon P18

External Factor: Competition-based Pricing

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 This strategy means that the main factor for determining the price of your product or
service is your competitor’s price. You can set a price that is either higher than your
competitors, the same as your competitors, or lower than your competitors.

PROMOTIONAL STRATEGIES

The entrepreneur’s effort for making the target market buy a product or service is
measured in terms of sales revenues generated by the enterprise. The end goal of the
promotions strategy is the same. In order to meet that goal, the promotions strategy of an
enterprise calls for the effective communication of a message to the target market.

Promotions is the collective term for all the tools or media that a business uses to
communicate a message to the target market. The tools and media are many as they are also
very diverse. Some examples would be the familiar television commercials and the unfamiliar
Internet or viral ads in the worldwide web.

The Message. People do not just buy products. They buy the benefit that they get from
the product. In essence, people are drawn to products because of the benefits that the products
or services provide them.
Your promotions message should, thus, always convey what benefits your target market
can expect to get from your product or service. Your promotions should be able to get across
the message that your product or service will address a specific need or want that you found out
when you studied your market.
Promotional Tools

Promotional Tools Examples Uses Objectives Tools Notes

Advertising TV, radio, • For items bought •To build

newspapers, repeatedly through awareness
magazines, selfservice facilities •To persuade
classifieds, yellow •Best used for a • To reinforce
pages, billboards large group • To remind
•Low cost per
exposure and non-
personal
Sales Promotions Sampling, coupons, To encourage short
refund offers, term sales boosts
continuity by providing
programs, bonus temporary price
packs, trade reductions or value
allowances, added incentives to
premiums, spur demand
in/on/near packs,
contests,
sweepstakes,
points-ofpurchase,
co-ops, tradeshows
Public Relations News stories and  To inform • Least measurable

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 press releases • To build an image impact and most
difficult to track
•Difficult to control
message because
of editing
• Lowest cost per
exposure
Personal Selling Sales force or Used in cases when • Products must be
distributors persuasion and demonstrated.
immediate • Most expensive
feedback are form of
necessary promotions per
contact but
generally the most
effective
Direct Marketing Direct mail (mailing • Well-developed
lists), interactive database for
TV, telemarketing, monitoring
catalogs, prospects’ buying
postcards, inserts behavior
• Customized
messages
• Easy to measure
response and
develop effective
executions
Events Marketing Considerations: • Popular on a local
•Theme market basis
development • High cost per
• Prominent exposure
exposure of • Augmented by
product in a bringing in
positive light sponsors or
• Execution detail obtaining services
Mini media Business cards,
brochures,
banners,
newsletters,
posters, takeone-
boxes, circulars,
gift certificates,
order forms,
stationery
Other Promotions Frequent buyer
programs, music,
jingles, slogans,
packaging, special
gifts
Internet Company web

AB ECONOMICS II- ENTREPRENEURIAL MIND DIVINAFLOR, EDWARD N.

 page, web page
ads, viral
advertising,
referrals,
spamming,
Egroups, blog sites,
bidding sites, chat,
forums, social
media

PLACE STRATEGIES

Place strategies are concerned with the ways of bringing one’s product or service to the target
market. One of the major decisions an entrepreneur must make is where to sell the product or offer the
service, more particularly, how the product or service will get into the hands of or be availed by the
target market.
There are numerous venues (physical and virtual) where you can sell your product or service.
There are also many options available on how your product or service will reach your target market.
Venues and options are also known as distribution channels. Below are some examples of distribution
channels that you can consider:

Traditional distribution channels.

Traditional channels are avenues that allow for a personal interaction for the buyer and seller.
Having this kind of a direct human interaction enhances buyer-seller relationship. These channels are
best for target markets that value speed of delivery and guaranteed supply or convenience. The more
common examples of traditional distribution channels are:

• Distributors
• Sari-sari stores
• Malls
• Shops
• Kiosks

Capitalize on your understanding of your target market by combining different channels, or

concentrating on one channel, or creating a new and different channel that might be more appropriate
to your target market. The restaurant example has shown that when coming up with place strategies for
a restaurant or any eatery, always look at the location of your business or the offering of food and
services from the point of view of your target market.

AB ECONOMICS II- ENTREPRENEURIAL MIND DIVINAFLOR, EDWARD N.