[Senior High School] ENTREPRENEURSHIP, Lecture notes of English

Download [Senior High School] ENTREPRENEURSHIP and more Lecture notes English in PDF only on Docsity! NATURE AND RELEVANCE OF ENTREPRENEURSHIP “The entrepreneurship always searches for change, responds to it, and exploits it as an opportunity.” - Peter Ducker Entrepreneurship is a science of converting processed ideas into a remarkable business venture (Marife Agustin- Acierto, 2019). It is also a capacity for innovation, investment and expansion in new market, products/services and techniques (Fajardo, 2009). Thus, this definition implies that an enterprise is at work whenever an individual takes the risks and invests resources to make something new or unique, innovates or creates new markets. An entrepreneur is an individual who is alert to profitable opportunities for the exchange of goods and services. He is also who organizes, manages, directs and assumes the risks of a business or enterprise. Being an entrepreneur is a lifestyle or an attitude (Acierto, 2019). Entrepreneurship is a catchword in the era of a globalized economy. It is a foundation and catalyst for economic growth and innovation across nations. Entrepreneurial activities thrive in societies with supportive government policies and which give much importance to innovativeness and risk-taking to turn new ideas into breakthrough solutions. Smalls and mediums enterprises (SMEs) are the concrete manifestation of entrepreneurship. According to a United Nations report, in developing countries, they account for only over 50% of these same measures. It is interesting to note that over the years, the meaning of entrepreneurship has had a lot of variations. These are some of the definitions that have been given to entrepreneurship from early on to the present time: CONTRIBUTOR DEFINITION Knight (1934) Having profited from bearing uncertainty and risk. Schumpeter (1952) Carrying out of new combinations of firm organization-new products, new services, new sources of raw material, new methods of production, new markets, and new forms of organization. Hoselitz (1952) Uncertainty bearing…coordination of productive resources… introduction of innovations and provision of capital. Cole (1959) Purposeful activity to initiate and develop a profit-oriented business. McClelland (1961) Taking a moderate risk Shapero (1975) A kind of behavior that includes: (1) initiative taking (2) the organizing of reorganizing of social-economic mechanism to turn resources and situations to practical account, and (3) the acceptance of risk failure. Casson (1982) Decisions and judgments about the coordination of scarce resources. Ronstadt (1984) The dynamic process of creating incremental wealth. This wealth is created by individuals who assume the major risk in terms of equity, time, and/or career commitment of providing value for some product or service. The product or service may or may not be new or unique, but the value must somehow be infused by the entrepreneur by securing and allocating the necessary skills and resources. Drucker (1985) Behavior rather than a personality trait. Its foundation lies in concept and theory rather than in intuition. Gartner (1985) Creation of new organization. Hisrich & Brush (1985) Process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychic, and social risks and uncertainties, and receiving the resulting rewards of monetary and personal satisfaction. Stevenson, and Grousebeck (1989) The pursuit of opportunity without regard to resources currently controlled. Hart, Stevenson, and Dial (1995) The pursuit of opportunity without regard to resources current-controlled. But constrained by the founders’ previous choices and industry-related experience. Shane (2003) An activity that involves the discovery, evaluation, and exploitation of opportunities to introduce new goods and services, ways of organizing, markets, process, and raw materials through the organizing efforts that previously had not existed. Kuratko (2009 The dynamic process of vision, change, and creation that requires an application of energy and passion toward the creation and implementation of new ideas and creative solutions. Dyck and Neubert (2012) Conceiving an opportunity to offer new or improved goods and services, showing the initiative to pursue that opportunity, making plans, mobilizing the resources necessary to convert the opportunity into reality. Different authors give their definitions’ views and insights about entrepreneurship from slightly distinct perspective, however they all have the following common elements: ✓ Innovation ✓ Opportunity seeking and exploitation ✓ Resource mobilizing ✓ Encountering risks and uncertainties ✓ Economic and personal rewards. There are a lot of factors that influence the friendliness of a country to entrepreneurs; among these are the employment regulations, bankruptcy laws, and tax policies of a country. It is always inevitable that there are people who will take up the challenge to become an entrepreneur in spite of the competitive business environment. Culled from various sources, here are examples of entrepreneurship in these 10 countries: • United States – noted to be one of the friendliest countries for entrepreneurs in the world, the United States is home to thousands of successful entrepreneurs as shown by companies like Apple, Google, Starbucks, Walmart, and Walt Disney. • China – this emerging country is home to budding entrepreneurs who manufacture different products that range from toys, gadgets, electronics, and cars. Most of the new businesses in this country are home-grown because of a new breed of entrepreneurs who realize the potential in their country. However, a lot of products in China are generic brand names though. • Singapore – this is literally a small country that controls a significant portion of the economy in Asia. Many of their entrepreneurs innovate on existing services for local and international use. • Canada – Entrepreneurs in Canada are exploring opportunities over their internet. For example, people from a region called Sanikiluag are known for their wood carving skills and entrepreneurs are selling their products online. • India – entrepreneurship plays a dominant role in the country’s economic landscape, with the government providing a venue, called Delhi huts, to start-up entrepreneurs that promote local handicrafts. The cottage industry compound is another venue put up by the Indian government for the development of local products manufactured and retailed by start-up entrepreneurs. In fact, India is one of the countries in the Asia-Pacific rim with a strong base of entrepreneur organizations led by the youth and women. • Taiwan – entrepreneurship is encouraged here through the small and medium enterprise incubation centers for the purpose of nurturing young firms, new products, and technologies. These incubators provide space, facilities, hands-on management assistance, and access to technologies and financing to clients, helping them to survive and grow during the start-up period. There are hundreds of incubators that have been sponsored by the Taiwan SME development fund. • Hong Kong - with a knowledge-based economy, Hong Kong utilizes its human resources to make its economy the best possible through entrepreneurship. There are many entrepreneurial endeavors that flourish from the real estate enterprise to retail and food business. Entrepreneurial activities related to tourism and agricultural exports have likewise continually received strong support both from the government and private sectors. Honk Kong is known as a “shopping haven.” able to exploit high growth potentials.’’ Today, many people regard entrepreneurship as ‘pioneership’ on the frontiers of the business” (Kuratko & Hodgetts, 2004). Much of the significant changes revolutionizing the world of business was due to the Internet which provided countless opportunities for entrepreneurs. ENTREPRENEURHIP THEORIES CONTRIBUTORS/SCHOLARS CLASSIC CONTRIBUTORS MODERN CONTRIBUTORS Cantillon (1734) Drucker (2005) Say (1832) Hisrich Marshall (1936) Timmons Schumpeter(1950) Shane Knight (1972) Kirzner Evolution of Entrepreneurship in the Philippines Entrepreneurship has existed in the Philippines since the interaction of the early Filipinos with foreign traders, especially the neighboring countries like Malaysia, Indonesia, and China. They started business transactions through the barter system wherein goods and services were the means of exchanges. Then countries moved towards a money economy when people used different forms of money to pay for the goods that they bought. However, when Spain, Japan and America colonized the Philippines for hundreds of years, they changed the structure of the society, the economy, education, and the political system we became a predominantly family-centered, Catholic, capitalistic, and democratic country. After independence, the Philippine government realized the importance of entrepreneurship to individuals, society, and country, and how it contributes to the nation’s economic development. The small and medium enterprises (SMEs) became the embodiment of entrepreneurship in the country. The SME development regulatory framework and policies started in 1935 when the 1935 Philippine Constitution first recorded the national commitment to economic success through industrial and technological growth. The historical data show that the intensification of entrepreneurship development started in the 1970s. For the first time, the SME sector was given emphasis in the Philippine Development Plan (1972-1976). Then, the 1987 Philippine Constitution reinforced the commitment for the development of the private sector and provided for a wide range of government reforms and reorganization. The Magna Carta for Small Enterprises is the landmark legislation that reflects the current government policy to foster a dynamic SME sector, particularly rural and agricultural-based manufacturing ventures. On the other hand, R.A. 7882, the Act Providing Assistance to Women, recognizes the special role of women in development and supports women entrepreneurs who are engaged in the manufacturing, processing, service, and trading businesses. Under this program, government financing institution (GFIs), Like the Landbank of the Philippines (LBP) and the Development Bank of the Philippines (DBP), are mandated to provide assistance to; (1) non-governmental organizations (NGOs) engaged in developing women’s enterprises up to P 2 million, provided the non-government organization has a minimum operating track record of one year; (20 existing women enterprises to the upper limit of P 50,00; and (3) potential women entrepreneurs with sufficient training up to a limit of P25,000 each. There is no doubt that the government, through the Department of Trade and Industry and its attached agencies and bureaus, recognizes that the promotion of entrepreneurship demands a holistic, integrated, and strategic set of interventions in order to hasten the economic development of the Philippines in the midst of this globally competitive government. To implement these plans, significant enabling laws, policies, and programs were instituted by the government with the support of international development organizations, non-government organizations, and the private sector. THE RELEVANCE OF ENTREPRENEURSHIP AND ENTREPRENEURS IN ECONOMIC DEVELOPMENT AND SOCIETY Entrepreneurship has an enormous impact on the economy and society. Globally, the level of entrepreneurial activity has contributed significantly to the national level of economic growth of many countries. It was Joseph Schumpeter, an Austrian economist, who first articulated the importance of entrepreneurship to the economy and in society in 1934. The increase in entrepreneurial activities has also initiated changes in the structure of business and society. Specifically, entrepreneurship has these contributions to the economy and society: 1. Creates employment. When entrepreneurs put up their businesses, they employ people who possess different competencies and personal values to help them operate the enterprise. 2. Develops new markets. Entrepreneurs are opportunity-seekers, creative, and resourceful. They seek new buyers or customers of their products or sold services. They go beyond the existing places where their products and look for other people who will be interested. 3. Introduces innovation. Entrepreneurs innovate. Innovations can be something ordinary or technological or breakthrough. This innovation is done for the product, service, or technology towards commercialization and generates economic wealth. Due to innovation, other businesses fold, while others will open or flourish. Some even restructure like merging or buying-out firms, to respond to the changes that are required in order to become sustainable in the business. 4. Generates new sources of materials. Entrepreneurs are always in constant search for better and cheaper sources of materials they need. Finding new material providers help in the economic growth of the place. These could be sourced from because of the value creation. 5. Stimulates investment interest in the new business ventures being created. When entrepreneurs engage in a new business, it stirs curiosity for other people to invest in the business because of the benefits it offers. This new investment contributes to economic growth. 6. Improves the quality of life. The new products and services developed by the entrepreneur contribute to the increase in the personal benefit and convenience of people in society. The use of automatic gadgets in cooking or washing clothes, mobile phones, internet services, agricultural machines, and many other innovations leads to a better quality of life. 7. Serves as role models. Entrepreneurs are people to be emulated by younger generations in the community and society at large. The attitude, behavior, and personality traits, like proactiveness, opportunity recognition, risk- taking, alertness, and creativity, are some of the characteristics that will also make them successful entrepreneurs in the future. 8. Brings social benefits to the people. Entrepreneurs pay taxes for every product or service sold in the market. They also pay for the permits and licenses to operate their businesses. The income derived from all these taxes by the government are then used for the people, especially the poor to have more access to social services such as education and health, as well as improvement in infrastructure facilities, such as roads and bridges for faster and safer transportation of people from the various destination. 9. Utilizes and mobilizes indigenous resources. Small and medium enterprises will always look for cheaper and local materials to supply their needs. They also make use of idle or unused resources to meet their needs. This saves much in terms of foreign currency as local enterprises patronize their own resources and they do not become dependent on imported materials. 10. Provides more alternatives for consumers. The stiff competition in the market for quality and cheaper products and services requires the entrepreneurs to come up with more products and services consumers can choose from. Entrepreneurs also become more concerned about the welfare of their consumers, and ethical in producing and selling their products or services, in order that consumers will prefer them over the other enterprises selling the same. “New information is important in explaining the existence of entrepreneurship opportunities” – Schumpeter Starting a business is a positive decision on the part of the entrepreneur to exploit entrepreneurial opportunities which are an important and worthwhile endeavor. There are other several reasons, like financial stability, self-fulfillment, helps the family, and provide employment to others, for an entrepreneur to have his/her own business. An entrepreneur has several ways to start a new venture. The most frequently used forms by entrepreneurs are a start-up, buying an existing business, and franchising. A start-up enterprise is a company that is recently formed, where the founder establishes a completely new business from scratch. Advantages Disadvantages • Control • Leverage of OPT (other people’s time) • Unlimited Revenue • Flexible Hours • Freedom to Express Yourself • Difficult • High Failure Rate • No Guarantee • Managing People Buying an existing business is acquiring either the shares of an existing company or all of the assets of an existing enterprise. Advantages Disadvantages It is imperative to have a very good objective grasp of the business and where it will be headed many years from the start of the operation. It means that there should be a clear and documented vision-mission and strategies, to begin with. Start right by “beginning with the end in mind”. SOURCES OF CAPITAL There are different sources of capital that can be used depending on the need to start the venture. These can be from personal funds, family and friends, a retirement account, banks /financial institutions, a government loan, and/or the stock market. Which of these sources will provide you the needed capital given your financial constraints and credibility? GOOD NETWORK Building good relationships and working with other people could help start the business. Formal networks like associations and professional groups, as well as informal networks, like childhood friends, family members, and former classmates, can be drivers to build self-confidence and direction, providers of information that are not readily accessible to others, suppliers of raw materials, and serve as mentors/coaches. LEGAL REQUIREMENTS It is very important to know the laws and regulations that govern the type of business that will be opened to avoid major problems that can arise if legal requirements are overlooked. Examples are the copyright and patent laws, environment and sanitation regulations of the municipality, and labor laws. Do not go into an illegal business where the consequences are greatly unfavorable. There are also businesses with restrictions which might give you difficulties in operation, like mining and quarrying. DEGREE OF RISK Consider the degree of risk related to a specific business opportunity. A business is said to be risky when the probability or chances of failure is high. It means the odds are great in many aspects against starting the business-like limited market, stiff competition, high cost of financing the business, and few supplies of needed labor. RESEARCH AND DEVELOPMENT There should be strong research and development that should be undertaken. The government should provide adequate support to inventors, scientists, and engineers and their new technologies to commercialize their R&D products. The presence of new technology, science, and knowledge transfer from universities and public research centers to new and growing businesses, and the support for the creation of new technology- based ventures, are good indicators to start a business in this area. 5 Production of the Goods and Services • Will the company make or buy what it sells? • Are sources of supplies available at reasonable prices? • Will the raw materials be imported or locally available? • Are there reliable sources of equipment/machinery for the goods/services to be produced? • What appropriate technology will you utilize to produce your products and service? 6 Staffing Decision in the Venture • How will competencies in each area of the business be ensured? • Who does the recruitment and selection of the personnel? • Do you have enough needed talents to start the business? 7 Control of the Venture • What records will be needed? When? • Will any special controls be required? • Who will monitor and assess the performance? 8 Financing the Venture • How much the working capital will be needed? • Who will be providing the financing? • What will be the cost of getting outside financing? • How long will it take to secure the financing? Businessman vs Entrepreneur It is a common assumption that businessman and entrepreneur are the same, but both words refer to a different individual possessing a distinct approach to business. to put it in other words, a businessman follows a set path engraved by some other person with an unoriginal idea, whereas an entrepreneur thinks and believes in making his own path with new ideas. In the future, an entrepreneur can become a businessman. However, between businessman and entrepreneur, there is a thin line difference between businessman is a market player, whereas, the entrepreneur is a market leader. In the below article, we will help you understand the differences between businessman and entrepreneur. A businessman is an individual who operates or starts a business with the same old business idea. The businessman chooses to do business that is high in demand or give him maximum profits in return. The firm faces stiff competition because many companies already exist in the market having the same business ideas. However, the risk factor is very less as the concept has been tried and tested by other existing companies, so the chance of failure is low. An entrepreneur is an individual who has an exclusive idea to initiate and establish a new venture and bring a change in the world. An entrepreneur is highly creative and innovative, takes a risk, and end ures the unpredictability of business. A business started by entrepreneurs with a new concept for the first time is known as Start-up. The entrepreneur is an integral part of the operation, who builds and deploys the other functions of the operations i.e. labor, land, and capital. Later in the future, the entrepreneur becomes a businessman. Now, let us focus on Businessman vs Entrepreneur. Businessman Entrepreneur Definition A businessman is an individual who operates or starts a business with the same old business idea. An entrepreneur is an individual with an exclusive idea to initiate and establish a new venture Market state Market player Market leader Market Makes his place in the market Creates a market Risk factor Less Approximately high Procedure Traditional/Ordinary Unconventional Focus Profit Employee, customer, and public Competition Extremely High Low Most business people aren't actually entrepreneurs. > Know the difference. BUSINESSMAN Sy $1 $1.50 ENTREPRENEUR U Se af $1 $5 —SSEy THE_RONCAST = Everything involves a risk. No risk, Teneo laen AZ QUOTES The opportunity Recognition Process Moreover, entrepreneurs should be able to identify, seize, and pursue business opportunities, successful entrepreneurs are those who can exploit business opportunities. Drucker has identified seven potential sources of opportunity in the external context, namely: (1) the unexpected Opportunities can be found when situations and events are unanticipated. The event might be an unexpected success/good news or unexpected failure/bad news that can be an opportunity for entrepreneurs to pursue. (due to the pandemic, the customized mask business rise significantly) (2) the incongruous Incongruous situations happen when there are inconsistencies in the way they appear (out of place, unsuitable, inappropriate). For example, there are opportunities to capture when conventional wisdom about the way things should be no longer holds true. In these types of situations, entrepreneurs who are willing to think beyond the traditional approach may find a potential opportunity. (there are new business appearing because of the new normal) (3) the process need Entrepreneurial opportunities could also surface throughout the process of discovery such as the process of research and development done by the researchers and technicians of a product or service. Even before a breakthrough, there will be numerous opportunities that could be seized by the entrepreneurs during the process. (due to the need of having CCTS card to go around, business like this is now on-demand) (4) industry and market structures Changes in technology, social and customer’s tastes can change the structure of an industry and market. These situations, however, will give entrepreneurs opportunities to innovate their products or services. (5) demographics Changes in demographics will influences industries and markets, upon their target market segmentation. There can be entrepreneurial opportunities in anticipating and meeting the needs of the population. (In this pandemic there is a sudden change in demographic, unemployment rises but also the online sellers) (6) change in perception Perception is one’s view of reality. Changes in perception get to the heart of people’s psychographic profiles of what their values are, what they believe in, and what they care about. Changes in these attitudes and values create potential market opportunities to alert entrepreneurs. (healthy living perspective; organic fruits and vegetables, natural juices, and fitness gyms are now on-demand) (7) new knowledge Examples of these are the subcontractors of footwear like shoes and slippers; and food manufacturers of peanut butter/coco jam or pastillas, as well as decorative products like vases, candles, and lanterns. Small Enterprise It has an asset of P 500,000 but not exceeding 2.5 million. It is owned by an individual or group and has enough resources to continue operating. It employs from 10 to 20 people. Examples of these are groceries, bakeshops, beauty salons, medical/dental clinics, toymakers, jeepney manufacturers, and travel/tour agencies. Medium Enterprise It has an asset of P5 million to less than 20 million and employs 100 or more workers. It is owned by a single individual, business partners, or a corporation. It employs more than 20 to.100 people. These workers are more skilled and possess the technical expertise to run the business with machines/equipment and utilize various quality controls to make the products. Examples of these are fine dining restaurants with branches, computer importer-dealers, garment manufacturers, human resource providers, and private educational institutions. Large Enterprise It has an asset of P20 million or more. It is often owned and managed by a corporation. It is large in scope of operation and number of products or services that it offers to the market. It employs 100 or more workers who are hired on the basis of their expertise. Its Board of Directors is responsible for its governance and it has a Chief Operating Officer to oversee the implementation of the directives of the Board. It operates in highly formalized but complex systems of management. Examples of these are the big fast-food chains, large department stores, big bookstores, family-owned commercial banks, and insurance companies. According to forms of ownership: There are four forms of businesses, based on ownership, namely: single proprietorship, partnership, corporation, and cooperative. The table below describes briefly each form of ownership with its corresponding advantages and disadvantages culled from the DTI handbook and other sources. Most of our businesses are in the form of single proprietorship. This form dominates the retailing, agriculture, and service industries. FORMS OF BUSINESS OWNERSHIP ADVANTAGES DISADVANTAGES Single Proprietorship is owned and usually managed by one person. They register with the Department of Trade and Industry (DTI). • Easy to set up • Decision-making left entirely to the owner • Easy to dissolve • Retention of all profits • More flexibility • Tax incentives and less government regulation • Demanding on owner's personal time • Growth limited by the owner's financial means • Unlimited liability • Lack of stability • Limited access to credit • Limited business skills and knowledge A partnership is an association of two or, more persons who act as co-owners of a business. Each partner contributes money, property, or service to the business. They register with the Securities and Exchange Commission (SEC). • Relatively easy to set up • Check and balance maintained with two or more owners • Availability of more capital and credit • Retention of profits to fewer owners • A partnership may be endangered by conflicts between partners • A decision made by one partner is binding on all other partners • Generally, liability for debts incurred is unlimited • Lack of Stability A corporation is an artificial being created by operation of law, having the right of succession, and the powers, attributes, and properties expressly authorized by or incident to its existence. They register with the Securities and Exchange Commission (SEC). • Risks and losses are shared with the other shareholders • Maximum flexibility for growth • Limited liability of individual shareholders • Greater room for professionalism in management • Easy to raise capital • Assured of at least 50 years of existence by law • Complicated setting- up process • Individual stockholders may have limited influence on management • A tendency to institutionalize a bureaucracy • Strictly regulated and supervised by the government This section includes the physical or chemical transformation of materials, substances, or components into new products. Electricity, Gas, Steam, and Air-Conditioning Supply This section includes the activity of providing electric power, natural gas, steam, hot water, and the like through a permanent infrastructure (network) of lines, mains, and pipes. Water Supply; Sewerage, Waste Management, and Remediation Activities This section includes activities related to the management of various forms of waste, such as solid or non-solid industrial or household waste, as well as contaminated sites. Construction This section includes general construction and specialized construction activities for buildings and civil engineering works. It includes new work, repair, additions and alterations, the erection of prefabricated buildings or structures on the site, and also the construction of a temporary nature. Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles This section includes wholesale and retail sales (i.e sale without transformation) of any type of goods and the rendering services incidental to the sale of these goods. Transportation and Storage This section includes the provision of passenger or freight transport, whether scheduled or not, by rail, pipeline, road, water, or air and associated activities such as terminal and parking facilities, cargo handling, storage, etc. Accommodation and Food Service Activities Administrative and Support Service Activities This section includes a variety of activities that support general business operations. These activities differ from those in Section M since their primary purpose is not the transfer of specialized knowledge. Arts, Entertainment, and Recreation This section includes a wide range of activities to meet varied cultural, entertainment, and recreational interests of the ge neral public, including live performances, operation of museum sites, sports, gambling, and recreation activities. Public Administration and Defense; Compulsory Social Security This section includes activities of governmental nature, normally carried out by the public administration, this includes the enactment and judicial interpretation of laws and their pursuant regulation, as well a s the administration of programs based on t hem, legislative activities, taxation, national defense, public order and safety, immigration services, foreign affairs and the administration of government programs. Education This section includes education at any level or for any profession, oral or written as well as by radio and television or other means of communication. It includes education by the different institutions in the regular school system at its different levels as well as adult education, literacy programs, etc. Human Health and Social Work Activities This section includes the provision of health and social work activities, involving a wide range of activities, starting from health care provided by trained medical professionals in hospitals and other facilities, over residential care activities that still involve a degree of health care activities to social work activities without any involvement of health care professionals. Other Service Activities (as a residual category) This section includes the activities of membership organizations, the repair of computers and personal and household goods, and a variety of personal service activities not covered elsewhere in the classification. Department of Agriculture ▪ Agri-Fishery and Microfinance Program ▪ Fisheries Financing Program ▪ Agri-Microfinance Program (AMP) for Small Farmers and Fisherfolk and their Households ▪ Cooperative Bank Agri-Lending Program (CBAP) Department of Social Welfare and Development (DSWD) ▪ Self-Employment Assistance- Kaunlaran (SEA-K) Program Development Bank of the Philippines ▪ Microfinance Program ▪ Retail Lending for Micro and Small Enterprises Foundation for a Sustainable Society, Inc. (FSSI) ▪ Microfinance Eco-Enterprise Program (MEEP) GSIS Family Bank (GFB) ▪ GSIS Family Bank Microfinance Lending Program Land Bank of the Philippines (LBP) ▪ Microfinance Program for Microfinance Institutions - Retailers ▪ Credit Program tor Cooperatives ▪ Accelerating Change in the Countryside thru Equity sharing strategy (AC- National Livelihood Development Corporation (NLDC) ▪ Livelihood Credit Assistance Program (LCAP) ▪ Livelihood Development Program for Overseas Filipino Workers (LDPO) Opportunity Kauswagan Bank, Inc. ▪ Proyekto sa Kauswagan sa Katilingban (PKK) ▪ Micro Enterprise Transition Program (METP) ▪ Micro Enterprise Development Program (MEDP) 3 ▪ Micro, Small &Medium Enterprises Development Lending Program (SMED) People's Credit and Finance Corporation (PCFC ▪ Microfinance Program ▪ Micro-Housing Loan Facility ▪ Micro-Energy Credit Program ▪ MFI Employees' Loan Facility Philippine Microenterprise Development Foundation (PMDF) ▪ Balikatan sa Kaunlaran (Partnership for Progress) ▪ Micro Lending Through Lead Micro Finance Institutions (Micro-LEAD) ▪ Micro Lending Through MSME-Oriented Rural Banks (Micro-LOCAL) ▪ Micro Lending Through Small Micro Finance Providers (Micro-LEAP) ▪ Wholesale Lending Window for Graduating Micros and BMBES b. Marketing The DTI, through its various agencies, provide marketing support to small enterprises by means of: • o exposure in local and international trade fairs, expositions, trade missions to various countries-trading partners, and other trade events through the Center for International Trade Expositions and Missions (CITEM) o provision of domestic trade database, including local suppliers courtesy of the Bureau of Domestic Trade (BDT) o provision of export trade database and consultation services by the Bureau of Export Trade Promotion (BETP) and the Bureau of International Trade Relations (BITR) c. Training and Human Resource Development The DTI, in cooperation with local government units and local industry associations, has set up SME Centers Nationwide manned by business counselors who are trained to assist entrepreneurs in their finance, marketing, technology, and training needs. In terms of formal training, entrepreneurs may check out the following services in SME Centers: • o Skills and other production-related training – from the cottage industry Technology Center (CITC) and the Technical Education and Skills Development Authority (TESDA) o Entrepreneurship, managerial training, including business improvement – from the UP Institutes of other schools and universities o Export marketing training – from the Philippine Trade Training Center (PTTC) d. Product Development and Technology Assistance For assistance in product design and development, the agency to approach is the Product Development and Design Center of the Philippines (PDDCP). For packaging design, testing, and analysis, it is the Packaging Research and Development Center (PRDC). On the other hand, the Department of Science and Technology (DOST) has a number of research and development institutes that undertake R&D for new products and product innovations. These include The Industrial Technology Development Institute (ITDI), the Technology Application and Promotion Institute (TAPI), the Metals Industry Research and Development Centre (MIRDC), the Philippine Textile Research Institute (PTRI), and the Forest Products Research and Development Institute (FPRDI). e. Legal Requirements A new enterprise has to be registered in various government agencies. The complexity of registration varies according to the legal form of the business. A single proprietorship is the easiest to register, while a corporation requires more elaborate procedures. Below is the list of various government agencies and local government units where the entrepreneurs should secure the necessary legal requirements to operate their business. Registering with the Department of Trade and Industry (DTI) The DTI-NCR and DTI Provincial Offices Nationwide administer the registration of business names. If you are a single proprietor and your business is using a name other than your true name, that business name should be registered. By registering your business name with the DTI, you are assured that no other entity may legally use your business name anywhere in the Philippines. Where to register: 1. Metro Manila Area Area 1 Office (Manila, Pasay, Makati) 2/F, Park and Ride Lawton, P. Burgos Ave., cor. Dr. Basa St. Ermita, Manila (Beside LRT 1 Central Station and Metropolitan Theater) Telephone No. 536.7153/ Fax No. 527.7429 Email: eca@dticr.ph/dticr@info.com.ph Area 2 Office (Las Piñas, Parañaque, Pasig, Muntinlupa, Pateros, Taguig) 2/F, Atrium of Makati Bldg., Makati Ave., corner Paseo de Roxas St. Makati City Telephone No. 501.5135/ Fax N0. 811.8271 Email: aadr@dtinr.ph/dticr@info.com.ph Area 3 Office (Mandaluyong, Quezon City, Marikina, San Juan) Ground Floor, Highway 54 Plaza, EDSA Mandaluyong City (Across Mega Mall) Telefax No. 706.1767 Email: mgrs.@dticr.ph/dtincr3@ingo.com.ph Quezon City Satellite Office 2/F, Cooling Tower, Quezon City Hall (Beside Quezon City Post Office) Area 4 Office (Caloocan, Malabon, Navotas, Valenzuela) 5/F, Araneta Square Mall Bonifacio Monument Circle, Rizal Ave. Ext. cor. Samson Rd., Caloocan City Telephone No. 332.0829/ Fax No. 362.7664 Email: emd@dtincr.ph/dticnr4@info.com.ph Valenzuela Satellite Office 3/F, Valenzuela Convention Center, Valenzuela City Hall Compound 2. Deposit paid-up capital/contribution (for foundations only) in the bank. 3. Present six (6) sets of the accomplished forms and documents for pre-processing at the CRMD. Only complete application documents are accepted for processing. All documents executed outside the Philippine must be authenticated by the appropriate Philippine Embassy or consulate in the area concerned. 4. Pay the filing fees to the Cashier 5. Claim the Certificate/License from the Releasing Unit, Records Division upon presentation of the official receipt issued for payment of filing fee. For complete details and online registration, visit www.sec.gov.ph/secireg.htm (Links to an external site.) Registering with the Social Security System (SSS) An employer or any person who uses the service of another person in business, trade, industry, or any undertaking must be registered with the SS. Social, civic, professional, charitable, and other non-profit organizations, which hire the services of employees, are considered “employers”. Register at: Social Security System (SSS) SSS Bldg., East Avenue, Diliman, Quezon City Tel. Nos. 920.6401/920.6446 Email: member_relations@sss.gov.ph/website:www.gov.ph Single Proprietorship An owner of a single proprietorship business may accomplish and submit SSS Forms R-1 (Employer’s Data Record) and R-1A (Initial or Subsequent List Employees). Partnerships Any of the partners of a partnership firm should accomplish SSS Forms R-1 and R-1A and submit these forms together with a photocopy of the Articles of Partnership. The original copy of the Articles of Partnership must be presented for authentication. Corporations A corporation must accomplish SS Forms R-1 and R-1A signed by its president or any of the corporate officers or incorporators. Submit these forms together with the photocopy of the Articles of Incorporation. The original copy of the Articles of Incorporation must be presented to the SSS for authentication. For complete details and information, visit www.sss.gov.ph (Links to an external site.) Registering with the Cooperative Development Authority (CDA) All cooperatives are required to register with the CDA as per Republic Act to register with the CDA as per Republic Act 6938/6939. Register at: Cooperative Development Authority (CDA) 6/F, Benlor Bldg., 1184 Quezon Ave., Quezon City Tel. No. 373.6895 Website: www.cda.gov.ph (Links to an external site.) Steps: • o ▪ Submit four copies of the Articles of Cooperation. ▪ Submit four couples of the By-Laws. ▪ Submit four copies of the Economic Survey (feasibility study). ▪ Submit Bond Accountable Officers (Fidelity, Cash, or Surety). ▪ Capitalization should not be lower than P2,000 (depending on the activities registered). ▪ At least 15 members are required. For complete details and information, visit www.sss.gov.ph (Links to an external site.) Registering with the Bureau of Internal Revenue (BIR) Every business enterprise has to register with the BIR for taxation purposes. Below are the steps to follow: • o Secure a permanent record file number of Tax Identification Number (TIN) from the BIR from National Office in Diliman, Quezon City. • o Register the business /trade name at the BIR Office nearest you. Secure and file an application form, together with supporting papers, as follows: • o Mayor’s Permit o Certificate of Business Name Registration from the DTI o Articles of Partnership or Corporation o Community Tax Certificate o Secure authority to print books of account, invoices, receipts, and other accounting records by filing up for copies of an application form. Attach four draft copies of the material to be printed as well as a copy of the job order. • o Register book of accounts, invoices, receipts, etc. For complete details and information, visit www.bir.gov.ph (Links to an external site.) Registering with the Department of Labor and Employment (DOLE) Business establishments with one or more employees are required to register with DOLE, the agency which monitors compliance with labor laws. The Bureau of Local Employment administers the registration of establishments. To register, secure, and fill up a registration form. Corporations are required to attach a Photostat copy of the SEC Certificate of Registration. Register at: Department of Labor and Employment (DOLE) 2/F, Dy International Bldg., San Marcelino cor. Gen. Malvar St. Malate, Manila Tel. No. 339.2013/527.8000 Email: osec@dole.gov.ph/Website: www.dole.gov.ph (Links to an external site.) Registering with the Local Government All businesses, whatever legal form, are required to secure a mayor’s permit or municipal license from the city or municipality where they are located. Various cities and municipalities have different registration procedures, but the following steps prescribe in Quezon City would be typical: 1. 1. Go to the Business Permit and Licensing Office of Quezon City Hall. Secure an application form from the Public Assistance Office. 2. Submit three copies of the form together with a simple sketch of your business location. 3. Support application with a certificate of Business Name Registration from the DTI-NCR if you are using a firm name. 4. A partnership or corporation must be submit the corresponding Articles of Partnership or Corporation duly registered with the SEC, together with a Photostat copy of the Certificate of Registration with the SEC, and the current class “C” certificate in the case of corporations. 5. Proceed to the City Treasurer’s office for any payments to be made. Present Mayor’s Permit for issuance of the business license. Note: Business establishments are required to exhibit the mayor’s permit conspicuously in the business establishment. Registering with the Other Agencies I P O B l d g . , 3 5 1 S e n . G i l P u y a t A v e . , M a k a t i C i t y Tel. No. 752.54 50 Fax No. 890.48 62 Email: mail@i pophil. gov.ph Websit e: www.ipophil.gov.ph (Links to an external site.) For firms wishing to register patents and trademarks DTI- Bureau of Trade Regulation and Consumer Protection (BTRCP) 2/F. Trade and Industry Bldg., 3 6 1 S e n G i l P u y a t A v e . M a k a t i C i t y T e l . N o . 7 5 1 . 0 3 8 4 Email: btrc@dti.gov.ph For ente rpri ses eng age d dire ctly or indi rect ly in the servicing, repair or maintenance of vehicles, engines and engineering works, electrical components, electronics, air conditioning and refrigeration, office machines and data processing equipment, medical and dental equipment. Technical personnel, (e.g., mechanics or technicians) are also within the scope of the BTRCP. DOLE, SEC, DTI are among the different government agencies responsible for the registration of new enterprises. The Business Plan The business plan is a blueprint of the business that the entrepreneur would like to start. It aims to establish if a business idea will bring in a fair return to one's investment, will be beneficial to society, and will bring no harm to the environment when it is operated. There are many business ideas that may look attractive to the entrepreneur at first, but not necessarily "doable." The goals of a business plan are; • to assess the feasibility of the business idea, • develop business strategies to make the business idea doable, and • to use it for obtaining resources, especially loans from financial institutions like banks. According to the Department of Trade and Industry, through the Bureau of Small and Medium Enterprise Development (BSMED) the following are the reasons why an entrepreneur still needs to make a business plan, no matter how good the business idea seems to be: 1. Reduce, if not remove, the risk of losing money invested in a poorly re-searched or unstudied business idea. The entrepreneur should find out where one's money is going before letting go of it. 2. Avoid costly mistakes. Every sudden or careless decision the entrepreneur makes for the business entails costs that one might not be able to recover. 3. Anticipate financial requirements. It is always wise to foresee sudden increases or decreases in the demand for the product or service so that the entrepreneur 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. 4. Organize the activities beforehand. As a road map on unfamiliar territory, it allows the entrepreneur to estimate how the business will perform in the future and to prepare for contingencies in case things will not turn out as planned. 5. Assess actual performance against set goals. It enables the entrepreneur to set targets in terms of sales volume and revenues, as well as expenses, among others. Once the business is put up, the entrepreneur can always go back to the business plan to compare actual performance against the set goals. 6. Apply for financing from lending institutions. A well-prepared business plan can be the back-up support to convince possible sources of capital, especially banks, that something good will come out of the business idea. Management and Organization Company Name: My T-Shirt Logo: Address: 88 Ocampo Street, Bocaue, Bulacan Vision Statement: "My T-Shirt will be a leading provider of personalized, good quality, and fashionable printed casual T- shirt wear that is attuned to the needs of the youth.' Mission Statement: "My T-shirt is a socially responsible company providing high quality, personalized, and reasonably priced printed T-shirts which caters to the clothing needs of the youth in Bulacan." Key personnel: manager Workforce and Support personnel: graphic designer/production assistant Organizational Chart: (Note: Add the description/work of each position in your organizational chart) ex. Manager - He will be the overall in-charge of the business. He will manage the operations, financial, and marketing areas of the business. Ownership: Single Proprietorship Capitalization: P49,700.00 (note: make a detailed breakdown of your capitalization in the financial section) Compensation and incentives: Minimum wage based on a daily rate as provided by law. External Management Support: Parents and Entrepreneurship teacher will be tapped as Advisory Council. Product Plan Purpose of the Product My T-Shirt will offer customers a variety of options for choosing their own custom shirts. Most of the orders will be for the white-shirts; however other colored t-shirts will be available both for women and men who are looking for casual yet trendy shirts. The customers may choose from the existing designs, supply their own, or have our graphic designer create a design for them. Product's Unique Features My T-Shirt has two unique features. The first is the wide array of graphic designs and create your own or personalized design, graphics, and slogans that connect with the customers and reflect their opinions and personality. The second unique feature is the high quality of screen printing which is made from the premier silkscreen ink and paints and handled with utmost care in every print. Below is a sample of a T-shirt design. Sample t-shirt: Material and Equipment requirements and sources of supply The materials requirements and their sources are as follows: MATERIALS SOURCE Screen printing press Silkscreen printing specialty store in Divisoria Wood screen Hardware store in Bocaue, Bulacan Squeegee Hardware store in Bocaue, Bulacan Silkscreen fabric ink Silkscreen printing specialty store in Divisoria Photo emulsion Silkscreen printing specialty store in Divisoria Lightbulb Hardware store in Bocaue, Bulacan Shirt Wholesale Store in Divisoria Transparency or acetate film Bookstore in Bocaue, Bulacan Production Process and controls that will be used to manufacture the product Below is the Silk Screen Process using the Photographic Emulsion Method 1. Create your design ▪ Print out a solid image design on a transparency paper ▪ Or cut out a stencil pattern depending on the design 2. Prepare the frame ▪ Coat the screen with photo emulsion ▪ Leave it to dry in a darkroom from light and heat, especially direct sunlight 3. Transfer image ▪ Lay the screen on top of a black cloth or board for better light absorption. ▪ Place the transparency or stencil on the screen with scotch tape or lay a piece of glass over the image to hold it tight to the screen ▪ Expose the emulsion under a light source, preferably a lightbulb or direct sunlight, for 20- 30mimutes to harden Marketing and Sales Strategies Marketing Strategy An aggressive marketing campaign will aim to increase the visibility of My T-Shirt. This will emphasize the customer’s preference to completely customize or personalize their design. My T-Shirt will utilize a number of venues to communicate this message. ▪ Social Media – the company will be active on social media platforms specifically Twitter, Facebook, Instagram, and Pinterest, to increase awareness and visibility to the younger generation, particularly the millennial. ▪ Student Organizations – the company will attempt to gather data on the various student groups who actively purchase shirts for their members. A linkage will be established with them so that they become aware of the My t-Shirt products. This will achieve through a combination of sponsorship of student organization events as well as advertisements through tarpaulins and flyers that specifically target this demographic. Sales Strategy The sales strategy will emphasize that ordering and buying a shirt from My T-Shirt is very easy, accessible, and a pleasing experience. The sales effort will work on the possibility of having its own website in the long run, the main tool used for ordering. It will be quite to have a friendly, easy to use the web interface in the future course of the business. My T-shirt will also rely on three other factors to help boost sales. The first is exemplary customer service. Having excellent service will provide the customer with the feeling that the business is looking out for the customer’s interest. Second, when a customer places an order, they will probably be excited to see the finished product, so My T-Shirt will ensure the shortest turnaround time possible. Lastly, sales will be boosted by offering customers a very good product. My T-Shirt will ensure economical value for the T-shirt without sacrificing its quality. Product Characteristics or features My T-Shirt products have a number of competitive features that will be used to its advantage to achieve market penetration. o Large catalog of graphics – customers will be offered an array of designs or graphics to choose from which are conceptualized by the in-house graphic designer. Your T-Shirt! pays a royalty for use of these graphics. o Affordability of the shirts – teenagers still being dependents and having a limited budget to splurge, it is favorable for them to have access to inexpensive yet quality shirts. Pricing policy My T-Shirt Company will adopt the differing price based on the size and complexity of the design policy. As such, below is the pricing scheme that will be adopted: SIZE OF THE T-SHIRT PRICE (PESO) Small 160 Medium 170 Large 180 Extra Large 190 Sales Projections Market Analysis Summary The demand for silkscreen printed shirts in Bulacan has shown steady growth over the last 5 years. It was observed the high school and college students are among the biggest market for the product. These market segments favor trendy and quality shirts at an affordable price. To increase market penetration, My T-Shirt will offer a large catalog of graphics aside from the affordable shits to its intended market segment. At the same time, an aggressive marketing campaign will be done to increase the visibility for My T-Shirt through the use of social media and tapping the various school student organizations. My T-Shirt offers a price differential based on the size and complexity of the t-shirt design with prices ranging from Php 160-190. Financial Plan • Start-up Costs Requirements • Financial Projections • Breakeven Analysis • Budget Start-up Summary Expenses creen prin ress #0od screen [3U uses; queegee f n fabric ink (60 5 oto emulsion SCTEENS ransparency or acetate , rcost ermits 5-Years Profit/Loss Statement My T-Shirt Company Projected Cash Flow for Years 1-5 Year 1 Year 2 Year 3 Year 4 Year 5 | Beginning F700 87,005.60 T39,985.00 220,505.50 WW5,559.04 Cash Balance | Cash Inflows income) ch sales TES, 70000 Bet,st000 550,71000 TU45.75000 | LIs0csc000 | | Total Cash 755,760.00 Bez st000 FS0,710.00 TUs5.73000 | Lis0.ss2000 Inflows | Cash Outtlows peberses ayrol T36,00000 T7T,B0000 TES, 76000 ZO7,bs600 225,400.00 | Supplies FIZ, 800.00 454,050.00 BEER SY 34545700 BUF s0000 | Taxes ce T500.00 T300.00 T 300.00 T300.00 T500.00 Licenses Valities & F500.00 10,500.00 TTS16.00 12,778.00 T3005.00 Telephone | Ocher: 65,427.00 7637 1.20 B3,907 os 52370.04 TOL61250 | Subtotal 649,527.00 712,611.20 EESIEZES BS2,c21.04 ST | Other Cash Outflows: Loan Principal | Owner's Draw | 119,127.00 Tod 1.00 Bao55.05 3345505 TI30.3520.00 | | Subtotal 119,127.00 T251.00 BS 555.05 33,455.05 T,130,.3320.00 | Total Cash Teo45440 T351,s60.00 Kiiye SST Ish25 TUsie7 Les Outflows [Endingtash | 67,005.00 T39,985.00 220,s0550 WS, 555.24 WS 607 SE Balance who identifies opportunities, plans, mobilizes resources, manages, and assumes the risks or a business to have a positive impact on society" The 21st century is considered the entrepreneurial era. This number of entrepreneurs increases every year, such that in 2006, about half a billion people worldwide were either actively engaged in starting a new venture, or were owner-managers of a new enterprise. The Global Entrepreneurship Monitor (GEM) reported that also in 2006, approximately 19 million Filipinos, or 39% of the population, are engaged in various types of business activity. GEM further recorded that the Philippines had the highest established business rate globally, with one out of five Filipinos or 19.73% owning and managing an established business. Globalization is coupled with changes in the social, economic, political, and technological environment. These factors altered the specific dimensions of being an entrepreneur. What is emerging as the characteristics of entrepreneurs today is shown in the table below: ENTREPRENEUR DIMENSION IN THE PAST TODAY Educational Attainment Less Educated Highly educated Gender Older Younger Previous Experience Dominated by males Mixed ownership by women and men Knowledge of Business Less business and experience employment More business or employment experience Utilization of information technology Relies on manual systems Proficient in and uses to a large extent of information technology Innovation orientation Automation for efficiency Values innovation for a new venture creation and discovery Goal Economic and financial gains Social, ecological and economic gains Principle of governance Compliance and centralized Ethical, transparent, and group accountability Use of work structure Highly structured to meet demands More flexible to better balance their work and family lives Leadership Style Directing Empowering Drive orientation To get ahead To make a difference Perspective of self- confidence “ I can do it” “We can do it” A review of the literature showed that the personal characteristics often attributed to entrepreneurs are confidence, flexibility, need to achieve, responsibility, commitment, creativity, persevering, goal-oriented, realistic, sincere, hardworking, visionary, disciplined, feedback-seeking, moderate risk-taker, and many more. These data likewise revealed some common profile dimensions which are also applicable even among Filipino entrepreneurs today. The following is a compilation based on various sources: Calculated Risk Taker Calculated risk-taking is doing everything possible to get the odds in their favor, and they often avoid taking unnecessary risks. Examples of this includ, creditors giving discounted interest rates, and suppliers offering special terms of payment for the raw materials. These could all help to lessen the risks entrepreneurs have to face in managing the business. Committed Commitment is the unwavering dedication to work for the common good of the society through one's business. Examples of this include a willingness to use one's own savings, sacrificing family time, and working long hours, and traveling to different places to acquire needed resources. Feedback-seeker Feedback-seeking is the taking of steps to know how well they doing and how they might improve their performance. One example is by constantly asking for comments, reactions, and suggestions from their employees and customers, then using this feedback to improve their product or services. Persevering Perseverance is the determination to succeed by overcoming obstacles and setbacks. Often, entrepreneurs will not easily give up when problems come their way. They will try to see opportunities even in times of crisis and look for options for the business to succeed. Examples of this include borrowing money from other sources to augment capital; looking for and training employees when there is an exodus of people to work abroad; and asking for the help of the government to give more support to small businesses. Innovative Innovativeness is the ability to come up with something different or unique every time. This can be in terms of a new product, service, process, market, or technology. This trait is often related to creativity or thinking- out-of-the-box in any given situation to look for an opportunity for business. Examples include the development of new models of iPod/mobile, Phones, home delivery of products from supermarkets/drugstores, online buying of many products (books, clothes, jewelry, food); introduction of online services (class enrolment, payment of bills, deposit/withdrawal of accounts); and ethnic cuisines prepared in attractive ways by restaurants. Responsible Responsibility is their willingness to put themselves in situations where they are personally responsible for the success or failure of the business operation. This is the essence of being accountable for whatever is done by subordinates. Examples of this include taking on the blame for mistakes of the employees; admitting to customers that there is an error that was done and that this will be corrected; and standing up for what is right for ethical issues that will put the company in a dilemma. Resilient Tolerance for failure is using it as a learning experience. Serious setbacks and disappointment become an integral part of the learning process. Entrepreneurs are realistic enough to expect such difficulties, so they do not become disappointed, discouraged, or depressed by a setback or failure. Examples of this include confronting the source of their problems like employees or suppliers; not repeating the same mistake in the production of a product; and admitting to the customer that there is a need to improve their services so that the same or similar complaints are avoided in the future. Marketing The 7Ps of Marketing “Everything matters with marketing and that broad, integrated perspective is often necessary”. (Kotler & Keller) estimate potential market demand. Estimation is an educated guess. The best way to be very certain and confident about estimates for potential market demand is to look for facts about the industry where the entrepreneurs intend to enter. Census data is a good source of estimates to be able to project sales. The traditional marketing mix elements comprised of the 4Ps of product, price, place, and promotion has enjoyed tremendous popularity over the years in an era where most business sold products. In 1981, Booms and Bitner extended the marketing mix by 3 new Ps that directly relate to the service provision industry. These new elements are people, physical evidence, and process. The marketing mix decisions are made for influencing the trade channels as well as the ultimate customers’ solution, cost, convenience, and awareness of what is being offered in the market. These 7Ps or element of the Marketing-mix can be defined base on the publication cites in 7Ps in Marketing (2014) and other sources about the topic: (Adapted from entrepreneurial- in-sights.com) The product is not necessarily produced and consumed in the same place. The place of production or the plant site can be different from the place of distribution or selling. "As mentioned, the service is produced and consumed in the same place. It cannot be owned and taken away from the location. This is why the place at which this transaction occurs is of vital importance. The location of the service provision is carefully analyzed to allow ease of access and the desire to make the effort to reach it. Fast food restaurants and sales and service centers may be located in busy main streets to allow walk-in customers, while a fine dining restaurant may be located in a quiet street to maintain exclusivity and privacy." Promotion The product should be promoted to the appropriate audience via appropriate channels, using advertising methods that resonate with that audience. These channels may include (and are not limited to): • branding • advertising • PR • corporate identity • social media • content marketing • influencer marketing • sales management • promotions • exhibitions The product/service benefits and features highlighted through promotion should align with the audience’s most compelling requirements. Promotion may differ somewhat in tone and content from channel to channel – but never in such a way as to create contradictions. It fulfills the same role as it does in any other marketing context. Service may be more easily replicated than a physical product. To prevent a service from becoming interchangeable with its competitors, it becomes vital to create a desirable brand image and name in the market. Differentiation becomes a key goal in order to attract both new and repeat customers. People The team involved in the delivery of the project should possess the skills and qualities needed to ensure its success (barring unforeseen mishaps). This is perhaps especially true of customer-facing staff, whose communication and behavior will greatly impact the audience’s perception of the brand. You could well have developed the best product of its kind – but if your customer-facing people are off-putting to customers, the project will not reach its full commercial potential. As such, marketing campaign teams must put in place processes and best practices for how customer- facing team members behave publicly and communicate with customers. Methods for doing this include distributing a social media policy (Links to an external site.), paying attention to communication skills when hiring customer-facing staff, providing training on good communication, and imposing disciplinary measures to deter misbehavior. In the production of a product, the people needed to do the tasks are not directly dealing with customers so that the customer service training is not a priority but production-related training is. People element is vitally important in the service marketing mix. “When a service is being delivered, the person delivering it is not unique from the service itself. When dining at the restaurant, if a rude waiter is encountered, the entire experience will be labeled as bad service. This is why many businesses invest in defining the right kind of person to fill their service role and then making efforts to find or train people to fit this definition.” Process The processes involved in a product’s delivery will significantly affect the customer’s experience, level of satisfaction, and lifetime value to your business. These processes may include (and are not limited to): • Website user experience • Delivery time • Delivery methods and service • In-store wait time • Communicating with customer support • Aftercare In addition to the processes used to deliver a product or service, we must also have processes in place for when something goes wrong – for example, the allocation of appropriate compensatory gifts for customers who’ve had a bad experience. Production of a product can be standardized, customized/personalized, or both. The processes of production can involve steps/procedures that require precision and standard measures of inputs to produce the desired quality and quantity of the product. However, "since service provision needs to strike a balance between customization and standardization, the process involved in the activity requires special mention and attention. A process needs to be clearly defined for the service provider. This basic process should ensure the same level of service delivery to every customer, at any time of day, on any day. Within this process, there should provide a unique experience" Physical Evidence The final P refers to the physical context and paraphernalia (such as receipts, “thanks for ordering” cards, confirmation emails, and PDF invoices) that come along with the product. In order to reinforce the product’s and the seller’s credibility, these components should exhibit the qualities customers expect of them, based on up-to-date industry standards. For example, precious jewelry might be displayed within a locked cabinet; ethical supermarkets might choose to use as little print as possible on their receipts (or offer digital receipts as an alternative), and doctors’ surgeries should look suitably clinical. In a nutshell, “Physical evidence” is all about ensuring every component involved with the product adheres to the same brand values as the product itself. This creates a consistent, convincing experience for the customer. Who is going to use your product/service? How old are they? Are they male or female? Are they married, single, or separated? do they have children? Where do they live? What is their level of education? Understand existing customers Why do customers choose your product over competitors? What do they value? It is service. Product quality or the prestige associated with consuming your product/service? Who influences their buying decision? What magazines do they read? What websites do they visit? What do they enjoy doing? Set realistic targets From the information, you collect you will be able to set realistic targets for areas such as growth, sales, and the introduction of new products/services. Develop effective strategies From your research, you will be able to make informed marketing decisions about how to price your product/service, how to distribute product/service, which media channels to use (e.g. newspaper, radio, or direct marketing) or whether to develop a new product/service. It will also help you make an informed decision about starting, building, consolidating, diversifying or reducing business activity. Examine and Solve business problems If you have identified a business problem, research will help you work out what is happening. For example, if your sales have fallen you might discover that brand awareness has also fallen, or that a new competitor has entered the market or a substitute product has become available. Prepare for business expansion The research will help you identify areas for expansion and test the market’s readiness for a new product/service. For example, you could be looking to open a new retail store and you need to find the right location or you could plan to or make changes to your distribution channel (e.g.; from home parties to retail). Personal interviews are a traditional method of data collection which is normally done in a face-to-face manner with the respondents. They can either be semi-structured discussions with individual or open- ended questions where the interviewer can probe further to understand underlying perceptions and behaviors of customers or other types of respondents. As discussed in the Guide to Market Research and Analysis (2015), personal interviews are a more expensive alternative to FGDs and generally used in the following situations: ▪ The topic is too personal or sensitive to be discussed in a group, or the confidentiality of the participant is required. ▪ A person’s opinion may easily be influenced by others in the group. ▪ It is important to learn as much about what people don’t know about a subject, as what they do know. In a group setting, knowledgeable participants may inhabit less knowledgeable ones from participating. ▪ Logistic problems may make groups impractical. For example, if participants are geographically dispersed, travel time and costs may be prohibited. ▪ The interview respondents are executives from competing firms who would be reluctant to open up in a group situation. ▪ The interview respondents are busy and it is difficult to schedule group sessions, or it is important to visit interview respondents individually at their convenience. Furthermore, the Canada Business Network (Guide to market research and analysis (2015), also describe the following considerations in the use of personal interviews in market research: ▪ It can be helpful to use a list of mostly open-ended questions to be asked in person or by telephone. ▪ An in-depth interview gives participants the opportunity to express their views. ▪ Interviews typically last from 15 to 40 minutes, but they can last longer, depending on the participant’s interest in the topic. ▪ This technique allows the interviewer to get detailed descriptions of individual experiences. B. Secondary research gathers data from existing available resources like company records, databases, and research reports published in the media, internet search engines, libraries, and books which answer the question at hand. It is normally less time consuming than primary research and can be less expensive as well. Existing company records such as sales invoices, receipts, and formal complaints are important secondary resources that businesses can utilize. Oftentimes these records shed light on the same issues businesses seek to address through primary research, and therefore an examination of company records should be done before considering a customer survey or other form of primary research. Another key secondary resource is statistical data from official statistics providers (like National Statistic Office; NEDA; Department of Trade and Industry) and other organizations (Marketing Associations; Chambers of commerce: Industry Associations). These statistics in turn can feed into analytical papers and market profiles that can help to put the numbers in context. BRANDING According to Canon, Perrault, McCarthy (2008), b randing means “the use of a name, term, symbol, or design – or a combination of these – to identify a product.” It encompasses the use of brand names, trademarks, and The upside of descriptive names is that they clearly communicate your company’s core competency. The potential downside is that they hamstring your brand as it grows and looks to diversify. Descriptive names are also notoriously difficult to trademark as, by definition, they rely on common words or phrases. 2. Evocative Brand Names On the other end of the creative spectrum from descriptive brand names are evocative names. Evocative names use suggestion and metaphor to bring to mind the experience or positioning of a brand. Evocative brand names are often creative and unique and can make for powerful differentiators. Because they leave some room for interpretation, evocative names enable you to tell a powerful brand story, creating a brand that’s bigger than just the products or services you offer. In this way, an evocative name can be the cornerstone of a brand’s positioning, where other types of brand names cannot. Powerful examples of evocative names include: • Nike • Smart • Datu Puti • Puma • Apple Their originality means that evocative names are generally easier to trademark than descriptive names. It can sometimes be challenging to get corporate buy-in on an abstract name that requires unpacking, though. That’s why it’s so important to define expectations at the outset of a naming project. 3. Invented Brand Names The best part about brand names is that if you can’t find the perfect word, you can always make one up. Invented names are etymological fabrications that are nothing if not distinctive. Invented brand names offer the most creative latitude for a brand, but that doesn’t mean they’re easy to conjure. Many invented names are built from Latin, Greek, or other foreign root words and modified to best embody the brand’s personality. Successful invented names include: • Kodak • Jollibee • Penshoppe • Adidas • Google Each of these brands has managed to build monumental brand equity with their invented name over the years. The challenge with invented brand names, though, is that they have no inherent meaning when first invented. While they’re a breeze to the trademark, invented names can require significant time and marketing spend to build a meaningful narrative around them. 4. Lexical Brand Names Lexical brand names rely on wordplay for their memorability. Puns, phrases, compound words, alliteration, onomatopoeia, intentional misspellings, and foreign words are all styles of this popular naming type. Lexical names are often clever—sometimes, arguably, too clever—and get their impact from pairing or modifying existing words for linguistic effect. Examples of lexical brand names include: • Dunkin’ Donuts • Fibr • Uniqlo • Flickr • Tumblr The risk with these types of names is that they can come off as shamelessly salesy. Modern audiences have been exposed to decades of schlocky advertising techniques and don’t often identify with clever wordplay. That said, lexical brand names aren’t all bad. Intentionally misspelling a word so you can leverage its original meaning while skirting trademark concerns, is a subtler approach to lexical names that have been used to great effect by notable brands like Flickr and Tumblr. Just keep in mind that in branding, as in everyday life, there’s nothing worse than a pun that makes your eyes roll out of their sockets. 5. Acronym Brand Names Acronyms have been used for brand names since branding first crawled out of the primordial soup. A long history does not mean this type of brand name is effective, though. While functional and utilitarian, acronyms are sorely lacking in meaning and emotion. Examples of brands with acronymic names include: • IBM • GMA • SPAC • ABS-CBN • DBP • SM • HP Brands like IBM, GMA, BP, and PBA haven’t been hampered in the least by the fact that their names are nothing more than a series of unrelated uppercase letters. KFC’s diversion to acronymic naming type allowed the brand to temporarily disassociate itself from the consumer backlash against trans fats. A startup these days would be hard-pressed to come up with a great reason to name their company with an acronym, though. As a rule, acronyms are hard for audiences to remember and even harder for attorneys to trademark. 6. Geographical Brand Names Analyze the competitors It is first knowing what the competitor's marketing is and then, understanding why the target market is buying or will buy from the competitor. Knowing what the competitor is marketing includes: the competitor's products or services, how much they cost, how they are distributed, and how they are made known to the target market. The best way to do this is to go out there and see the competition yourself. Some entrepreneurs even go to the extent of buying the products or using the services of competitors. In this way, they are able to assess and differentiate their own and the competitor's product or service, determine the marketing needed, be ahead of the competition, and ride with the market trends. Price the product/service reasonably A product can have great features and benefits, but the price of the product can have a greater influence on how it will sell in the marketplace. Some people will pay a higher price for a particular product if it is of better quality and will perform better and last longer. For others, if the price of your product or service is higher than what the customers can afford or are willing to pay, chances are they will not patronize your business. Set your price, after considering all costs, at an affordable amount for your target market . Adopt a good product name for branding Will my product's name be remembered? When a name is different or unusual, it may attract attention, and perhaps arouse curiosity. Is it something that is interesting, such as one that is part of a rhyme or evokes humor? A good example is Jollibee. Consider a name that creates a mental picture of an image. Example: Red Ribbon provides an image that is easy to remember. Is it distinct enough from other names, to prevent people from confusing your product with another? If the name meaningful and fits with the product, it tends to generate higher recognition and recall. Put price tags All goods which are being sold must have a price tag. A price tag is a label to the price of an item being sold in a store. It is the amount of money a buyer pays in order to own the item. Placing a price tag on goods being sold have the following advantages: (1) The price of an item is readily available to a buyer; (2) It eliminates inconveniences on both the seller and the buyer as to process inquiry regarding the price of goods being sold; (3) A buyer can save time in choosing goods because he can easily pick out goods he can afford; and (4) The government can easily monitor stores that are selling goods at a higher price than the prices specified by the Price Control Council. Promote the products/services in various ways to increase sales Products or services of the firm need to be advertised in order to generate sales. The entrepreneur has to devise ways of making people know and want to buy their products. This phase of the business falls under sales promotion. Sales promotion may be accomplished through any of the following ways: ▪ Newspapers, radio, and other forms of media. Putting up advertisements in the newspapers and commercials on television and radio regarding a certain product.