components of a business concept/ business model , identifying and learning about the customer , conducting research , reaching the market , five areas to research , primary research , business concepts

1. 3-1
Defining a Business Concept

2. Overview of the Chapter:
Every idea is not the business concept. Ideas are alike
dreams. So every dream is not concept.
Simply A business concept communicates to others the
precise nature of the proposed venture.
More formally a business concept is a set of cohesive
ideas about how to create and deliver value to market.
The concept should be Simple, Precise and Cohesive.
 Entrepreneurs do not need a lot of ideas. They need
just one idea that can be developed into a business
concept and become a reality.
3-2

3. Components of a Business Concept/
Business Model
 Products/ Services
 Market/ Customers
 Positioning/ Market Reaching
 Distribution (How products or services will be
delivered)
3-3

4. Defining Products and Services
 Solve a Problem or Fulfill a Need (Physical
Features/Benefits features)
 Identify the Uniqueness of a Product/Service
 Prove That the Product/Service Works (Large Screen
TV)
3-4

5. Identifying and Learning About the Customer
 Customers
 Recognize Customer Roles
 User
 Decision maker
 Buyer
 Influencer
 Gate keeper
 Create a Customer Profile
 Details of user group, demography, psychograph
 Helps to locate and communicate customers
 Based on usages of the product
 when the customer is a business demography- income, number of
employees etc.
3-5

6. Reaching the Market
1. Strategic Positioning:
-Provide a unique product/ services
-Unique combination
-Unique way for same product
2. Strategy Traps to Avoid:
-Misreading Industry trend
-Thinking everyone is Potential customer
-Percentage of target market
-Having no real competitive advantage
-Relying on gut feelings rather than facts
-Having unrealistic expectations
3-6

7. 3.Product Distribution Models
4.Service Distribution Models
5. Combined Product and Service Businesses
 Motorbike, smartphone distribution, home appliance etc.
3-7

8. Conducting Research
 Purpose of Research
 Concept development
 To complete business plan
 Market potential evaluation
 Types of Research
- Primary Research
- Secondary Research
Or
- Basic research
- Applied research
3-8

9. Five areas to research
The entrepreneurs will conduct research for the business
plan in five areas:
 Industry
 Market
 Competition
 Financial
 Legal
3-9

10. Primary research
 Customer surveys
 Ask the customer about product/ service
 Preview of product to the potential customer
 Focus group discussion
 Additional customer insight
 More information cheaply
 Valuable insight obtained
 Skilled mentor is needed
3-10

11. Business Concepts
 Attributes of Successful Business Concepts
 Involves significant savings
 Solves a serious problem
 Offers convenience
 Attract media attention
 Clearly identify the market
 Captures monopoly
 Promises a big upside and a low downside
 Fatal Flaws of Business Concepts:
-No real need
- Hidden Traps
- Unfortunate economics
- No protection
- Obsolescence
- Requires changes in consumer behavior
3-11