Question

“One of the components of a business plan effectively establishes how the entrepreneur will compete and operate in the marketplace. It acts as a guideline regarding the marketing objectives, strategies, and activities to be followed by any new enterprise.”

1. Identify the component of the business plan discussed above.
2. Explain the steps described in the plan that help an entrepreneur find the group of customers whose needs the enterprise aims to fulfil.

Answer 1

1. Marketing plan
2. There are several steps involved in identifying the "target market":
   
   1. Deciding what the entrepreneur wishes to pursue is based on market research or industry analysis done and complied with by competent people or the entrepreneurs.
   2. Divide the market into smaller groups based on the following criteria:
      
      1. The characteristics of the consumer include their geographic location (state, country, etc.). In addition to demographic characteristics such as sex and age, psychographics also encompass aspects such as personality and lifestyle.
      2. Buying situations, viz., buying conditions (time available, etc.), usage, and desired benefits (features of the product).