GEOLAMA, PATRICK G THE IMPORTANCE OF THE BUSINESS

1. Value Proposition and Unique
Selling Proposition

2. Before focusing on the topics of value proposition and unique selling
proposition, you must first know the marketing process In a nutshell,
marketing is all about knowing Customers. Therefore, the marketing process
starts with identifying the Customers needs where you are tasked to create a
meaningful value proposition. Next, you study what the customers want or
desire for you to build a unique selling proposition. From there, it is imperative
to identify the most strategic market or group to tap.

3. A value proposition (VP) simply states why a customer should buy a certain
product or service. Customers are very specific when it comes to their needs and
their desired benefits, so the value proposition should cater to those particular
needs. Thus, the value proposition is the major river in customer purchase or
service availment. The startup entrepreneur will surely have a hard time thinking
of a value proposition for his or her business. The entrepreneur should bear in
mind that a value proposition has to be direct in addressing the problems of the
customers, should have quantifiable benefits, and should differentiate itself from
the competitors.

4. The following are some tips for the entrepreneur on how to create an effective value
proposition to the target customers:
1. Prepare a situation analysis that details the problem(s) of the customers.
2. Make your value proposition straight to the point, simple, and specific: in
short, there should be no complications. Your value proposition has to target your
major objective.
3. Highlight the value of your product or service so that customers will easily
get what benefits you can provide.
4. Adapt to the language of your market. Ensure that your target market
understands clearly what you are trying to say and avoid putting unnecessary and
inexplicable phrases.

5. 5. Add credibility-enhancing elements such as actual testimonials from
customers, partners, and other stakeholders, putting specific assurance elements and
Social acceptability metrics found in social media or press materials. Several quality
management certifications, such as the ISO seal, add more credibility to the product or
service that you're trying to sell.
6. Differentiate your value proposition with your competitors. Examples of value
proposition differentiators are the originality of the product or service, its functionalities,
or if the product or service can be tailor-fitted to the customer's preference, among
others.

6. capital, and market positioning strategies. The ability to craft an affective USP is a
gauge on how well an entrepreneur knows his or her product or service.
The following are some tips for the entrepreneur on how to create an effective
unique selling proposition to the target customers:
1. Identify and rank the uniqueness of the product or service attribute. The is
the most difficult part because you only need to choose one or two at the most. That
attribute will be your key to success, as this will compel customers to purchase from
you and not from your competitors. The unique selling proposition, While it presents the
best features of your product or service, should also avoid competition. Put yourself in
the customers’ shoes and ask yourself, ‘‘ Why should I choose you over the others? Or,
‘‘Why should I deal with you at all?’’

7. 2. Be very specific. Put details that emphasize the differentiator against the
competitors. This differentiator should be very compelling and should make the
customers think that they are really getting more value from you than others.
3. KISS (Keep it short and simple). One challenge that marketers always face is
that the customers’ attention span is limited and very easy to switch's
To illustrate , use the example from the previous discussion to build a potential
unique selling proposition for Aling Tire's Sari-sari Store.
The first step is the identification and ranking of the uniqueness of the product
or service attribute using the 7Ps of marketing. Make sure that there is a thorough
explanation and analysis about the ranking.

8. 7Ps Product or
Service
Place Price Promotion People Packaging Process
USP
Description
Retail
products
Near a call
center, a
public
hospital, and
a
construction
site
Competitive Signage Three shifts
of Alig Tere’s
Assistants
(6 am-2pm, 2
pm-10pm,
10pm-6pm)
Semi-
convenience
store
The only
Sari-sari store
that operates
24 hours a
day, 7days a
week
Unique? No No No No Yes Yes Yes
Ranking of 3 2 1

9. What Have I Learned So Far?
1. Look around your barangay or your subdivision and choose a business that you are very
interested with. Cite the reasons why you are very interested with this business.
2. 2 Ask the business owner or the business manager if he or she is familiar with the concepts
of value proposition and unique selling proposition. If yes, ask where he or she learned
these concepts. If no, ask the following: Does your business offer value to the customers?
What value is this? Does your business offer a standout product/service or a product feature
that other competitors do not offer?
3. 3. If the entrepreneur has already devised a value proposition and unique selling
proposition, do you agree with it? Why? If you don't agree with it, devise a new one. Explain
why these should be the appropriate value proposition or unique selling proposition
following the exercise done above.

10. Know Your Customers
After the general scan and research performed during the course of preparation for the
value proposition and the unique selling proposition, it is now time to dig deep and understand
the target customers through marketing research. Marketing research is a comprehensive
process of understanding the customers' intricacies and the industry they revolve in.
Marketing research is one of the most critical tasks of an entrepreneur. Therefore, no budding
entrepreneur should establish a business without undergoing the marketing research process
or else the business will surely fail. The result of marketing research is the entrepreneur's
major investment in a business, as it will lead him or her to the most effective strategies to
employ. Marketing research aims to scrutinize the target market, their specific requirements,
and the market size where the business operates.

11. Market Size
Market size is simply the size the arena where the entrepreneur's business will
play. It is the approximation of the number of buyers and sellers in a particular market.
The entrepreneur is required to determine the market size first to gauge the vastness or
tininess of the market where he or she intends to join. The only way to do this is to
conduct a strategic marketing research from reliable sources using dependable methods.
The first step is to estimate the potential market- the approximate number of
customers that will buy the product or avail the service. Usually, this is what you call the
market space or the market universe because this is the total market. For example, rice,
the staple food of Filipinos, virtually covers the whole country in terms of market size
because majority of Filipinos eat rice.

12. Market share computation illustration: Mr. Alvin Antonio, a
budding entrepreneur, wants to establish a rice retailing
business in his area in Barangay San Isidro. He wants to know
if this business is worth his capital and effort. He dug deep
and found out that there are approximately.

13. 500 families in Barangay San Isidro with an average of five members per family. He did
a survey and found out that only 475 families eat rice; they consume an average of 1
kilo of rice per day. There are four other rice retailers in the area that have been there
for 10 years already. and they have equal market shares of 20% each. The other 20% of
the market is buying in bulk (per sack) from groceries or convenience stores. The
average net profit per kilo of rice is PI0. How big is the market size and what could be
the potential market share of Alvin's rice retail business?

14. Market size of rice business in San Isidro Number of famnilies who eat rice x average
consumption per annum
Market size =475 families x 1 kilo per day x 365 days
=173 375 kilos of rice
Market size profit =173 375 kilos x PIO
=P1 733 750 per annum
The objective of Mr. Antonio in the first year is to capture the 20% of the market by
implementing marketing strategies in pricing (reduced markup of 2) and promotion (free
delivery of rice for five kilos and up) through text message or phone call. None of the
competitors have thought of or done these strategies yet.

15. In the example, the four rice retailers are considered direct competitors
because they offer exactly the same product and are structured similarly with
Mr. Antonio's proposed business. On the other hand, the groceries and
convenience stores are considered indirect competitors because they don't offer
exactly the same product type (i.e. rice sold in sacks instead of by kilo) and are
not similarly structured but still compete with Mr. Antonio's business indirectly.
Potential market share = market size x estimated market share
=PI 733 750 x 20%
=P346 750

16. However, because Mr. Antonio will reduce the markup by P2, the net profit per kilo will
only become P8.
Potential market share = 173 375 kilos x 20% P8
Potential market share =share P277 400
This market share for a startup business is an attractive venture. Mr. Antonio also has a
bigger chance of capturing the market share of competitors if he implements relevant and
enticing marketing strategies.

17. 1. People buy for a reason.
2. Innovation is the introduction of something new in your product or service.
3. Unique Selling Proposition is the factor or consideration presented by a seller
as the reason that one product or service is different from and better than that
of the competition.
4. Unique Selling Proposition would require careful analysis of other businesses'
ads and marketing messages.
5. As a product developer, you must put yourself in the shoes of your customer.
Test Yourself: A. True or False. Direction: Write
TRUE if the statement is correct; FALSE if it is not
correct

18. 6. It is not that important to understand what motivates the customers to buy. 7. You
must discover the actual and genuine reasons why customers buy your product
instead of a competitors. 8. The process of developing and generating business idea
is a simple process.
9. When you are improving the product or enhancing it, you are doing an innovation.
10. Business ideas may also be generated by examining what goods and services are
sold outside by the community.

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2.true
3.false
4.true
5.false
6.false
7.true
8.false
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10.false

20. THANK YOU SA
PAKIKINIG