Scanning the Market Environment

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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