Environment and Market

People who aspire to start a business need to explore the economic, cultural and social conditions prevailing in an area. Needs and wants of the people in a certain area that are not met may be considered as business opportunities. Identifying the needs of the community, its resources, available raw materials, skills, and appropriate technology can help a new entrepreneur in seizing a business opportunity.

Look for the development of new technologies, and other external factors such as government policies, climate, trends, as well as legal and other constraints.

Now that you have read some important considerations to consider to be successful in any business, you are ready to explore more about the environment and market.

· PRODUCTS & SERVICES AVAILABLE IN THE MARKET

There are many products and services available in your community.It ranges from home use to commercial products.

Products:

Aircondition

Freezers

Refrigerators

Coolers

Icecream maker Machine

Water dispenser

Softdrink dispenser

Services:

Companies that repair and maintain mechanical systems. Including repair and maintenance of system components, sale and installation of replacement components for economic and efficient system operation.

Contractors:

Companies that sell and instaIl mechanical systems.Includes Installation and fabrication or system components, preparation of drawings, estimalion of cost, and supervision of installation according to specifications.

Some people who work in air-conditioning and refrigeration fields include cooling contractors who employ mechanics who work in food chains, school systems, manufacturers, as well as other organizations that utilize the services of air-conditioning and refrigeration technicians.

Large air-conditioning systems use many mechanics to keep the equipment operational. However, not all mechanics work for other people. About one in every seven mechanics is self-employed.

Manufacturers:

Companies that Purchase raw material or components and fabricate or assemble into equipment for sale.Includes sales and marketing, production, design,and research development.

Manufacturers use refrigeration equipment for a variety of processes. Meat packers and chemical makers use refrigeration in some form.

Here are some of the jobs that you can take when you finish Refrigeartion and airconditioning.

CUSTOMERS AND THEIR BUYING HABITS

Many factors, specificities and characteristics influence the individual in what he is and the consumer in his decision making process, shopping habits, purchasing behaviour, the brands he buys or the retailers he goes. A purchase decision is the result of each and every one of these factors.

An individual and a consumer is led by his culture, his subculture, his social class, his membership groups, his family, his personality, his psychological factors, etc.. and is influenced by cultural trends as well as his social and societal environment.By identifying and understanding the factors that influence their customers, brands have the opportunity to develop a strategy, a marketing message (Unique Value Proposition) and advertising campaigns more efficient and more in line with the needs and ways of thinking of their target consumers, a real asset to better meet the needs of its customers and increase sales.

Consumer s buyer behaviour is influenced by four major factors:

1) Cultural

2) Social

3) Personal

4) Psychological

As well as :

COMPETITION IN THE MARKET

Competition in the marketplace means having a market where there are multiple businesses offering competing products and services.

Competition makes the market more efficient, and will translate into competitive prices for goods and services. Competition spurs businesses to be more productive, innovative and responsive in order to compete for consumers

Importance of Market Competition

Consumers win with competition -when a market is competitive, businesses will have greater incentives to lower prices, to improve the quality of their products and services, and to provide buyers with more options. That is, businesses will need to innovate to make their products different and better than the rest.

Competition helps the poor - markets with enough competition benefit the poor directly.

A competitive market can provide goods and services at the lowest possible price, with a wide array of choices, and in an environment where innovation can thrive. This means that the poor can afford more with their income. Even if their incomes do not increase, their well-being can still improve. It can mean the difference between a family being hungry because food prices are too high, or being food secure because prices are low, stable, and predictable.

Small entrepreneurs such as farmers and retail store owners will be protected from unfair or predatory practices of bigger businesses. A farmer can buy inputs like fertilizer and equipment at fair prices, allowing them to sell their products on fair terms, as well.

Competition drives firms to use their inputs in the most efficient way in order to supply goods and services at the lowest possible costs. Competition will drive inefficient companies out of business and allow efficient companies to enter markets and/or gain market share. Hence, competition replaces inefficient with efficient production.

Competition drives companies to innovate and create new products and services to gain market share. Hence, competition leads to technological progress.

DIFFERENTIATION OF PRODUCTS AND SERVICES

Product/Service differentiation is a market strategy that businesses use to distinguish a product/service from similar offering on the market.

Characteristics of Product differentiation:

Price- competitive price

Form- many products can be differentiated in the form, size, shape, or physical structure of the products.

Features- products can be offered with varying features that supplements the basic functions.

Customization- marketers can differentiate the products by customizing them for different users

Performance quality- Performance quality is the level at which the products primary feature operate.

Durability - is the measure of products operating life.

Reliability- It is the measure of the probability that the product will function without failure within a given span of time.

Style- Describes the product and feeling to buyer.

Characteristics of service differentiation.

Ordering ease- Ordering ease refers to how easy it is for you to place an order with the company.

Delivery- Delivery refers how well the product or service is delivered to the customer, covering speed, accuracy and customer care.

Installation- Installation refers to the work done to make a product operational in its planned location.

Customer training- refers to how the customer’s employees are trained to use the vendor’s equipment properly and efficiently.

Maintenance and repair- Maintenance and repair program helps customers

keep purchasing products in good working order, an important consideration for many products.

SWOT Analysis

In generating a business idea, you should first identify the type of business suited to your business idea. You should analyze and scan the potential environment, study the marketing practices and strategies of your competitors, analyze strengths, weaknesses, opportunities, and threats in your environment to ensure that the products or services you are planning to offer will be patronized and within easy reach of target consumers.

SWOT is a strategic planning method you can use to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project, organization, or in a business venture.

Strengths are aspects or characteristics of the business, or project teams that give it an advantage over others;

Weaknesses are aspects or characteristics that place the organization at a disadvantage relative to others;

Opportunities are internal and external prospects that can improve organization’s performance within the context;

Threats are internal and external influencing factors in the environment that could cause trouble for the function or project.

SWOT focuses on internal and external factors.

- Internal factors may include: Personnel, finance, fundraising capabilities, and group and individual performance, etc.

- External factors may include: Economic climate, technological changes, legislation, social culture changes, competitors, etc.

· SWOT can be used in business corporations, governmental departments, and nonprofit organizations.

· SWOT can be performed for business planning, strategic planning, competi-tor evaluation, marketing development, and research reports.

How to conduct SWOT Analysis:

· Be realistic about the strengths and weaknesses of your business when conducting SWOT Analysis.

· SWOT Analysis should distinguish between where your business is today, and where it can be in the future.

· SWOT Analysis should always be specific. Avoid any grey areas.

· Always apply SWOT Analysis in relation to your competition, example better than or worse than your competition.

· Identify your areas for improvement, development and growth in RAC.

· Develop and strengthen your Environment and Market analysis in Refrigeration and Airconditioning

Evaluation : Multiple Choice Test

1. The following are examples of people's basic needs, except

A. Recreation

B. Clothing

C. Shelter

D. Food

2. Which of the following should be considered first by a prospective entrepreneur

in choosing the right location for his/her store?

A. Type of merchandise

B. The access of the target customers

C. The attractiveness of the store layout

D. Conduct SWOT analysis

3. The plans to put a ''digi-print'' studio in their locality.

Which of the followng will help determine his plan for a success setting up his business?

A. Surver of cunsumer associations

B. Checking for similar business to avoid competition

C. Getting feedback on the quality of service

D. Conduct a SWOT analysis

4. Caesar studies the population in his immediate community. He is doing this to________ ?

A. Identify his would be '' SUKI ''

B. Predict his biggest buyer.

C. Select his favorite costumers.

D. Determine whom to sell this product or service.

5. When an entrepreneur improves and alter products

to make it more appealing to target consumers, he/she is doing an _________ of the product.

A.Alteration

B.Invention

C.Innovation

D.Improvisation

Key Points:

· PEC -Personal Enrprenuerial Competencies- refers to the important characteristics that should be possessed by an individual in order to perform entrepreneurial functions effectively.

· SWOT Analysis- is a strategic planning method you can use to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project, organization, or in a business venture.

· As a person which has a skill in DOMRAC he or she must be compitent in the following Personal Entrepreneurial Competencies (PECs) such as : Opportunity Seeking, Persistence, Commited to Work , Risk-taker, Efficient and Effective, Pro active, Information Seeker, and able to systematically plan.

· In putting up a business, you should first identify the type of business that is suited for you, then do a SWOT analysis (Strength, Weaknesses, Oppurtunities, and Treats Analysis).

· The best way to develop a business in RAC is to have a systematic approach in generating and selecting a business idea that can be transformed into a real business.Examine the needs and wants of your customer and know how to market your product .