Recognize a Potential Market (Module 2, Quarter 1)
1. Essentials in opportunity-seeking
Entrepreneurial mind frame
What it is: A habit of seeing setbacks as chances and focusing on solutions (optimistic, analytical).
Example: When a typhoon damages stalls in a wet market, an entrepreneur with the right mind frame
thinks “temporary stall covers + mobile payments = safer, faster reopening” instead of only seeing
losses.
Entrepreneurial heart flame (passion)
What it is: Passion and intrinsic motivation to work on something long-term.
Example: A baker who loves experimenting with healthy breads will persist through trial-and-error to
create a niche product (e.g., high-fiber pandesal) even if initial sales are slow.
Entrepreneurial gut game (intuition)
What it is: Informed intuition based on experience and pattern recognition.
Example: A sari-sari store owner senses customers will want ready-to-cook meals during an upcoming
town fiesta and stocks small-portion frozen meals ahead of competitors.
2. Sources of opportunities — deeper look + local examples
1. Changes in the environment (physical, societal, industry)
o Climate: High daytime temps → business idea: cold drinks / shaved ice with local flavors (e.g.,
sikwate + calamansi ice).
o Natural resources: An area with abundant coconut → coconut-based snacks, virgin coconut oil
production.
o Industry: Growing local tourism → souvenir production or homestays.
2. Technological discovery & advancement
o Example: Affordable portable solar panels → small rural businesses can offer phone charging
stations and solar-powered light rentals.
3. Government thrusts, programs, policies
o Example: A municipal ban on fireworks → develop affordable, safe LED light-wands or
community light shows as substitutes.
4. People’s interest (hobbies and preferences)
o Example: Social media trend for homemade jams → small cottage industry for fruit jam in
resealable pouches.
5. Past experiences / skills
o Example: Former textile worker starts a small tailoring business offering alterations and
customized school uniforms.
3. Breaking down a market need — practical method
1. Observe: Watch a market (store, plaza, school) for repeating problems (long lines, lack of seating,
product shortage).
2. Ask: Short interviews: “What’s your biggest annoyance here?” (2–3 questions).
3. Quantify: Estimate how many people are affected and how often (e.g., 200 students daily, 3
times/week).
4. Translate to solution: Turn problem → product/service. Example: Students queuing for photocopying
→ mobile photocopy cart near school gate.
4. Techniques: seeking, screening, seizing opportunities (step-by-step)
A. Seeking (how to find ideas)
Field observation: Spend 1–3 days in a target area; note recurring problems.
Trend scan: Check local notices, social media groups, barangay announcements.
Skill inventory: List your or your team’s top 5 skills. See which skills match observed problems.
Interview: Talk to 10 potential customers with 3 quick questions: pain point, current workaround,
willingness to pay.
B. Screening (narrowing down ideas)
Use a simple 3-criteria filter: Viability, Profitability, Customer fit. Score each idea 1–5.
Viability (Can it be done?) — inputs, permits, technology, skills
Profitability (Will it make money?) — markup, volume needed, break-even months
Customer fit (Do customers want it?) — indicated interest, price sensitivity
Keep top 2–3 ideas for testing.
C. Seizing (testing & launching)
Prototype: Make a low-cost trial version (sample product, limited pilot service).
Pilot sell: Sell to a small group (friends, neighbors, schoolmates). Collect feedback.
Iterate: Improve product based on feedback, adjust price.
Scale: If pilot is positive, plan costs, manpower, and a simple marketing push (posters, word of mouth).
5. Screening checklist — practical version
For each idea, answer Yes / No / ? and estimate numbers where possible.
1. Are raw materials available locally?
2. Is required equipment affordable (<P20,000 for micro start)?
3. Are permits needed? (municipal, sanitary)
4. Can unit price cover costs + 20% profit margin?
5. Would at least 20 customers buy weekly?
6. Can the idea be piloted within 2 weeks?
If most answers are Yes, idea passes initial screen.
6. Forces of Competition (Five Forces) — with concrete local examples
Buyers: If a barangay has many sari-sari stores, buyers (households) can demand lower prices. Example
mitigation: offer bundle discounts or loyalty cards.
Potential new entrants: Low startup cost (e.g., ukay-ukay stall) means many entrants; differentiate by
location or product curation.
Rivalry among existing firms: If three carinderias sell the same menu, rivalry is high — differentiate
via signature dish or better service.
Substitute products: If fresh fruit shakes cost more, customers may substitute with iced coffee;
consider combining offerings or competitive pricing.
Suppliers: If only one supplier sells fresh fish in the town, supplier power is high — contract
multisource suppliers or buy in coop.
7. Example mini case study — “Halo-Halo on demand” (from idea to chosen solution)
Local context: A city with hot dry season, many students and vendors.
Observed problem: Long lines at popular halo-halo stalls; customers unwilling to wait during class breaks.
Ideas generated:
A. Pre-pack halo-halo cups (grab-and-go)
B. Halo-halo delivery via student riders
C. Halo-halo vending pushcart with faster assembly
Screening (short)
A: Viable, needs cold storage; profitable if sold 50/day.
B: Needs riders and packaging; delivery fees may deter small orders.
C: Needs mobile freezer, moderate capital.
Pilot chosen: A (pre-pack cups) — low capital, easy to test at school gate.
Pilot results: Sold 40 cups/day, feedback: want more ube and less lecheflan.
Decision: Adjust recipe, scale to 80 cups/day, set price for 25% margin.
This shows how observation → multiple ideas → screening → pilot → iterate → scale.
8. Sample completed Activity 3 table (Substitute products)
Substitute
No. Primary Product Characteristics / Use (difference)
Product
Butter: richer, higher price; Margarine: cheaper, similar spread for
Ex. Butter Margarine
breads
UHT powdered Fresh: perishable, needs cold storage; UHT: longer shelf life,
1 Fresh milk
milk cheaper logistics
Water station Bottled: convenience, higher per-L cost; Refill: cheaper per L, needs
2 Bottled water
(refill) refill container
Wooden school Foldable plastic
3 Wooden: heavy, durable; Plastic: lightweight, cheaper, portable
desk desk
Fresh: higher quality for taste; Frozen: longer shelf life, easier
4 Fresh fish Frozen fish fillet
stocking
Tinola: hot, made-to-order; Instant: quick, less nutritious but
5 Local tinola Instant soup packs
cheaper/time saver
9. Sample answers to Post-Assessment (quick guide)
1. A — Opportunity-seeking.
2. A — Entrepreneurial mind frame.
3. B — Entrepreneurial gut game.
4. C — Entrepreneurial heart flame.
5. A — Economic forces.
6. C — A and D (preferences change; product differentiation).
7. D — B and C (buyer backward integration; low switching cost reduce threats).
8. A — Buyers.
9. D — The product represents a high percentage of buyer’s cost (is not a factor in rivalry list).
10. D — Needs and Wants (not a force).
11. C — People’s interest.
12. D — Natural resources (physical environment, not societal).
13. B — Opening of entrepreneurial venture.
14. B — Technological discovery and advancement.
15. B — Past experiences.
(These align with the module’s answer key; use for quick grading.)
10. Additional classroom/home activities (ready to use)
1. Market walk & 5-question interview — Students visit a market and ask 5 people: what is your top 1
daily problem here? Did they currently pay for a solution? Would they pay ₱20 for a fix? Report
findings in class.
2. Mini-pilot challenge — In groups, design and sell a simple product (max capital ₱500) for one week.
Track costs, sales, feedback, then present learnings.
3. SWOT for an idea — Pick one idea and make a one-page SWOT (Strengths, Weaknesses,
Opportunities, Threats). Present to class for 5 minutes.
11. Rubric for screening ideas (simple, teacher-friendly)
Score each criterion 1–5 (1 low, 5 high). Add total (max 25).
Market demand (1–5)
Ease of production / skills needed (1–5)
Startup cost (1–5; higher score = lower cost)
Profit margin potential (1–5)
Legal / permit complexity (1–5; higher = easier)
Total ≥ 18 → strong candidate; 13–17 → revise and test; ≤12 → reconsider.
12. Short glossary (student friendly)
Opportunity seeking — Looking for business chances in daily life.
Prototype — A basic version of the product to test with customers.
Pilot — Small-scale trial sell to check market reaction.
Substitute — A product that can replace another (margarine vs butter).
13. Quick teacher tips
Use local examples (barangay festivals, school canteens) to make lessons immediate.
Let students lead the market walks but require a 1-page report (Findings + one recommendation).
Emphasize cheap tests (surveys, small sample sales) — many ideas are validated with ₱50–₱500.
14. Closing — how to use this extension
Insert the case study, checklists, rubric, and activities into the “What’s More”, “What I Can Do”, or
“Additional Activities” sections of the module.
Use the screening checklist and rubric to help students pick 1–2 ideas for their Business Plan later in the
course.