A-LEVEL ENTREPRENEURSHIP EDUCATION SKILLS

P230/3

INTRODUCTION TO ENTREPRENEURSHIP:

This paper shall test practical skills gained by the learner from the classroom, school
business club and the real business environment. The paper shall be a three- hour exam
consisting of five questions divided in the following three sections:

SECTION A.

This is a compulsory section on a Case Study consisting of 25 marks.

SECTION B.

This section shall be School Business Clubs comprising of two questions each constituting 25
marks.

SECTION C.

This section shall be on field trips and field attachment. There shall be one question on field
attachment and another question on field trip each constituting 25 marks.

A candidate shall be required to answer 4 questions in total, i.e one question from section A, two
question from either section B or C and one question from either section B or C.

GENERAL GUIDELINES FOR ANSWERING PAPER THREE.

This paper will test the practical skills of a candidate and the following are the guidelines.

• Ensure that each answer given is well defended by relevant reasons, examples/proof.
• For section A, a candidate shall support points given with examples from the story given.
• Keep referring to the questions when reading each paragraph of the case study so as to
identify evidence for defending the points unless giving your own opinion.
• For section B, a candidate shall ensure that all points given are specific to the club project
by giving specific evidence.
 • For field trip and field attachment, a candidate shall ensure that all points given have
proof that a specific business was visited or a candidate was attached to a specific
business except for opinion answers.
• Also for field trip, a candidate shall start by specifying whether he/she did a field trip as
an individual or as a group and then go ahead to give the details of the business visited.

INTRODUCTION TO SECTION A; CASE STUDY.

A cases study in Entrepreneurship Education refers to an organized written information relating

to an entrepreneurial situation describing a given business/entrepreneur’s decision.

Reasons for studying a case study.

• To help learners gain confidence in decision making

• To help learners gain theoretical skills by stimulating them to think critically.
• To help learners to discover how to identify a problem and develop problem solving
skills.
• To help change learners’ attitudes to be possibility thinkers.
• To promote team work among the learners.
• To enable learners to identify role models and mentors to help develop their career
decisions.

INTRODUCTION TO SECTION B: SCHOOL BUSINESS CLUBS.

A school business club is an association of school students who subscribe money/pay

membership fees and also contribute capital to establish and operate a business in which they
earn income.

Reasons for forming a school business club.

• To enable all club members to gain practical skills or experience for operating a business.
 • To inspire all the club members to succeed in a global economy.
• To make profits of above 10% on the cost for the products sold.
• To produce and provide high quality products every term to the school community.
• To help all club members to develop entrepreneurial competences.
• To help the learners to become team players.
• To help all the learners to apply the knowledge, skills and attitudes learnt in class, field
attachment and field trips in running the school business club.

INTRODUCTION TO SECTION C: FIELD TRIPS.

A field trip refers to a guided tour or journey by entrepreneurship students/business club

members usually during a given school term to selected businesses to learn about the real
business operations and environment so as to supplement classroom knowledge.

Objectives of field trips.

• To introduce learners to field research.

• To relate knowledge and skills acquired in class and a real business environment i.e to
expose the learners.
• To know what takes place in businesses.
• To enable learners to learn and develop new skills that in real businesses.

FIELD ATTACHMENT.

This is a practical training experience obtained or gained by a student in a real business to enable
him or her get practical experience in a wide range of actual business activities or situations or
environment. It gives a student an opportunity to apply what was learnt in classroom, business
club activities in the real business under the supervision of experienced business owners and
their workers.

Objectives/purpose of field attachment.

• To enable students to learn, develop and apply new skills that are appropriate in which
they would be working in.
 • To enable the students to apply the knowledge and skills acquired in class to the real
business environment.
• To help the learners to develop and refine their common skills and business ethics
required for working in a business.
• To help learners to develop and apply entrepreneurial skills in the real business setting.
• To enable students to identify role models and mentors to help them achieve their vision
or pursue their careers.
• To enable students to be able to choose whether to go for paid or self- employment.
• To instill confidence in the learners to be able to fit in the real work environment.

Factors to consider when looking for a business to do field attachment.

• Personal interest
• Location or accessibility.
• Working conditions in the business
• Family bias or influence.
• Special training for new staff
• The nature of the business ie recommended businesses.

Types of businesses that a student should not be attached to;

• Gambling businesses.
• Businesses dealing in traditional medicine practices or shrine related activities.
• Businesses related to pornography.
• Businesses that operate at night.
• Businesses that require hard labour like brick laying, carrying heavy loads, mining etc.
• Illegal businesses e.g marijuana, opium.
• Businesses dealing in hazardous substances like acids, chemicals.

Personal requirements during field attachment.

• A small work bag for carrying writing materials and other personal items.
 • Descent clothes for going for field attachment.
• Appropriate foot wear most probably closed shoes.
• A watch to help in time management.
• Pocket money or packed food in case the business does not provide meals.
• Note book for recording useful information.

INFORMATION TO BE LOOKED OUT FOR DURING;

• Business club project

• Field attachment
• Field trips.

1. Background of the business.

Location of the business; region, district, road or plot number

Date of establishment.

Nature of the business e.g sole proprietorship, partnership or company.

Vision statement.

Mission statement.

Goals and objectives.

Goods and services offered.

Economic, social activities surrounding the business.

Nature of customers or clients/ customers’ profile

Sources of funding for the business.

Social problems in the area.

Description of the premises and assets of the business.

2. Routine activities that take place in the business.

3. SWOT analysis of the business.

This refers to identifying the strengths, weaknesses, opportunities and threats of the business
for better decision making. It is a tool used by entrepreneurs to identify internal and external
factors that influence its overall performance.

Strengths

These are the favorable internal factors that a business able to perform better than its rivals.
They include; strategic location, skilled workers, sufficient working capital, good customer care,
advanced technology, efficient management, supportive infrastructure, motivated staff.

Weaknesses

These are internal factors within a business that hinder good performance. They include;
limited funds, inexperienced staff, poor technology, poor quality products, poor customer care.

Opportunities.

These are external factors that a business can use/take advantage of in order to perform better.
They include: A growing market, government support, introduction of modern machines,
increasing population, reduction in poverty levels, International and national events, reduction in
interest rates, favorable consumer tastes and preferences. Possibility of securing big orders,
political stability, exit of rival firms.

Threats

These are external factors that make it difficult for a business to perform well. They include:
entry of a strong competitor into the market, inadequate supply of power and water, insecurity,
unfavourable government policies, economic depression, depletion of resources, political
instability.
 NOTE: SWOT analysis can be used by an entrepreneurship club to research a business idea,
to establish whether the proposed business will successfully enter the current market.

SWOT analysis can also be conducted even if one existing/operating business, a group of
business in the industry and for the business club project.

Types of SWOT analysis.

There are two types of SWOT analysis;

(a) SWOT analysis for a single business.

Title of the business.

Factor Strengths Weaknesses

Internal

External Opportunities Threats

Prepared by:

Signature……………………………..

Name…………………………………

Title…………………………………..

(b) Industry/ market SWOT analysis.

Business/Respondents Strengths Weaknesses Opportunities Threats
Own business
Competitor No. 1

Competitor No. 2

Prepared by
Signature…………………………
Name………………………………
Title………………………………
• Production structure and production lay out.
• Management/organizational structure.
• Production layout.

An organization structure of a school business club.

SHAREHOLDERS

CLUB PRESIDENT

VICE PRESIDENT

TREASURER SECRETARY MOBILISER PROD. MNG MRKT MNG

 ASS. ASS. ASS. ASS.
ASS.

OTHER CLUB MEMBERS

DUTIES AND RESPONSIBILITIES OF:

CLUB PRESIDENT.

• Overseeing all club activities and providing leadership for the club.
• Planning for all the club meetings and presiding over them.
• Endorsing all club documents like letters, reports, minutes of the meetings, financial
statements, project proposals etc.
• Initiating club development plans.
• Linking the school business club to other business clubs in the region.
• Coordinating all club activities to school administration.

CLUB VICE PRESIDENT

• Shall assist and deputise or perform all the functions of the president in absence of the
president or when delegated to do so.

CLUB SECRETARY.

• Summarising and attending all general and committee meetings of the club.
• Recording/taking minutes of the club meetings
• Making reports of club activities and events.
• Preparing and sending out relevant documents to specific groups; circulars, notices and
other documents.
 • Reminding the president of important issues before the start of meetings.
• Reading minutes of the previous meetings.
• Organising for any refreshments during meetings.
• Ensuring that all attendance registers are signed by all members who attend the meetings.
• Acting as the chairperson in absence of the club president and vice president.

CLUB TREASURER.

• Attending all club meetings.

• Collecting and receiving all money paid to the club.
• Preparing relevant books of accounts for the year ended.
• Making recommended payments.
• Keeping an up-to-date record of all paid up members and those who have not paid up
their membership fees.
• Being a co-signatory to all financial transactions of the club accounts.

CLUB MOBILISER.

• Mobilising club members for club activities.

• Organising and planning for days when the club shall hold meetings.
• Making all the necessary arrangements for the club meetings e.g organizing the room for
the meeting.
• Reminding of the club members to take part in club activities.

PRODUCTION LAYOUT OF THE BUSINESS.

It should contain the following.

Name and address of the business.

Name of the document

Frame around the plant layout.

Entrance to the business.

Security section.

Parking yard.

Administration block.

Receiving section.

Production section/department.

Dispatch section.

Maintenance of machinery and equipment.

Stores and ware houses.

Workers’ changing room/section.

Health facility/first aid box.

Toilets and bathrooms.

Water source.

Power/generator section.

Waste disposal section.

Dining hall/canteen.

STAFF WELFARE

This is concerned with working conditions of the employees. They include:

• Quality of meals, type,

• Uniform; type, shape, colour, design, for male and female.
• Accommodation; houses/allowances
• Staff development; trainings, seminars, workshops, and sponsorships.
• Health and safety; sickbay, first aid room, ambulances, protective gear, and health
insurance.
4. Information related to the topic; introduction to entrepreneurship education:

- Advantages/ benefits of the business.

- Disadvantages of being an entrepreneur/self- employment.

- Costs or challenges of being an entrepreneur.

- Entrepreneurial characteristics observed by the business owner(s)

- Competencies required for successful entrepreneurship identified or missing in the business.

5. Entrepreneurial motivation e.g achievement motivation characteristics, benefits and

challenges of motivation, factors that hinder entrepreneurial motivation and factors that help
develop positive mental

Attitude.

6. Business ethics or missing practices.

7. Business idea generation and opportunities e.g how the business idea was generated, reasons
for why

The business is a good business idea (viable).

8. Entrepreneurial skills experiences i.e change, creativity and innovation.

9. Risk management and insurance information i.e security and safety measures, procedures for
managing risks.

10. Negotiation practices e.g negotiation principles, challenges, preparation for negotiation and
tactics.

11. Communication skills e.g forms of communication, communication process, importance of

effective communication.

12. Entrepreneurial environment.

13. Social entrepreneurship i.e characteristics of social entrepreneurs, advantages of social

enterprises.
14. Small and medium enterprises i.e role played, advantages, factors for success, challenges and
suggested solutions.

15. Gender and entrepreneurship i.e how the business ensures gender equality.

16. Business plan preparation or business planning skills acquired.

17. Personnel management practices i.e organizational structure, routine responsibilities,

motivation, disciplinary measures, appraisals, retention

18. Purchasing management skills. i.e procurement procedure, documents used, inventory
management.

19. Production management skills. i.e production process layout, production decisions,
production process, machinery, tools and equipment, quality management, waste disposal,
packaging and product branding.

20. Marketing management skills. i.e objectives of market research, marketing strategies,
customer care practices.

21. Sales promotion information e.g objectives of sales promotion, sales promotion strategies,
marketing flow charts and channels of distribution.

22. Financial management e.g source documents, cash flow management, bbooks of accounts
kept by the business.

23. Business competition. Measures used to outcompete rivals, effects of business competition.

FIELD ATTACHMENT/VISIT EXPERIENCE.

The following are the skills acquired from a school business club, field attachment and field trip.

• Routine activities and responsibilities.

• Risk management skills
• Communication skills
• Business idea generation skills
• Skills of writing a Business plan
 • Negotiation skills
• Marketing skills
• Innovation and creativity skills
• Financial management skills
• Purchasing skills
• Record keeping skills
• Packaging and branding skills
• Production skills
• Time management skills.
• Skills of handling business competition.

CHALLENGES FACED BY STUDENTS DURING FIELD ATTACHMENT.

The challenge of learning how to use machinery, tools and equipment.

The challenge of how to work with older and experienced workers.

The challenge of meeting work targets or deadlines or coping with work place pressures.

The challenge of following business work rules and regulations.

The challenge of moving to work place and place of residence.

The challenge of communicating with business workers, supervisors and the business owner(s).

The challenge of handling customers.

The challenge of dealing with unfavorable weather conditions e.g extreme coldness, heat.

The challenge of translating academic knowledge into practical work or hands on practice.

The challenge of managing work place stress and fatigue.

The challenge of managing daily cash inflows and cash outflows.

The challenges of obtaining food and drinks at the work place.

The challenge of preparing daily or weekly performance reports.

The challenge of sourcing for raw materials.

The challenge of inadequate supply of machines, tools and equipment

ROUTINE ACTIVITIES AND RESPONSIBILITIES THAT TAKE PLACE IN THE

BUSINESS.

Routine activities are fixed and regular tasks that are performed in the business by specific
workers.

Businesses perform different types of routine activities / functions during their operations; some
of them include the following:

Production activities or processes.

These are activities performed in the business starting from identifying the needs of customers to
making the produced products reach the final consumer.

Production activities in a business are supervised by the production manager. The production
activities include the following:

Conducting market research to identify the customers’ needs, their location and characteristics.

Developing a product idea to come up with a product or products that meet the identified needs.

Converting a business idea into a product design.

Sourcing or purchasing or acquiring the necessary raw materials for making the designed product
and other needed production items.

Carrying out actual production of the product while observing se quality standard.

Packaging of the finished product produced.

Branding of the finished product.

Advertising and promotion of the finished products.

Storing of the products to ensure their safety.

Distributing of the products to the target customers.

Making a follow up with the customers to find out the product is performing in the market.

Making any needed improvement on the product so that it provides better satisfaction to the
customers and also make it have a competitive advantage over the rival ones.

Documenting of information related to the production i.e work order forms, work schedule, stock
cards

Carrying out servicing and maintenance work on production facilities.

Note: Production activities vary from one type of business to another.

Marketing activities:

These involve activities of identifying, anticipating and satisfying customers’ needs effectively
and profitably. Activities performed by the manufacturers right from the stage of identifying the
customers’ needs to the services rendered after the sale of goods or services.

Marketing activities are usually supervised by the Marketing/sales manager. They include the
following:

Conducting market research to identify customers’ needs and to know who they are.

Developing and producing the product in collaboration with the production department.

Pricing of the product at attractive prices so as to attract buyers.

Promotion of the product through advertising, salesmanship, and use of other sales promotion
strategies.

Practicing good customer care so as to attract new customers and retain old ones by being
honest, polite and responsible.

Providing appropriate after sales services like packing for customers, giving advice on how to
store and maintain the product.
Maintaining good public relations with customers in order to improve the brand image as well as
the business image.

Documenting of information related to marketing such as marketing budget, market survey guide
and distribution schedule.

Financial Management activities:

This is the management of finance of the business in order to achieve the set financial objectives.

Financial management involves all the routine activities which are performed within the
organization to ensure availability and efficient use of funds. Financial management is
supervised by the Finance/Chief Accountant/Financial Controller. Financial management
activities include the following:

Supervising and monitoring daily cash receipts and cash payments made by the business.

Banking periodically of surplus cash balances.

Ensuring proper record keeping of all the financial transactions that are undertaken by the
business.

Conducting proper financial planning to that there is adequate funding to meet the needs of the
business and for proper budgeting.

Ensuring efficient financial control in order to ensure efficient use of assets and safety of assets.

Participating in financial decision making such as investment decisions, financing and dividends.

Personnel management activities:

These are activities that involve planning, monitoring, controlling and administering personnel. It
involves recruitment, training, motivation, appraisal and retention in the production process.
Managing personnel in a business is the responsibility of the Personnel Manager/Human
Resource Manager. Personnel management activities include the following:

Identifying the human resource needs of the business and planning for recruitment.
Recruiting the required labour.

Conducting job induction and training for the recruited workers.

Placing workers in the right jobs basing on factors like qualifications, work experience, skills.

Allocating duties and responsibilities to the workers.

Monitoring of the workers as they perform their duties and also ensuring their discipline at the
work place.

Planning and organizing staff training and development

Motivating workers through promoting them objectively and involving them in decision making.

Appraising and reviewing workers’ performances or evaluating the performances of the workers.

Remunerating workers appropriately basing on qualification, performance and other factors.

Organizing the termination, retirement and transfer of workers.

Documenting all information related to managing workers e.g workers’ schedules.

Communication or practicing effective communication.

Communication refers to the sending/ giving, receiving, understanding and responding to

information received. Communication is a two- way process and it involves all workers.
Communication activities in a business include the following:

Giving oral instructions to workers to help them perform their duties well.

Receiving information from customers through face to face talk, telephone calls and negotiation.

Preparing and issuing or sending written communication such as business letters, memos, notices
and Circulars.

Presenting information to the receivers using diagrams, charts, graphs and pictures.

Conducting meetings in the business for workers, suppliers and other stakeholders.

Presenting products for sale to the customers.

Bargaining with customers and suppliers to reach an agreement.

Conducting training for new and old workers.

Maintaining cleanliness:

This involves all activities carried out in the business to ensure a clean work environment or
hygiene. The cleanliness routine activities include the following:

Sweeping of the business compound, rooms and other working point.

Washing and mopping of the floor of the business buildings.

Slashing or mowing of the compound grass and trimming of flowers and trees.

Collecting rubbish or waste and burning them or recycling them.

Washing of business sauce pans, plates, cups, cutlery and other food equipment.

Cleaning of business furniture, work tools, equipment and machinery and windows.

Spraying or fumigating rooms, flowers, trees and dust bins to kill harmful insects.

Washing and cleaning business motor vehicles, motorcycles and bicycles.

Washing of work protective wear like gloves, overalls, gumboots and ironing of clothes.

Washing of toilets and bathrooms daily with detergents.

Bathing of business workers to maintain personal hygiene.

Administrative activities:

These are activities performed by management of the business to ensure smooth operation of the
business. These activities include;

Planning: This involves setting goals and objectives of the business, determining the appropriate
course of action for achieving each goal and objective; and developing strategies for
implementing the selected course of action.
Organizing: This involves identifying the various activities to be done in the business, grouping
them into sections or departments and assigning individuals or workers to perform the activities.

Leading: This involves motivating and guiding the workers on the procedures and methods of
work in the business through proper communication, involving them in decision making and
leading by example.

Controlling: This involves setting standards of performance for the various activities, checking
to see how workers’ actual performance matches with the set standards and then taking
corrective action as needed.

Staffing: This is the process by which the managers in a business train, promote and retire their
subordinates.

Welfare activities:

This is concerned with working conditions of the employees. They include;

Quality of meals, type and time.

Staff development i.e. training, seminars, workshops and sponsorships.

Preparing foods and drinks for the workers.

Serving the foods and drinks to the workers.

Providing treatment to the sick workers.

Facilitating the treatment of workers.

Giving workers sick leave.

Paying the workers on time as agreed.

Maintenance of assets.

Servicing of tools, equipment and machines regularly.

Repairing of furniture.

Renovation of buildings.

Painting of production assets.

Lubricating of machines.

Security and safety activities:

Guarding the business premises by qualified security personnel.

Checking all vehicle entering and leaving the business premises.

Searching all people and workers entering and leaving the business premises.

Switching on security lights at night.

Patrolling the business premises.

Ensuring that the CCTV cameras are operating well.

GENERATION OF BUSINESS IDEAS AND SELECTION OF A GOOD BUSINESS

OPPORTUNITY.

A business idea is a response of a person or entrepreneur/organization to solve an identified

problem or meeting identified needs of the environment.

A business opportunity is an attractive investment idea that provides the possibility of monetary
returns or profit for the person or group taking the risk.

Reasons for generating business ideas.

• To ascertain whether the business can be started and survive in the competitive market.
• To respond to market demands by identifying goods and services needed by customers in
the current market.
• To respond to national threats and scarcities e.g. drought, famine, diseases.
 • To match changing fashions and requirements, respond to current customer demands with
new ideas, products or services.
• To stay ahead of current competition by offering new ideas, products or services that can
match competition.
• To select appropriate technology to produce better products and attract more customers.
• To start a project that can help a specific group of people e.g. students.
• To plan for new products and their growth given that all products have an end life.
• To spread risks and allow for product failures that is about 80% by generating new ideas
from time to time.

Sources of business ideas.

There are many sources that can be used by club members to search for business ideas and some
of them include the following;

• The press. This includes newspapers and magazines. In the newspapers look out for
classified adverts section where there are a number of messages grouped together.
• Hobbies and interests. These are activities performed for pleasure and relaxation and they
can form sources of business ideas. E.g. dancing, singing, playing football.
• Business and vocational or acquired skills and experiences. Club members can develop
business ideas from areas where one or more members have undergone training e.g.
photography, soap making, craft making.
• Survey. This is done by finding out what customers want through conducting informal
surveys e.g. asking or observing activities or formal surveys through questionnaire.
• Media. Club members can also watch TVs and identify business ideas then respond by
supplying products needed by customers.
• Internet. Searching through the internet can help club members identify business ideas
appropriate to the school environment.
• Franchise. It is a special right given by a manufacturer to the business to sell goods or
services of a manufacturer. A business club can sign a contract with the producer to sell
the producer’s products.
 • Brainstorming. This is a technique used to solve problems by generating as many
business ideas as possible and then choosing the most appropriate that solves the
problem.
• Trade fairs and exhibitions.
• Available raw materials.
• Successful entrepreneurs.

Guidelines to be followed during group brainstorming when generating business ideas.

- The club members selected a leader to take control of the brainstorming exercise when
generating business ideas.
- Club members’ ideas were not to be criticized by other members in order to allow the
members to freely give their business ideas.
- Each club member’s business idea was properly recorded down by a secretary as the
ideas keep flowing from the other members.
- The club members were encouraged to come up with a wide range of business ideas in
order to build a wide range of business opportunities.

. The business ideas recorded, were carefully studied, evaluated and even modified where
necessary so as to improve creative thinking by the members.

- The club members finally identified one or more business ideas that were profitable and
could be turned into club projects.

Generating business ideas from the environment.

• By taking notes of the obvious problems that the club members encounter in everyday
life and turning these identified problems into business ideas.
• By club members looking at their personal interests and then recording these ideas basing
on interests.
• By scanning the daily newspapers to search for and identify school business ideas.
• By listening to people’s talks and observing what goes around so as to identify business
ideas.
• By travelling and talking to different people.
 • Through brainstorming.
• Steps/procedure for search of business ideas.
• Idea stage. This is done by identifying a business idea from one or more listed ideas and
then gathering related information from the business idea e.g. newspapers, internet, so as
to assess the viability of the idea.
• Analyzing the business idea. This is by looking at it from four perspectives i.e. the
business or company for product potential and benefits, customers for their needs to be
met, competitors i.e. identifying their SWOT and collaborators who want the idea to
succeed.
• Checking out the competition. This is by identifying the major competitors, talking to
their customers and asking the customer’s opinion about the rivals so as to plan on how to
do better than them.
• Fine turning/re-organising the idea. This is by doing more research about the business
idea to make it fresh and to see how it can be modified to succeed.
• Going ahead with the business idea. When the business idea is ready to be started, one
key factor is the pricing. The business idea that has a chance of succeeding should have a
budget prepared for the implementation of the idea.

Evaluation of different business ideas.

When evaluating and comparing different business ideas, the following ideas are considered:

• Present/current market.
• Cost for implementing the business idea.
• Business risks.
• Potential market growth.

Evaluating business ideas basing on present market.

When analyzing the present market of the business, the following factors are considered:

- Market size. The club members discovered that there was is still a big market for the
products in and around the school which led to the establishment of the project. For
example 1700 students, 100 teachers and 200 non-teaching staff.
- Products in relation to needs. The club members through research found out that the
products being produced and sold satisfied the needs of all groups of customers such as
students, teachers and non-teaching staff. Through an interview carried out in form one
which is the biggest class of 500 students, 300 of them were interested in buying the
product.
- The strength and dominance of competitors. The club members found out that the
products sold in school were few and of poor quality/sub-standard, therefore they set up
the project.
- Sales effort required. Through research, the club members discovered that it required few
members to market the products and this made the project a viable business.
- The relationship between quality and price of the product. The club members’ research
showed that the existing products were of low quality yet expensive. This made the
club’s idea of making and selling high quality products viable.
- Service requirements. The club members found out that the idea was viable because it
mainly needed the service of packaging of products using cheap packaging materials.
- Availability of appropriate sales and distribution systems. The club members’ evaluation
showed that the idea of setting up the project was viable since products would be sold
from the producer to the final consumer.

Evaluation of business ideas basing on costs.

- The projected start-up costs. The club members’ evaluation of the business idea revealed
that the estimated start-up cost was manageable/low so, the members easily raised the
start-up capital.
- The projected cost of raw materials needed. The evaluation of the idea by club members
showed that the projected costs on raw materials was shs……….. that was manageable
so, the club members decided to start the project.
- The projected labour costs. The evaluation showed that the total projected labour costs
were shs…………. And the cost was affordable to the members.
- The projected selling costs. The evaluation indicated that the club members would
manage to pay packaging materials, salespersons at a cost of shs………. And thus opted
to start the project.
 - The efficiency of the production process. The evaluation of the idea basing on the
efficiency of the production process revealed that the production capacity would be
shs……….. which would be efficient enough to set up the project.
- The projected costs of services and handling customer complaints. The evaluation of the
idea revealed that the club would pay small amounts in terms of aftersales services and
handling customers’ complaints. This led to the establishment of the project.
- The estimated patent and license costs. The evaluation of the idea initially showed that
the club would not pay license fees since the project was a small study project. Only
permission from administration to operate the project was granted.

Evaluation of business ideas basing on market growth.

There should be prospects for rapid growth and high return on invested capital. Such indicators
include the following.

- Projected increase in demand. The club members’ evaluation indicated that there was
increasing demand for the products due to increasing school population i.e. from 1700 to
1900. So the club members decided to start the project.
- Increase in the customers’ acceptance. The evaluation of the business idea basing on
customers’ acceptance revealed that more students, staff members were willing to have
another project with better products and this led to the setting up of the project.
- Product newness. The market survey done by club members showed that the project
would easily market new product. The members therefore established the project as a
viable project.
- The competitive advantage of the business idea. The evaluation showed that the idea
would have a competitive advantage over other rivals due to use of high quality inputs,
good customer care and affordable prices. This guided the club to start the project.
- The economic trends. The market survey carried out by club members showed that the
staff members’ payments and allowances were increasing and majority students came
from average income households. This made the business a profitable project.
 Evaluation of business ideas basing on risks.

- There are different business risks which need to be analysed and moderate risks taken. In
assessing business risks, the following factors should be considered.
- The size and power of competitors. The club members’ evaluation showed that the
existing businesses in and near the school were small and not strong enough, this made
the idea of starting a project viable.
- The initial investment costs. The club members’ evaluation indicated that the initial
investment costs for the project was low due to the existence of cheap machinery, raw
materials, labour etc. this made the idea easy to implement.
- The degree of predictability of demand for the products. The evaluation of the idea
showed that it was easy to predict the demand for the product due to factors like
increasing demand that was brought about by increasing population in the school.
- Seasonal demand. The evaluation findings by club members showed that the demand for
the product was termly and thus the club members resolved to start a project to cater for
the students mainly during the three school terms.
- The time required to generate profits. The club members’ evaluation of the idea showed
that it took a short time to make profits due to high demand and therefore went ahead to
start the project.
- The technological risks. When evaluating the idea, the club members discovered that the
available machinery and equipment would serve a long time which led to the starting of
the project.
- Competition from imported products. The club members opted to start a project after
evaluation of the business idea which showed non-existence of rival imported products in
and around the school.
- Market stability. The evaluation showed that the market for products was stable
throughout the term i.e. quantities sold per day.
- The exclusiveness of the product design. The business idea evaluation revealed that the
club members could be more creative and make unique product designs that were
competitive so, the club established the project.
 - Legislations and controls from the school administration. The club members’ evaluation
showed that the quality controls by the school policy could easily be made and thus went
ahead to start the project.
- Quality and reliability of the proposed product. The evaluation of the idea showed that
the club would ensure high quality through using high quality raw materials and proper
packaging thus the club opted to start the project.
- Inventory requirements. The evaluation of the idea showed that few machinery and
equipment and other raw materials needed were easily available thus opted to start the
project.
- Stability in supply and prices of raw materials. The evaluation of the material showed
that both the supply and prices of inputs were stable therefore the club opted for the
project.

Factors that affect the final choice of a good potential idea.

There are 2 factors which include:

Personal considerations.

• Members’ skills/one’s skill. The existing skills of a person or club members can help in
identifying and selecting a business idea where the possessed skills or to be acquired can
be used in the operation of the business.
• One’s interest or group interest. A group or individual can choose a business idea basing
on the interest of the doing the work involved in the business.
• Personal commitment. An individual or group members need to choose a business idea
that allows easy support from the group members or family members.

Business considerations.

These include the following;

• The amount of group/personal capital. One chooses a business after ascertaining that
there is adequate capital for starting the business. There is need to make a list of assets
such as shares and personal savings.
 • Market consideration. There is need to choose goods or services that have reasonable
market in terms of potential target customers, the estimated market share, customers’
preferences, estimated size of the total market and whether the market is over supplied or
not.

Turning a business idea into a business opportunity.

The following steps help a person or group to turn a business idea into a business
opportunity/marketable product.

• Documenting the business idea. This is the process for writing down everything
necessary for implementation of the business idea.
• Researching on the business idea. Research is done from a legal and business standpoint.
To complete an initial patent, research is done to ensure that no one has patented the idea,
research on market to determine the potential customer ability to buy the product.
• Make a prototype. A prototype is a model of the invention related to the business idea. It
puts in practice all the things that have been written by the inventor. This will
demonstrate the design of the invention when it is presented to official lenders or
licensers.
• Filing a patent. After having all the imperfections worked out on design, then a patent for
new processes, or design patent for manufacturing new design, or asking for permission
from the school administration to start the business club.
• Marketing the invention. This involves finding out how products create the market. It
involves deciding whether you will manufacture and sell the products or license it for sale
through other company.

Turning a business idea into a business opportunity.

Business idea generation from different sources

Conducting research from a business idea by following five stages: idea stage, business idea
s analysis, checking competition, fine turning the idea and implementation.

Evaluation of the various business ideas basing on: present market, costs, business
risks and market growth.
 Characteristics of a good business opportunity/indicators of a viable business.

• Availability of real demand/market. A business opportunity that responds to unsatisfied

needs or requirements of customers who have the ability and willingness to purchase e.g.
a school population of 1900 students from middle income families provides market for a
school business club.
• Acceptable reward/good income potential/returns on investment. A good business
opportunity is that one that has the potential to bring in steady acceptable income or
profits for a reasonable period of time for the risk and effort of an entrepreneur.
• Competitive. A good business opportunity is one that performs equally or better than
other available goods and services offered to customers.
• Meets the objective of the risk taker. A good business opportunity is that one that meets
the goals and objectives of the investor e.g. to capture 30% of the total market share for
the product in the area.
• Availability of resources and skills. A good business opportunity is that one which can be
implemented using available resources such as raw materials within the environment and
the skills necessary for establishing and running the business e.g. cheap labour from the
club members.
• Good growth potential. A good business opportunity has a chance to survive for long
while generating sufficient income for the owner such as increasing population with
income.
• Low start-up capital/costs. A good business opportunity is one which requires low capital
or funds for establishment.
• Reasonable of entry into the market. A good business opportunity is one which makes it
fairly easily for the owner to join the market given the skills, experience and other
prevailing factors e.g. favourable policies, limited competition, low costs.
• Acceptable in the community. For a business to be viable and feasible, it should conform
to the social norms and be liked by the community e.g. a bar is not a viable business near
a school.
 • Favourable policy. There should be a conducive policy for investment such supportive
school policy for a school business club.

Types of business opportunities.

These refer to the different categories of potential businesses an entrepreneur or groups of people
can start. They are classified in the following ways.

• Trading/merchandising businesses.

These are businesses that buy finished goods from the wholesalers or manufacturers and then sell
them for profit. They include;

i. Retail businesses. These buy goods from wholesalers in slightly small quantities and sell
them to the final consumers for profit.
ii. Wholesale businesses. These buy goods in large quantities from producers or imports and
sell them to retailers, distributors and large scale consumers.
iii. Franchise businesses. A franchise is a special right given by manufacturers or a sole
distributor to an entrepreneur or business to sell the manufacturer’s goods or services in a
given area.
iv. Independent business. This is one that is established by an individual or group of people
to produce and market goods and services.

• Manufacturing or processing businesses.

These are businesses that transform or process raw materials and make products that are
significantly different from inputs e.g. metal workshops, water purification, milk processing.

• Service businesses.

These are businesses that offer special intangible products that satisfy customers’ needs usually
at a fee e.g. transport businesses, health care businesses, motor garages.

• Agri-businesses.
These are businesses that deal in growing of crops and rearing of animals, poultry and fish. E.g.
dairy farming, horticulture.

FEASIBILITY STUDY.

This is the research or study conducted by an entrepreneur to help assess the viability and
profitability of the project so as determine whether it is a good viable business opportunity or
not. It is the identification process of a good business opportunity.

Key factors looked at in a feasibility study:

• Availability of adequate market

• Growth potential of the project
• Investment, operation and distribution costs
• Demand and supply factors
• Social and environmental conditions

Types of feasibility studies.

A feasibility study should contain the following analyses:

• Commercial /market analysis

• Technical analysis
• Organization/administrative analysis
• Financial analysis
• Environmental analysis
• Economic analysis
• Socio-political analysis

Purpose of a feasibility study.

• The purpose of a feasibility study is to determine if a business opportunity is possible,

practical, and viable.
 • A feasibility study enables them to take a realistic look at both the positive and negative
aspects of the opportunity.
• The purpose of a feasibility study is to examine critical opportunities and obstacles that
might make or break the proposed business.
• The feasibility study should give the group a good idea of whether the proposed project is
likely to be successful as a business.
• The feasibility study usually need to be completed by an independent consultant who is
recognized as having expertise to complete a study.

• Market feasibility study. This covers the following:

Description of the product. The product should have major features to be produced. It should
include target customers, quality standards of the product, price to be charged etc.

Market study. This involves the total market demand for the product, geographical area to be
served, competitors, population of the area, level of income.

• Technical feasibility study. This section relates to the actual production process. It
includes the description of the manufacturing process. The required plant and machinery
to use. The quality control standards. The raw materials needed in the production process.
The estimated production time/cycle. The labour/skills required.
• Financial feasibility study. This is the study of the financial matters of the business
opportunity to assess whether it is profitable or not. It covers the following:
Projected costs. This is the summary(budget) of the estimated total cost for investing in
the project.
Sources of funds. This gives all the possible sources of funds for implementing the
project.
Capacity utilization and income estimation. This shows estimated output in relation to
capacity utilization plus the income estimation for one or more periods.
 Expenditure estimates. This summarises required operation expenditure estimates and
gives the total estimated expenditure. i.e. the budget.
Profitability estimates. This determines the estimated profits in relation to the estimated
income and estimated expenditure.

NOTE: Risk analysis refers to identifying the potential problems and risks likely to
hinder the success of the project, the potential negative consequences and description of
the plan to mitigate or control these risks in order to ensure success.

Steps in evaluating the profitability of the selected business opportunity.

There are five steps followed which include the following.

• Deciding on the type of business to set up. The types of businesses include; trading,
manufacturing, service and agri business depending on the need for the type of business
available, skills and availability of funds.
• Choosing the appropriate location for the planned business. By selecting the appropriate
site basing on the economic, personal factors and competition in the area.
• Forecasting the expected sales for a given period. This is by estimating the size of the
market, volume of sales and determining how to get the market information.
• Estimating the total costs for operating the planned business. These include the costs on
goods, taxes, advertising, utilities and getting the grand total.
• Estimating the projected profits. This is done by deducting the total estimated operating
costs from the total estimated incomes for a given period.

SOCIAL ENTREPRENEURSHIP

Social entrepreneurship refers to the creation of innovative enterprises mainly to make a

positive and sustainable impact in society or on the environment. It provides solutions to social
and environmental problems. This is the establishment or creation of innovative enterprises to
make positive and sustainable impact on society.
A social entrepreneur is a person who recognizes a social problem and uses entrepreneurial
principles to organize, create and manage a business venture to make a social change.

Social problems/concerns are those hardships/happenings that affect the society at large such as

• deforestation,
• pollution,
• poverty,
• unemployment,
• irresponsible waste disposal,
• disease such as HIV/AIDS,
• prostitution,
• street kids,
• domestic violence,
• school drop outs,
• moral decay,
• Natural hazards such as floods, landslides, famine etc.

Objectives of social entrepreneurship

• To improve the image of the local area, this can be done by creating a sustainable
positive impact in the community.
• To improve the standard of living of the people in the community, this can be through
creation of jobs, increasing access to health care by setting up health centers.
• To empower people in society to change their lives and be motivated especially the
disadvantaged. This can be done through social and economic empowerment.
• To use local and regional resources in a creative and effective manner so as to improve
on resource utilization in the community.
• To create wealth for the community or society, this is through generation of investment
which brings economic development
Social enterprises, these are businesses/organizations established with a major aim/objective of
solving problems/challenges in a given community. Or

These are innovative enterprises created to make a positive and sustainable impact on society

Social enterprises are not established to make profits but instead to eliminate social hardships.

Types of social enterprises

Non-profit social enterprises, these are enterprises that do not make financial profits from
delivering their goods and services and they mainly rely on donations for funding their activities.
These are established to purely give assistance to members of the community at no or low cost
e.g. Nsambya babies home, Sanyu babies home, charity babies home, send a cow etc.

For-profit social enterprises, these are enterprises that sell their products for profits but focus
on creating a positive and sustainable impact/change to society.

Hybrid social enterprises, these are enterprises which mix non-profit and for profit strategies or
components to create a sustainable impact.

Most social enterprises are hybrid enterprises.

Key concepts.

Positive. This is where an enterprise has a mission to create positive social or environmental
impact in the community.

Innovative. This is where an enterprise devises new and better ways to accomplish its mission.

Impact. This is the real change created by the work of the social enterprise.

Sustainability. This is the ability of the social enterprise to have a lasting impact in a permanent
system.

Empowerment. Refers to increasing of someone’s power, ability, strength and capacity to do

something.

Consumer. This is the person or company that uses the commodities of an enterprise.
 Comparison between social enterprises and business enterprises.

• End goal. The main goal of the business enterprise is to make profits but the main goal of
a social enterprise is to create a sustainable positive impact in the society.
• Time frame. Business enterprises strive to have immediate results in form of profits or
sales revenue but social enterprises want to have a long term result that is positive to
society and sustainable.
• Type of enterprise. Business enterprises are established for profit making purpose but
social enterprises fall under three categories; Non-profit, For profit and Hybrid.
• Rewards. Business enterprises earn profits or money returns for private investors but the
rewards for social enterprises are inform of social and environmental benefits to the
communities where they operate.
• Target market. Business enterprises target to sell their goods and services to the
potential customers but social enterprises are formed to access the disadvantaged,
vulnerable and undesirable groups in the society.
• Customer orientation. Business enterprises strive to provide super services to meet
customers’ needs so as to survive in the market while social enterprises empower the
community so as to become partners in dev’t.
• Impact. Business enterprises results are in creation of new goods and services on the
market for the target customers while social enterprises result into social, environmental
and economic dev’t of the community and country as a whole.

Importance of social enterprises.

They create a sustainable impact on society and environment by dealing with root causes of
problems in society.

Social enterprises are leaders in innovation and therefore bring wide spread positives effects on
the communities live and work.
They are a transformative force since they come up with ideas to address major problems among
the society. E.g. proper waste management.

They lead to the dev’t of infrastructure inform of better roads, schools, health facilities etc.

They empower communities by training and equipping them with skills for sustainable dev’t.

They provide employment opportunities to community members and thus improve their
standards of living.

Characteristics of social entrepreneurs

Personal leadership. social entrepreneurs lead by example since they have the ability to
influence other people, direct their energies towards a certain goal. Leaders are responsible and
action taking people.

Ethical and principle centred. They are principle centred all the time because they make
decisions according to values they believe in. principles are based and timeless rules and values
that individuals use to make decisions.

Good listeners. Social entrepreneurs listen to people’s ideas and comments to learn their
mistakes and then act on these comments in a way that brings improvement in performance.

Goal oriented and visionary. A social entrepreneur always has a positive vision and goes ahead
to set achievable goals to reach that vision.

Empowering. A social entrepreneur empowers the people by using their potential to attain a
given objective through sensitisation, capacity building and allocation of resources.

Advocators. Social entrepreneurs speak up and take action to implement what they believe is
right so as to have positive impact on society.

Optimistic and flexible. Social entrepreneurs must be positive and possibility thinkers able to
tolerate uncertainty as they push ahead to achieve success.

Risk takers. Social entrepreneurs take moderate risks that have a reasonable chance of success
by involving many people in the implementation of activities so as to reduce the risks.
 Ways a social entrepreneur makes impact.

• By turning a wrong into right. E.g turning prostitutes into business ladies.
• Preventing the end of something good by ensuring its sustainability e.g. natural resources.
• Increasing the quality of life of others like empowering the youth to start income
generating projects.
• By making the world a better place e.g. planting more trees, keeping the environment
clean.

Formulation of vision, mission goals and objectives.

Vision statement. This is a statement giving long term target of where the business wants to be
in the near future. It is a brief statement that highlights what the business is in or plans to start
and where it aims to reach in the near future. E.g. “to ensure a poverty free country by 2040”.

Mission statement. Is a brief statement that gives the overall purpose of the business, its values
and products it sells or plans to sell. A good mission statement should specify the products to be
sold/customers’ needs to be met. Should show how the business will satisfy the customers’
needs. E.g. “ To promote and sell high quality poultry products through practicing modern
farming methods so as to satisfy customers effectively”.

Goals. These are medium and long term targets a business wants to achieve within a stated
period based on the mission statement. A business can have more than one goal but should not be
many because they cannot be easily achieved. Goals should be SMART.

Objectives. These are specific short term targets that the business strives to achieve in the course
of attaining a specific goal. Good objectives have the same characteristics as those of the goal.

Opportunity identification.

There are two types of opportunities in society.

• Positive opportunities
• Negative opportunities.
Social entrepreneurs plan to use assets in innovative ways to meet needs. If entrepreneurs focus
on negative opportunities (threats, needs and problems alone) they can become stuck in some
negative thinking that created a problem.

Identifying positive opportunities (strengths and assets) presents the problem in a new light and
can inspire creative ideas that would not be visible if social entrepreneurs looked at needs only.

Negative opportunities are threats to community dev’t and they include;

• Poverty
• Environmental degradation
• Diseases
• Violence
• Uneducated and un empowered

Positive opportunities are strengths and assets to community dev’t.

• Clean environment
• Healthy
• Educated and empowered
• Wealthy
• Safe

The positive opportunities CHEWS act as solutions while negative opportunities PEDVU act as
problems.

Vision and Visionary leadership

Vision, this refers to the ability to see a clear, detailed mental picture of an idea or the future and
its achieved after a long period of time
while
Visionary leadership,
refers to the ability to lead and inspire others to see a clear, detailed mental picture of an idea or
the future.
Principle and perception
A principle is a basic rule that forms the basis of ethical decision making
 Perception
This refers to personal understanding or interpretation of something.
Perceptions of conflict
Social entrepreneurs believe in having win-win solutions. Win-win solutions are the
solutions that benefit all the parties involved in the conflict.
There are four perceptions of solving a conflict which include;
▪ Win-lose perception, this is a selfish attitude where one party does everything
possible to win at the expense of the other side.
▪ Lose-win perception, this refers to the attitude of letting others get what they
want at the expense of the other side. The problem with this attitude/solution is
that the loser can become annoyed/bitter.
▪ Lose-lose perception, this describes a solution in which neither side wins.
▪ Win-win perception, this is a good attitude which seeks mutual benefits to all the
parties involved in the conflict.

VISIONARY APPROACH TO CONFLICT

This can be defined as a success strategy that requires a person or group of people or
business/country having a strong clear vision can follow systematic action steps to turn that
vision into reality or move from the current state/position to the desired future position.

Steps followed in implementing Bridge the Gap Approach.

• Defining the vision that is to be attained e.g. to reduce HIV prevalence among the youth.
• Examining the current state or situation where the business is in.
• Identifying and acknowledging the current gap between the business and the vision or
future desired position.
• Setting up action steps to be followed to close the gap between the vision and the current
state.
 • Identifying all the resources required for attaining the vision such as money, time, human
resource.
• Setting priorities by arranging activities to be done to move towards the vision in the
order of their importance.
• Choosing and assigning responsible persons to perform the tasks needed to attain the
vision.
• Getting commitment from the people to perform/help in the implementation of the tasks.
• Stating the starting, ending time for activities.
• Drawing the action plan and starting the implementation of activities for attaining the
vision.

Steps followed to become a social entrepreneur.

• Developing the vision i.e. identifying the passion and skills.

• Identifying the opportunities in the community e.g. waste management.
• Matching the vision and opportunity available in the community and doing market
research.
• Acting and spreading change by preparing the social enterprise plan.
• Mobilizing the necessary resources for establishing the social enterprise.
• Completing all the pre-commencement legal formalities such as registration.
• Construction of the needed structures and buildings or paying rent.
• Purchasing and installing the needed machinery, equipment and furniture.
• Recruiting all the needed labour and training them or mobilizing the labour force.
• Launching the social enterprise.
• Starting the operations or activities in a social enterprise.

ADVOCACY SKILLS

This is the verbal, written or symbolic action to promote a mission or cause. Social entrepreneurs
are skilled advocators for their vision and social innovation.

Advocacy is about speaking and writing to others to spread ideas, innovative strategies and
acquire support.
 THE GEPIC STRUCTURE FOR ADVOCACY.

Greet. This means that the social entrepreneur should first introduce himself then thank or
recognize the audience and finally introduce the purpose of writing or speaking to them.

Engage. this means that the advocator should get or draw the attention of the audience using the
quote, statistics or strong and shocking fact to make the topic/idea interesting to the audience.
Should make the idea urgent to encourage immediate reaction e.g. six out of ten children die due
to malaria per month.

Problem/opportunity. This is the problem affecting the society or the opportunity that can be
used/tapped to benefit the community. The advocator should express the problem in clear facts
without including his/her personal opinion. Explain how serious the problem is and give the
available opportunity to overcome the problem.
Inform. The advocator should explain his/her opinion on the opportunity and propose the
innovation or vision needed and then give the details of what should be done to have the idea
achieved or give the proposed action plan.

Call to action/challenge. This is calling/challenging the audience to give support and clearly
suggest the action steps in such a way that the audience chooses between YES or NO to support
the idea.

GREET.

Thank you all for coming to listen to me. My name is……. As a student in this
community, I care about our future and the severe problem of unemployment
which has affected many families and everyone’s opportunities.

ENGAGE.

In the Sunday vision of …, there was a story of many youths who died in Arab
countries in an attempt to search for jobs after failing to get any from their home
country. Many of these are university graduates.
PROBLEM/OPPORTUNITY.

Today, Uganda produces many graduates from more than 14 universities and only 20%
of the 36,000 find employment. The remaining go back to their homes frustrated and
opt for cheap jobs abroad.

INFORM.

There is need to create more jobs in our communities to employ the many graduates
by starting small projects which will grow into big businesses.

CHALLENGE/CALL TO ACTION.

Therefore, am here to challenge you to become part of the solution to this

unemployment problem by taking part in our youth poultry project. By
supporting us, you are helping to change Uganda.

THE SOCIAL ENTERPRISE PLAN.

This is a document prepared by social entrepreneur describing all the requirements needed for
establishing or starting a social enterprise. It acts as a roadmap that a social entrepreneur follows
to plan the establishment of a social enterprise.

Structure of a social enterprise plan.

Introduction

The cover page. This should contain the name and address of the enterprise and the document
name (social enterprise plan).

Title. The name of the enterprise, contacts, physical location of the proposed enterprise and legal
form of the enterprise.

Executive summary of the enterprise. This should contain the following:

➢ Name, address and location of the enterprise.

➢ Legal form of the enterprise
➢ Objectives of the enterprise
➢ Description of goods or services to be produced
➢ Key members of the enterprise/founders
➢ Proposed capital or funding giving the proposed sources.
➢ Statement explaining why the project shall succeed
➢ Proposed date of commencement.

The Theory of Change

Theory of change is the articulation of the underlying beliefs and assumptions that guide a
service delivery strategy and are believed to be critical for producing change and improvement.

Theories of change represent beliefs about what is needed by the target population and what
strategies will enable them to meet those needs. A theory of change is a representation of how a
project, programme or policy initiative is expected to lead to the outcomes or impact.

How you expect this POLICY/programme to cause change?

Is there a proposed evidence based model of how this change will happen?
It is a belief of individuals/groups/organisations on how positive change in behaviours can come
by

It is based on assumptions about what is needed to make these changes.

Components of the Theory of Change.

Vision. This is the ultimate long term goal to be achieved by the project or enterprise. E.g “To
improve livelihood”.

Impact. This is the long term result of the planned activities followed to accomplish the vision.

Outcomes-these are measurable direct results or outputs of the activities carried out by the social
enterprise e.g. 100 people benefited in the project through getting jobs/income.
Activities-the work/tasks performed/done by the social enterprise to achieve the desired results
e.g. training the community members on the importance of saving the environment
Inputs- resources needed so as to achieve the vision e.g. funds, labour, land, knowledge/skills
etc.

Opportunity, this component outlines the external aspects that enable the achievement of the set
goals/target.
Innovation, this involves improvement on the productive resources of the social enterprise to
make them more useful

Social innovation refers to the establishment of new and better ways of accomplishing a social
mission

Components of social innovation

Action and results ie its dors not involve only ideas

Change, for innovation to be a new matter, enough things have to be different from the known
methods

Improvement, it is seen as an Improvement by those who are affected

It takes many forms such as changing what you are doing, where you are working with whom
and how.

Social value, refers to providing a solution to the problems and creating value to individuals and
ultimately the community.

Impact assessment

This refers to the process of establishing whether the project has achieved its goals or not Or the
process of measuring the impact of a social enterprise to the community.

Importance of impact assessment

• It enables the entrepreneur to establish whether he/she is successful or not

• It indicates what is working and what is not working about a social enterprise

• It provides a valuable opportunity to an entrepreneur to listen to the people e.g. with them
to solve a problem

• It gives a social entrepreneur chance to understand what is effective and what is not
effective about a social enterprise

• It enables entrepreneur to revise and improve their social enterprise basing on what works
and what does not work

Reasons why it is necessary for an entrepreneur to carry out impact assessment for an
enterprise;

• To establish whether he is successful or not

• To indicate what is working and what is not working about a social enterprise
• To provide a valuable opportunity to listen to people they work with
• To get a chance to understand what is effective and ineffective about a social enterprise
• To refine and improve the social enterprise based on what works and what does not work
 • To reduce on the cost and time of project implementation
• To increase project acceptance
• To improve project performance

Management and operation, this involves management role and opportunities, delivery of
products and operation of activities.
Sustainability plan, this shows how the project renews its own resources. The elements of the
sustainable plan include, the budget of the social enterprise, startup funding strategies i.e. sources
of funds/capital, ways of maximizing of profits and profit management strategies.

Role of finance in the sustainability of a social enterprise

▪ Paying employees for their duties and responsibilities in the enterprise

▪ Renting buildings/premises were the business is carried out
▪ Hiring skilled labour for the day to day running of business or production of goods and
services
▪ Purchasing raw materials /inputs used for day to day business operations such as stationery
▪ Installing high level of technology for running business activities
▪ Conducting workshops and seminars equip workers with skills to run business activities
better
▪ Registering and obtaining the right to produce i.e. registration and licensing
▪ Undertaking research to find out various views /opinion of customers about products
produced by the business
▪ Carrying out benchmarking with other enterprises that are profitable in order to copy their
practices/techniques

Ways of sustaining a social enterprise

• Lobbying for regular donations

• Insuring the business
• Training employees
 • Ensuring democratic leadership
• Negotiating for community acceptance
• Diversifying of the business activities
• Promoting social responsibility
• Re investing profits into the business
• Encouraging savings for future investment
• Using locally available resources to replace scarce materials

Strategies for community development used by social entrepreneurs

Social entrepreneurs use the following strategies to achieve their objectives;

• Increasing access to basic goods and services, this involves increasing access to
goods such as food, education, health services etc. to improve the welfare of the
disadvantaged.
• Increasing knowledge through education and awareness, this involves awareness
on issues such as diseases like malaria, HIV/AIDS etc.
• Increasing the opportunities for the disadvantaged group, here various
opportunities that exist in the community such as employment are made available to
certain individuals to avoid inequality, social tension and poverty.

Social entrepreneurship opportunities that exist in the society

There are different opportunities in the community that can be used to start a social
enterprise. They include;

• Social investment funds, social investments pull together various sources of funds
from different donations from rich and wealthy people in the community.
• Community based organizations (CBOS) and nongovernmental organizations
(NGOS), these usually do not aim at making profits but have a social mission.
• Government and embassies, movements usually provide policies, technical
assistance to people who are positively impacting the society.
 • Foundations, these mainly give donations and grants to people who are willing and
able to start up social enterprises.

Threats to community development

• Discrimination, this refers to unfair treatment of a person or group of persons based

on age, financial status, place of birth, gender etc. Which limits community
development?
• Dishonesty, this is the use of lies/ misleading words and actions. This leads to
corruption and exploitation in society which limits development.
• Illiteracy, this refers to the state were people are not educated; this limits skills
development of the people in the community hence limiting development.
• Dependence, this is the state of relying on someone for support/ survival. A high
degree of dependence limits community development.

Environmental threats that exist in the community resulting from unsustainable use of
resources

• Deforestation, this involves cutting down trees on a large scale and this threatens the
community. This is also known as devastation.
• Pollution, this can be in form of air, water and noise pollution that results from
establishment of industries in the community.
• Global warming, this refers to the general rise in temperature of the planet as a result
of destruction of the ozone layer.
• Swamp reclamation, this refers to activities being done in swamps or wetlands that
affect their existence which results into destruction of aquatic life.
• Land degradation: this refers to spoiling of land due to various human activities. It
results into loss of soil fertility and affects agricultural production (production the
agricultural sector).
• Exhaustion of natural resources such as minerals, this leads to inadequate supply
of raw materials needed in production of various products.
• Moral decay/ loss of morals, this refers to behaving in a way that contradicts with
the social norms of the community.
 Measures to minimize the environmental threats

• Setting up environmental standards that should be followed/ observed strictly by

entrepreneurs.
• Treating industrial wastes before disposing them into water bodies. This minimizes
their effects on the aquatic life.
• Carrying out environmental impact assessment before setting up industries. This
reduces the adverse effects on the surrounding areas.
• Ensuring proper waste disposal, businesses should have disposal units where waste
materials are disposed to avoid disposing them anyhow.
• Recycling the bi-products to avoid endangering the soil e.g. polythene bags, plastics
can be recycled to reduce their effects on the soils.
• under taking soil conservation methods to reduce the effects of soil erosion on the
environment e.g. mulching, intercropping, contour ploughing ,etc
• using alternative packaging materials that are less dangerous to the environment e.g.
use of paper bags that can decompose
• Using chemicals that are less dangerous to plants, animals, birds and human life. This
helps to reduce the impact/ effect to the environment.
• Looking for alternative sources of power such as electricity, biogas, solar etc. this
helps to reduce wood consumption hence reducing the rate of deforestation.

Climate change

This refers to the changing temperature of the planet.

Global warming, this is an increase in the temperature of the planet.

Effects of climate change on the environment.

• Melting of glaciers in mountainous areas, this makes rivers to increase in size and
change their course thereby resulting into loss of farm land and displacement of people
(eco refugees)
• Changing the pattern of seasons, this disorganizes farmers and they end up migrating to
urban areas.
• Causing extinction of some species that can not survive in the changing
temperatures; some species go extinct or forced to change location due to changing
vegetation belts. This results into reduced tourism because of loss of biodiversity.
• Changing vegetation belts from forests to savannah and savannah to deserts. This
forces people to migrate to better areas/ urban areas

Ways of saving the environment

The environment can be saved by using the 5Rs, namely:

• Reducing, this refers to the act of decreasing the amount of natural resources used e.g.
using less fire wood or charcoal by using energy efficient stoves.
• Re-using, this means getting creative ways to use resources in new ways e.g. filling
plastic bottles with soil and using them as bricks to construct a house.
• Re-cycling, this involves collecting waste materials that would be thrown away or burnt
and taking them to a recycling facility in order to turn them into a new product.
• Repairing, this means that if a product is broken or damaged, instead of wasting it find
a way of repairing it and use it again.
• Restricting, this involves limiting the use of resources

Root cause analysis

A root cause refers to the primary cause of a situation/problem.

Root cause analysis involves a careful examination of a problem by an expert or social

entrepreneur in order to find out a long lasting workable solution.

Format of a root cause analysis

Business name

PO box ….

Tel…..

Root cause analysis for………..

Problem statement………..?
 Why………?

Why ………?

Why ……..?

Root cause……?

Necessary ……..?

Qn: you are operating a restaurant and bar business in your nearby urban Centre. Your
business is experiencing a gradual decline in sales. Perform a root cause analysis for the
declining sales.

Root cause analysis for declining sales

Enterprise title

Problem statement; declining sales

Why: inappropriate customer care

Why: limited skilled labour

Why: limited training of workers

Root cause -Limited training of workers to equip them with the

required skills

Course of action- training of workers to equip them with the required skills

Qn. Having identified a problem of irresponsible waste disposal in your home area. You
have come up with the idea of starting a social enterprise to deal with the problem

(a) Carryout a root cause analysis for the problem

Responsibilities of social entrepreneurs to the community

Provide access to the educational facilities

Provision of access to health services
Provision of sustainable source of income
Provision of employment
Improvement of the quality of life of the people
Reduce harmful effects/impact on the environment
Improve infrastructures
Facilitate changes in peoples thinking and attitudes from negative to positive living
Equip the community members with survival skills/empowering people /training of the
community
Provide market for local products or products of the community
Provide support for social services
Encouraging unity and harmony in the community
Utilizing the would be idle resources
Teach the community to be innovative and creative
Encourage people to identify business opportunities
Preventing the end of something good/sustainability
Creating a sustainable impact on the community
Discovering vision, passion and skills/talents
Increasing opportunities to the disadvantaged or vulnerable groups
Contributing towards government revenue/paying taxes

MARKETING MANAGEMENT SKILLS

Marketing refers to the various activities undertaken by an entrepreneur in order to find out who
his /her customers are and their needs. Or the process of identifying anticipating and satisfying
customers’ needs effectively and profitably
It involves all activities which are necessary to make products from the producer to the
consumer. Marketing aims at satisfying customers’ needs and ensuring that the entrepreneur gets
the desired level of profits. It consists of market research, pricing, promotion, distribution,
customer care and sales activities.
 Marketing activities undertaken by an entrepreneur
• Conducting market research to find out what customers need
• Developing the goods or services that satisfy the customers’ needs
• Providing products that can meet the identified needs of the customers.
• Setting the price which is affordable to the customers and which enables
• the entrepreneur to make profit.
• Promoting products to attract customers to buy them and to maintain their interest in the
products.
• Distributing the products to the target customers.
• Providing customer care
• Maintaining the brand image or public relations
• Selling the products to the customers
• Performing appropriate after sales services.

DIFFERENCES BETWEEN SELLING AND MARKETING

• In selling an entrepreneur converts goods and services into cash where as in marketing
the seller converts customers’ needs into products.
• Selling focuses on sellers needs while marketing focuses on customers’ needs.
• In marketing, the customer enjoys supreme importance while in selling the seller enjoys
supreme importance.
• In selling profits are realized through sales volumes while in marketing profits are
realized through customer satisfaction.
• In selling there is “caveat emptor” in let the buyer be aware of what he is buying whereas
in marketing there is “caveat venditor”. I.e. Let the seller be aware of what he is
marketing.
• In selling there is a fragmented approach to achieve immediate gains while in marketing
there is an integrated approach to achieve long term goals.
• In selling a product enjoys supreme importance while in marketing, a customer enjoys
supreme importance.

Terms associated with marketing

Market.
Market share
Market gap
Market segment
Marketing testing
Marketing ethics
Market potential
Market fit
 Target market population

TARGET MARKET POPULATION

This refers to a group of people the entrepreneur intends to sell his/ her goods and services. In
marketing its vital for an entrepreneur to identify the likely buyers of his / her product in order to
plan a marketing strategy to use.
The buyers may include;
• Students
• Rural people
• Urban dwellers
• Rich / high income people
• Poor / low income people
• Youths
• Men
• Women
• Children
• Institutions like churches, schools etc
The entrepreneur has to find out the market share of his / her good or service. Market share refers
to the percentage of the target market population that is wiling and able to buy the businesses
good or service.
If consumers are not willing or willing but not able to buy a business product it implies that there
is no market for that product.

FACTORS THAT INFLUENCE THE TARGET MARKET POPULATION FOR A

PRODUCT
• The consumption behavior of consumers / TMP, consumers’ behavior so much determine
their expenditure patterns on certain items e.g. alcoholics, smokers, sports funs etc.
• Age and gender of the target population, different age and sex groups require different
items such as colours, size, shape etc in a product.
• Level of competition i.e. businesses that deal in producing or selling of the same
products. The behavior, size and strategies of competitors influences the target market
that an entrepreneur can have. This is because they have the same objectives.
• Income levels of the target market population, this determines people’s ability to buy a
given good or service. If earnings of the people are high, they may consume more goods
and services compared to when the earnings are low
• Market trends, this can be in form of population shifts, change in people’s life styles,
change in people’s tastes and preferences, change in people disposable income etc.
 when these change infavour of the business' products, the target market population
expands and vice versa.
• Regulatory developments, in case the government regulations are in favour of the
production and consumption of the products of the business, the target market is high and
if they are against the consumption of the products the TMP is low.
NB: For an entrepreneur to be able to get information regarding the above mentioned
factors, he / she has to carry out a market research / survey.

Characteristics of potential customers/target customers

Age

Sex

Location of customers

Income level

Occupation

Leisure activities

Usage

MARKET RESEARCH / SURVEY

This is the process of collecting and analysing of information from customers about the
opinions, ideas and complaints on a given product.
or
The study aimed at identifying market gaps to be filled by an entrepreneur.
Or
Marketing research is the systematic gathering, recording and analyzing of data about the
problem relating to the marketing of goods and services.
Entrepreneurs carryout market research in order to find answers to the questions below about
customer and competition.
•
Who are my customers and potential customers.
•
Where do they live i.e. far or near. Rural areas or urban areas.
•Am /offering the kind of goods or services they want at the best place at the best time
and in the right amounts?
• Is my proposed price rights?
• Are my sales promotion activities rights?
• What are the strengths and weaknesses of my competitors?
• What are my likely future sales/ market share?
• What do customers need in my products?
Reasons for carrying out market research
Why is it necessary to carry out market research?
• To identify problems in the current market
• To reduce business risks
• To estimate the level of income pf customers
• To determine the level of profitability of the business products.
• To get basic facts about the market to help you make better decisions and setup plans of
actions.
• To estimate future sales and expected share of the market.
• To identify the market trends e.g. population shift.
• To identify the nature of the customers in terms of age, sex, occupation etc.
• To identify where to locate the business
• To identify the potential customers of the business
• To check on the effectiveness of promotional methods
• To identify the competitors’ strengths and weaknesses.
• To identify the best channels of distributing goods.
• To identify customers’ needs in terms of types, quality and quantity of good and
services.
Tools / means / methods through which data can be collected during market research
• Telephone surveys, TV and radio callers this method is becoming popular these days and
it is fast and convenient, people are willing to respond over the phone than in a face to
face interview because it is less intimidating.
• Questionnaires here a self/ list of questions is prepared and then used during interview.
People in the community especially those who are potential customers to the business
should be interviewed. The respondents may fill the questionnaire or the interviewer may
fill in the respondents’ answers.
 • Brain storming, this is a technique used to solve a problem by generating as many idea
as possible. You can brain storm by yourself or by teaming up with other people. In this
case one of the members should be a leader and another recorder of the generated ideas.
A brain storming process begins with a question from the leader.
• Personal contacts here you can conduct an informal survey by talking to your family
members and friends. This can be done by asking them the new products or businesses
that they think are needed in the area. Their answer may give you some new ideas to
think about.
• Observation, by just observing business activities in the community you is conducting
an informal survey. This observation will reveal to you the need for particular business
or products in the area. (Observation checklist)
• Interviewing different groups of people. This involves conducting formal discussions
where the people concerned give their views on different areas of interest. In the course
of the interview business problems can be identified these problems. (interview guide)
PROCESS / STEPS OF CONDUCTING MARKET RESEARCH
• Defining the research problems this gives a justification to be conducted.
• Deciding on the method of data collection to use e.g Questionnaire, interviews etc.
• Going to the field to collect data
• Analyzing the collected data.
• Writing and presenting the report about the research findings.
Market assessment
This refers to the process of collecting and using market information in order to determine the
market for the products of a business and also identify the real or potential problems.
OR
It is a process of obtaining information to determine the market for a business’ product
Or
The process through which an entrepreneur finds out how much market his/her products will
have when come on to the market
Market assessment helps the entrepreneur to find out the real and potential market of the
business products.
Objectives of carrying out market assessment
To establish the interest/needs of customers.
To identify the competitors of the business.
To determine the size of the market.
To establish the challenges in the market.
To promote the business’ product.
 To assess the effectiveness of the promotion channel used.
To determine the business’ market gap.
To establish the trends of the market.
To establish the prices customers are willing to pay.
To obtain customers’ view about the design and quality of the product.
Factors to be considered when conducting a market assessment
The target market for the products, this refers to people, businesses or institutions the
business intends to serve. An entrepreneur may wish to look at their age,sex,income levels,
education etc
The nature of the products to be produced and what the market wants, here the
entrepreneur looks at the products variety, quality, design, features, brand name etc. all
these are checked against what the customers would wish to have.
The competition and substitutes business’ products will face and how this affects
their market, the entrepreneurs have to check on the competitors he/she will face in the
market and establish the level of competition his/her products are going to face.
The target market trends and their implications on the business market, the
entrepreneur would wish to know how the market he/ she intend to join has been
behaving in the recent past.
The information to look for when conducting a market assessment exercise
Identify customers’
Age
Occupation
Family size
Marital status
Residence
Income
Interest and hobbies
Special interests
Etc
Customer needs
Is the product needed for alimited time?
How often are the products required?
Will customers come frequently or seldom?
Are customers looking for wider distribution or more convenient location?
What product variety,quality,design,features, brand,packaging and range of sizes are
they looking for?
Competition
Who are the competitors?
Where are they located?
What are their weaknesses?
What are their strength?
 How are their products compared with yours interms of
function,appearance,performance,quality etc
What are the company’s marketing activities? How does it market its products?
What is the company’s price structure?
Who supplies the company with goods, raw materials etc?
What are the strength and weaknesses of the business?
Is the company expanding or reducing in size?
What is the competitor’s market share?
How much sales volume do they do?
Trends: Are there;
Population shifts(e.g. are more people coming to live in the area)?
Legal or regulatory developments that may affect the market in the future?
Positive or negative changes in the economic growth or situations e.g. are more people
getting employed now than before?
Cheaper and more fashionable goods coming on the market than before?
Do people now have more disposable income than before?
Are the people’s lifestyles changing?
Is the market stable or volatile?
How does the market treat new entrants?
What are the major factors that are driving the market trends, is it the
price,seasons,population,income,government policies?

MARKETING TECHNIQUES
These are tools that are employed by an entrepreneur so as to carry out his marketing
effectively. They include;
• Advertising
• Giving free gifts to customers.
• Proper handling of customers
• Using of attractive display of product , this can be done in side or outside the business
premises.
• Using effective communication , this helps an entrepreneur to pass on the massage about
his / her products to the target customers. This message can be conveyed through various
media such as radio, TV, newspapers etc.
• Negotiations, this refers to the bargaining process which takes place be
• Ensuring good customer relations, this is done to create a good public image of the
business.
• Providing of prompt services to the customer.
• Extending discounts to customers especially regular customers especially regular
customers.
 • Extending credit facilities to the credit worthy customers.
• Offering favourable pricing policies and strategies
• Quality improvement
• making a decision on how to market or distribute a product
• personal selling
• price reduction

Customer relations/customer care

This refers to the good ways a business deals with customers.
indicators/manifestations of good customer relations in business include.
• pleasantness, ability of an entrepreneur or employees to deal with customers with
happiness.
• Honesty, ability of an entrepreneur to tell the truth about the business products.
• Being available to assist customers, this makes them develop confidence in the business /
entrepreneur.
• Handling customers' complaints, this involves carefully attending to the complaints
presented by the customers eg poor quality, delays in delivery etc
Giving attention to customers by showing concern, rendering the service as required etc
• Being tactful, ability to handle difficult situations with wisdom in order to build
confidence in the customer and to avoid disappointing him.
• Possessions of sound knowledge, this involves having proper knowledge of the goods
and services that are sold by the business so as to be able to inform customers.
• Providing prompt service, providing services immediately to the customers without
unnecessary delays.
• Good business language, this involves using impressive speaking style that can encourage
customers to continue buying from the business.

indicators/manifestations of customer care in business

• Increased turn over /sales levels
• increased profit level
• increased market share
• Good public image /popularity of the business
• increased customer loyalty
• Expansion of business in terms of stock and new branches
 • limited intervention from the government
• Steady and reliable business supplies

Benefits of good customer care in business

• It leads to increased sales
• It makes the entrepreneur's business popular and acquire good will
• It helps the business to retain its market
• Attracts customers away from the competitors
• It promotes publicity of the business
• It creates direct contact between the business and the customers
• It helps the entrepreneur to introduce new products or designs

Ways of handling difficult customers

• Being calm and pleasant when dealing customers
• By establishing a customer service desk
• Listening to customers ie not arguing with customers
• keeping promises building rapport with customers through empathy
• Lowering the entrepreneur's voice
• Taking the customer as a King
• Avoiding getting upset /angry with customers
• Avoiding taking issues/complaints personal
• acknowledging but not agreeing
• Being specific with customers' needs
• By referring customers’ complaints to high authorities
• By involving security

Marketing mix
This refers to a combination of various elements (inputs or decisions) which constitute the core
of a company’s marketing programme
Or
The key marketing decision areas that have to be made in the business' marketing programme.
The elements are precisely referred to as the5ps of marketing mix.
The components of marketing mix include;
• Product planning and development
• Pricing
• Place identification
• Promotion
• Positioning
Note: The entrepreneur has to combine these five elements or areas into the business' overall
marketing programme.
1. Product planning and development
A product is either a physical good or service that can be offered by the entrepreneur for
satisfaction of people’s needs.
Marketing specialists make surveys to find out what goods and services people need in order to
produce products which can meet people’s needs. Commodity colour, quality, design etc. must
put consumer needs into consideration.
When developing a product the following should be considered
• Develop a product that the customer need.
• Use product attributes that customers want e.g. shape, colour, packing brand name,
quality, size etc.
• Find out whether you can make a better product or similar to these already on the market
(those of your competitors).
• Check out the possible sources and costs of raw materials.
• Identify the major competitors in the market.
Pricing
The entrepreneur should determine the price at which the product is to be sold. The price should
reflect the value of the product. More so the price should be law enough to attract buyers but at
the same time it should be high enough to enable an entrepreneur to generate profit and cover the
cost of producing a good or service.
Factors need to be considered when determining the price of a product.
The Cost of producing the good or service
The quantity in which people buy and how much they are willing to pay
The price of the competitor/ Price of other similar products on the market
The need to make the price more attractive to customers e.g. making special offers and price
discounts.
The segment of the customers to be served e.g. rich or poor
Nature of the product i.e. durable or perishable, durable products are normally sold at higher
prices than the perishable ones
Seasonal products, these are normally sold at higher prices during their seasons compared to
those which are not seasonal
Methods used in pricing of a product
• Cost based method, here price is based on the cost of producing a product or expenses
incurred to produce the product.
• Supply oriented pricing, price depends on how much is supplied and the number of the
competing supplied of the similar or related products.
• Completion based pricing, here price is based on the prices on the competitors i.e. those
who deal in the same product.
• Demand / customers oriented pricing; here price is based on demand in the market. In this
case where demand is high a high price is charged and vice versa.
• Fashion oriented pricing, price depends on the fashion of the product i.e. whether new or
old.
• Contract or treaty pricing, price is based on the agreement made between the supplier /
seller and the buyer.
• Government pricing policy, government can set law prices to encourage consumption or
a high price to discourage consumption
3. Place / distribution
In order to satisfy customers, the entrepreneur or wholesaler should avail his/ her products at the
right time and in a convenient location.
Any marketing manager should choose and manage the distribution channels, through which the
products can reach the right market at the right time.
In this case the following aspects should be put into consideration.
• Delivery of the product i.e. directly or through middle men.
• Methods of transport to be used in the place
• Storage facilities available
• Is the product having an effect on the environment around or not?
4. Promotion
This refers to all activities aimed at telling consumers about the product and trying to persuade
them to buy it. An entrepreneur needs to look at promotion as a very important variable
because:-
- It increases public awareness of the product.
- Educates customers about how products are used
- Renews customer’s interest in the product.
- Retains market for the products of the business / stabilizes sales
- reminds the public of the products available for sale
 - helps the business to out compete competitors
- helps the entrepreneur to introduce new brands to the market
- maintains sales of seasonal products
However, there is need to consider the costs involved in the means of promotion selected.
The ways of promoting sales include:
- Through offering free samples to potential customers.
- By using attractive window / act side display of products.
- By using trade faire and exhibitions
- By using attractive packing materials for the products.
- By using sign posts / means signs / bill boards etc.
- By giving discounts to customers.
- By extending credit facilities to credit worthy customers.
- providing money back offer
- Using exchange schemes
5. Positioning
This refers to putting of a product strategically to target a particular segment of customers eg.
Putting dolls, chocolate, Biscuits, sweets at the counter where children can easily see them and
develop interest in them.
An entrepreneur should be guided by the following questions when positioning his/her products.
• What good or service do /offer?
• Who are my target customers?
• Where do they want to find the products?
• How would customers wish to be served?
Marketing strategy
These are policies of identifying customer groups or target market which a small business
can serve better than its competitors and use its marketing tools/ techniques towards that
particular market segment. They include;
Tools for effective marketing strategy
• Net working, this involves establishing relationship with new people by giving them
referrals, business cards, contacts etc. This technique is commonly used by small
business/ entrepreneurs
• Adverting, most adverts focus on the campaigns, product features instead of the
customers’ problems. One should create a great advert by concentrating on the problems
that a product can solve.
• Offering guarantees, this gives customers an assurance that the products offerred are of
good quality.
 • Give free information to interested people, giving information about products and what it
can do in solving the problems of the target customers.
• Cold calling, this involves opining up a conversation with another person about one's
business. The conversation should be enticing to capture the other person’s attention.
• New letters, the new letters should be issued to your customers and prospects and it
should be carrying valuable information to your customers.
• Writing, this involves sending information to customers and prospects through
magazines, web sites etc.
• Referrals, in this case one asks his clients to refer new customers to him. Do An
entrepreneur should not just sit back and assume that a satisfied customer will refer some
one to him.
Potential customers
These are the people who share common needs and characteristics that a business decides to
serve.
Characteristics of potential customers
•Age, people of different age, have different requirements for different reasons.
•Sex, are your potential customers mainly males of females?
•Location, customers can be defined in terms of where they live or work.
• Income level, customers can be low a high income earners.
•Employment / occupation, there is a relationship between a persons’ occupation and
tastes or attitudes.
MARKET SEGMENTATION
This refers to the diving of the market into groups of individual markets with similar wants /
needs. An entrepreneur divides these markets into district groups which have distinct needs,
behavior or which might need different products.
Objectives / reasons of market segmentation
• To group customers with similar needs.
• To meet the needs of particular/ selected customers
• To increase sales and minimize advertising costs by targeting people who are likely
to buy.
• To increase opportunities for growth through increased sales.
• To increase profits for the business through charging different prices in the different
market segments.
• To determine the market segment to serve.
• To ensure better matching of customers’ needs
• To increase market share in the segment selected.
• To be able to retain more customers
 • To be able to deliver the marketing message to a relevant customer audience

Basis of market segmentation

Market segmentation is done basing on the following factors.
• Demographics, here customers are grouped according to characteristics such as age or
house hold composition.
• Socio - economic characteristics, customers are grouped basing on income, occupation
and education. These characteristics indicate customers' lifestyles, sensitivity to price,
brand preference etc.
• Product usage, here segmentation is done basing on the potential to use the firm's
product. The potential to use the products can be determined by asking questions such
as; are you able to use the products? Have you used it in the past? Are you considering
to use it?
• Psychographic, here segmentation is based on people's personality, attitudes, opinions
and lifestyles.
• Generation, this refers to people born in the same period of time. These tend to have
similar likes, tastes and preferences. This is a good basis of segmentation.
• Geo-demographics, this is the combination of demographics and geography. This
identifies groups of small geographical area which have similar demographic profile.
Criteria for selecting a segmentation basis
The market segments identified should satisfy the following conditions;
• Internal homogeneity / external heterogeneity.
This means that potential customers within a segment should have similar responses to the
marketing mix variables of interest but a different response to members of other segments.
• Parsimony. This refers to the degree to which the segmentation makes every potential
customer a unique target. The segmentation should identify a small set of grouping of
substantial size.
• Accessibility, this refers to the degree to which marketers can reach segments separately
using observable characteristics of the segments.
How market segmentation can increase sales
By better meeting of customers’ needs, through better positioning to chosen segments, you may
be able to increase market share and volume of units sold.
Through better meeting of customers’ needs, you can be able to increase product price without
sacrificing much volume.
By targeting only the most profitable segments, you may be able to reduce marketing costs.
Product promotion
This refers to the form of communication used to inform, persuade and remind people about an
entrepreneur's products.
Types of product promotion
Sales promotion, various ways used by an entrepreneur to attract or influence people to buy more
of his / her products.
Advertising, spreading of information to the public about the availability of the products to
customers in order to increase sales.
Personal selling, a situation where a team of sales force is employed to sell the business' products
directly to customers.
Publicity, the Planned and sustained effort to establish and maintain good will and mutual
understanding between a business and the public. This is done through press releases, corporate
social responsibility such as planting trees, use of corporate logos etc
Reasons / objectives of carrying out product promotion
To increase public awareness of the product.
To educate customers about how products are used
To renew customer’s interest in the product.
To retain market for the products of the business / stabilizes sales
To remind the public of the products available for sale
To help the business to out compete competitors
To help the entrepreneur to introduce new brands to the market

PROMOTION OF GOODS AND SERVICES

Sales promotion refers to all activities other than advertising and personal selling that are carried
out by an entrepreneur so as to increase sales of a particular commodity.
Sales promotion can also be defined as any attempts made to boost the sales of a product.
Objectives of carrying out sales promotion
Reasons for carrying out sales promotion
• To increase sales of a business through attracting new customer and maintaining the
exiting one’s. This is the major objective of sales promotion.
• To introduce new products e.g. through giving of free samples to potential customers.
 • To out compete competitors
• To bridge the gap between the producer and the customers
• To maintain sales of seasonal products e.g. through giving off seasonal discount for these
products such as room heaters, winter clothes etc.
• To stabilize sales of the products / To retain the market
• To remind the public about the products available for sale
• To target a particular segment of the market to whom the products are to be sold

Importance of sales promotion to manufacturers

• It helps to increase sales in a competitive market hence increased profits.
• It helps to introduce new products in the market by drawing the attention of potential
customers.
• It stabilizes sales volume by maintaining the existing customers.
• It helps to introduce new products and to dispose off existing stock when there is change
of fashion, tastes and preference.
Importance of sales promotion to consumer
• It helps the customers to get products at cheaper prices.
• It helps to raise the standard of living of people by using the latest items available in the
market.
• Certain scheme such as money back offer creates confidence in the mind of customers
about the quality of goods.
• It helps customers to get all information about the quality, features and uses of different
products.
• It gives financial benefits to the customers by way of providing prize and sending them to
visit different places.
Methods used to promote sales of a product
The entrepreneur or wholesaler can use the following methods to communicate with his/ her
customers so as to increase sales.
• Giving out free samples to potential customers
• Premium or bonus offer, here a free item is given on purchase of a product e.g. a tooth
brush with a tooth paste.
• Exchange schemes, refers to an offer to exchange an old product for a new one at a price
less than the original price of the product.
• Offering sales services such as delivery of goods, repair and maintenance etc
• By giving money back offer to customers, here customers are given assurance that full
value of the product will be returned to them if they are not satisfied with the product.
 • By using attractive window activity, this method is affordable by small business but to be
effective, the display should be changed every after a given period of time e.g. a week,
month etc.
• Through scratch and will offer, in this scheme the customer scratches a specific market
area on the package of the product and gets the benefit according to the message written
there.
• By using trading stamps, in this case trading stamps are distributed among thee customers
according to the value of their Purchase. Customers are required to collect stamps of a
given value within a specified period of time to get some benefit.
• By selling good on credit to credit worthy customers.
• By offering cash discounts to customers who buy in large quantities and those who buy
on credit and pay promptly.
• Through giving donations inform of cash or goods to people who are in need e.g.
disabled orphans, sick etc.
• By organizing competitions or games.
• By marinating links with current or potential customers, whole sales and retailers. This
keeps the right people well informed about your products.
• Though trade fairs and exhibitions, these are normally organized at local, regional,
national or international level.
• Through price offers, here products are sold at a price lower than the original price. This
scheme is normally used to boost sales in off peak seasons and when introducing a new
product in the market.
• By using coupons, coupons are issued by the producers either in the packet of a product
or through an advert printed in the newspaper, magazines etc.
• Through creating the right attitude in your workers. This is done by training employees to
be friendly to customers and to be knowledgeable about the product they are selling.
Sales promotion strategies
This refers to any activity that is designed to help boost the sales of a product.
Because sales are the back bone of the business i.e. the business cannot exist without sales,
therefore, if a business is to succeed an entrepreneur should have a sales promotion strategy in
mind.
Sales promotion boosts sales by attracting new customers and retaining the old ones.
Sales promotion strategies can be done through,
• An advertising campaign
• Public relation activities
• A free sampling campaign
• A free gift campaign
• Demonstrations and exhibitions
 • Prize giving competitions
• Temporary price cuts.
• Door to door sales
• Etc
Points to consider when developing a sales promotion strategy for one's business
• Consumers' attitudes and buying patterns
• One's brand strategy
• One's competitive strategy
• One's advertising strategy
• Other external factors that can influence one's products availability and pricing

Types of sales promotion strategies

• A push sales promotion strategy,
This strategy involves pushing distributors and retailers to sell the entrepreneur's products to the
customers by offering various kinds of promotions and personal selling efforts.
In this case the producer promotes is products to a retailer who in turn promotes it to the
consumer.
Examples of push sales promotion strategies
- Buy back guarantees
- Free trails
- Discounts
- Contents

• “Pull” sales promotion strategy, this involves attracting the customers to buy the
products directly from the producer.
This strategy focuses on the consumer instead of the retailer or distributor.
The aim of this strategy is to direct marketing efforts directly to the consumers with the hope
that it will stimulate interest and demand for the product.
Examples of pull sales promotion strategies
- Samples
- Coupons
- Cash refunds

• A combination of sales promotion strategy, this is a combination of push and pull

strategies. This strategy focuses on both the distributors and the consumers, targeting
both of them directly.
ADVERTISING
This refers to spreading of information to the public about the availability of the products
to customers in order to increase sales.
Or
It is the means by which information is spread by producers and sellers about the availability of
their goods in an attempt to increase sales.
Or
It refers to the act of informing customers of the availability of a product and attracting them to
buy that product
The wise men once urged that, “the person who saves money by not advertising is like a man
who stops the clock to save time”.
Every business must advertise in some way if it’s to succeed.
TYPES OF ADVERTISING
There are majorly two types of advertising namely: - Informative and persuasive or competitive
advertising.
Informative advertising: - This is a form of advertising which aims at making the public aware of
the products available for sale and where they can be obtained and sometimes the prices are
mentioned.
This kind of advertising is normally used when there are not many competitors in the business.
Persuasive or competitive advertising: - This is a form of advertising which is designed/aimed to
induce or persuade members of the public to emphasize the consumption of a certain good. This
type of advertising tries to persuade the public through indicating the best taste, flavor or the
price of the product, the convenience of using the product etc.

Objectives of advertising in an enterprise

To persuade customers to buy the product
To increase sales ie to facilitate speedy movement of the product
To stabilize sales
To position the business' products
To respond to inquiries of customers
To educate customers about the product
To sustain the interest of the customers
To promote the image of the enterprise ie to create goodwill for the business and entrepreneur
To remind customers about the availability of a product
To facilitate competition

ADVERTISING MEDIA
They refer to the channels of communication used by the advertising industry to pass over the
information to the customers.
Or
These are tools or means used to convey the advertising message to costumers.
The advertising media include;
Radio
This is where the advertising message is passed over a radio to the potential customer.
Advertising on radio is done by the commercial section of any particular radio station.
Advantages of radio advertising

Covers a wide area: - it covers a very wide area in most cases it is a nationwide. The
introduction of private radios has enabled all major towns in Uganda to have their own radios.
Broadcasts in different languages: - advertisement can be conveyed in different languages
which benefits every clan and social class of people.
It favours all societies: - it is good for both literate and illiterate societies. So it does not call for
reading or writing.
It is fast: - it saves time and it is effective. Messages are received as soon as they are sent. It
does not call for delays in processing, posting etc.
Explanations are possible: - Radio messages are always clear, since they give all details. Such
messages are run over and over again for some time.
Corrections can be made, it can be corrected immediately; unlike written message which may
take time.
Radio advertising is cheaper than news paper hence affordable by many people.
Radio is a personal advertising medium, because station personalities have good rapport with
their listeners, when they announce your commercial, it is equivalent an endorsement.
Radio advertising can be used to support your printed advertising e.g. you can inform your
potential customers that, see our advert in the daily monitor”.
Radios cover a wider geographical area at the same time because they have a wider usage
compared to new papers and magazines
Radio caters for even the blind people unlike newspapers.

Disadvantages of radios in advertising

Favours radio owners:- Only people with radio sets are reached. Those areas where radio
waves cannot reach will not get the message.
No visual element:- The sense of seeing doesn’t prevail like it is the case for T.V.
The youth may not respond/listen to adverts:- Many people with radios especially teenagers
do not listen to commercial programmes. They only prefer music to detailed advertisements.
No reference:- a radio can not store information, once a message is sent on radio, it is gone.
If a person is not physically present, he will miss the message.
Limited languages used:- languages used to advertise on radio are limited. There are many
languages spoken in Uganda, so all of them cannot be used on radio because of limited time.
It is costly:- it is expensive to advertise using radio. Radio advertisements need to be
repeated ove r and over again so that they can be effective and this makes is costly.
They exaggerate information concerning products:- radio advertisements tend to
exaggerate by using many persuasive words which may encourage a person to buy or attend
to a service which does not conform to standards.
There are so many radio stations and therefore the total listening audience for any one radio may
be small.
People do not listen to the radio all the time but only during certain times of the day. E.g.
morning hours, news hours and late evening.
You can not review a radio commercial, if it plays and you fail to capture the entire message, you
can not go back and hear it again.
Commercial costs are much higher during drive time. Drive time is the time when people driving
to or from work i.e. 6:00 am- 10:00am and 3:00pm – 7:00pm.
Radio adverts do not give detailed message about the business or product it can only sell one
or two ideas almost about the product
TELEVISION
This is a medium used to show slides and short films displayed on the screen about a particular
product or business being advertized.
Or
This is a medium of advertising where advertisements are brought to the notice of the viewer and
listener in a short time. In Uganda the television channels used in advertising commodities
include:- Uganda Broadcasting television, WBS, NTV, Bukedde, Top T.V, Light House T.V,
NBS T.V. etc.
Television advertising is very effective because many people spend more hours watching TV per
day than paying attention to any other medium. However it is an expensive medium.
Advantages of television advertising
It is fast:- Time taken is short and messages are effective. Advertisements on television are
always up to date as they are relayed as soon as they arrive.
Favours all societies:- it is desirable for both literate and illiterate societies. Television does
not require reading and writing, but seeing and listening which is good for both literate and
illiterates.
Visual reception:- messages can be receive visually. This makes the message clear as the
sense of listening is backed –up by that of seeing.
Covers a wide area: - it can cover a relatively wide area. Televisions cover all those areas
with transmission waves hence the message reaches a wide area.
Immediate reception: - messages are received immediately they are sent. There are no
delays involved and this encourages the listeners to respond to the goods advertised
immediately.
It reduces many people at the same time than some newspapers. This increases the publicity of
the community.
Advertising on television gives the product instant validity and prominence.
Each given television audience is larger than that of any radio because there are fewer TVs
stations in any given area than radio stations. This enables you to reach a large and more diverse
audience.
You can easily reach the audience you have targeted by adverting on TV. E.g. children can be
reached during cartoons programming, the working population, during afternoons etc.
Television offers the greatest possibility for creative advertising. This is because with the
camera, you can take your audience any where and show them almost any thing.

Disadvantages of television advertising

Benefits only those with T.V sets:- It is limited to a few who have televisions. Televisions
are relatively expensive and can not be afforded by all people.
Limited to few who have televisions: - televisions are relatively expensive and can not be
afforded by all people.
Less detailed information: - information given is usually not enough compared to
newspapers. Some of the features of a product may go unexplained.
 Limitation in transmission: - television transmission is limited to particular geographical
distances. Most areas especially those in hilly or mountainous regions are not reached.
It is costly:- costs of advertising on television are high. This may not be afforded by small
businesses and hence leaving it to a few rich businessmen.
No reference in case of need: - once a message is seen it is forgotten. There is no room of
reference; one must be present to benefit from television advertisements.
Does not favour the blind: - it is not desirable for the blind. Most of the messages require
seeing hence it is good for only those who can see.

It is more expensive than the other media of adverting

The massage comes and goes, the viewer can not see your commercial again unless you buy
more placements.
TV adverts do not adequately serve the blind because they can not see the product being
advertised.
Television transmission does not cater some areas, thereby leaving out people in those areas.

NEWSPAPERS

News papers, this is where the message about the business products and illustrations are
printed on papers in black and white or colour
The print quality of photographs in news papers is often not good.
These may be published on daily, weekly or monthly advertising products either locally or
nationally and internationally. Newspapers in Uganda New vision, Daily monitor, Observer,
Bukedde, the voice, E-top, Orumuri etc.

Advantages of using Newspapers in advertising

Affordable: - they can be afforded by many people since they are less expensive and hence
the message becomes effective.
Wide circulation: - they are easily circulated. A newspaper bought by one person can be
read by many people and they are sent to many countries.
Reference is assured: - An advertisement in a newspaper can stay there permanently, so it
cannot easily be forgotten. Anytime a person reads the newspaper, the message will be
received.
Wide coverage: - newspapers have both local and far coverage within a country and
beyond.
Publication in different languages: - Newspapers are published in different languages and
this favours all those people who can read in all languages used.
Favours the deaf and dump: - it favours those who can read i.e. both the deaf and dump
since it involves seeing and reading only.
In case of production changes you can easily insert a new advert on short notice.
They offer a variety of advert sizes. This means that even if you don’t have a lot of money you
can still place a series of small adverts without, making a sacrifice.
A news paper advert can contain details such as location, prices, contracts etc.
A news paper advert can be examined at one’s leisure time.
You can reach certain types of people by placing your advert in different sections of the news
paper.

Disadvantages of using Newspapers

Ignores the illiterates: - it is only good for literate societies. People who can not read may
not benefit a lot from newspapers advertising.
Caters for urban centres: - newspapers are mostly found in urban areas and very few reach
remote areas. So a product demanded by rural people may not be effectively bought if
advertised in newspaper.
It is costly: - Newspapers can be afforded by few people. It requires one to buy a newspaper
daily which is quite expensive.
Published in limited languages: - Newspapers are found in limited languages
There is no assurance tat who ever buys the news papers reads advert.
Your advert competes with other adverts for the reader at tension
The page size of the newspaper is large and small advert can look tiny.
News papers are usually read once and thrown away.
News papers are usually read once and thrown away. nsidered to be with a big following

MAGAZINES
These are published commonly on monthly basis to advertise products to a selected type of
readership. They contain a wide range of information both for adults and the youth e.g. Trust and
drum appeal to teenagers, bridal appeals to women etc.

Categories of magazines
Trade magazines- Publications that go to certain types of businesses and industries
Consumer magazines- Publications generally found on the average news stand.
Differences between magazines advertising and news paper advertising
Magazines are usually weekly or monthly publications instead of daily.
Advertising messages are more image oriented and less price oriented
The quality of the pictures and paper are superior to news print.
Magazines adverts involve more colour than news paper adverts.
Because magazines adverts are not immediate, they take more planning e.g. an advert for a
monthly magazine as to be prepared at least a month in advance of the publication.

Advantages of magazines
Widely circulated: - They are widely circulated both domestically and internationally.
Pictures are coloured: - they are desirable where provision of colours is concerned hence
they are attractive.
Record of reference: - Adverts can be stored for quite a considerable period in a magazine.
Disadvantages of magazine
Costly: - They are more expensive as compared to newspapers therefore few people can afford.
Limited language: - They are mainly in foreign languages neglecting local languages.
Exaggerative: -Magazines tend to be more persuasive than informative thus they promote
impulse purchase.
Promote immorality: - some magazines carry immoral pictures, which may be a problem to
the teenagers e.g. spice, onion etc.

OUT DOOR ADVERTISING

This involves all advertisements displayed outside shops, on tree trunks, outside stadiums, on
walls of buildings, on bus stops, cinema halls; streets etc. e.g. include posters, signposts, neon
signs and banners.
Posters
These involve all paper advertisements hanged up for displays. They are attractively designed
which encourage people to read them.
This is commonly used to advertise products of low price range and only of interest to low-
income earners.
Sign posts: - These are permanent in nature and are designed on wooden or metal materials and
are displayed in strategic places alongside roads.
Banners: - These are in form of clothes, plastic materials bearing the message advertised. They
are effective when displayed in areas where many people pass by.
Neon signs: - These are normally hanged outside shops and are lighted at night so that the
message can be read both during the day and night. This medium is very expensive both in initial
coast and maintenance.
ADVANTAGES OF OUT-DOOR ADVERTISING
They are displayed at a low cost.
They have a wide spread coverage.
They are successful especially in densely populated areas.
They are available to all those in the area where they are displayed.

Out door advertising reaches its audience because people can not switch it go or throw it out like
for the case of news papers, radios, TV.
It fulfills the advertising principles of frequency. This is because the message stays in the same
place for along period time and therefore the people who pass by see the message for a number
of times.
It is most effective when used together with other media.
Particular locations can be acquired for certain purposes e.g. You can put a bill board in
front of your business to direct people to your showroom.
DISADVANTAGES OF OUT-DOOR ADVERTISING
It is limited to given geographical areas.
They are desirable for only literate markets.
They are affected by heavy rains especially posters and banners.
Installing and maintainingneon-signs is too costly.
Disadvantages of out door advertising
It is a glance medium i.e. It only draws very little (2-3 seconds) of a reader’s time.
Messages must be brief to fit 203 second time frame.
It is not conducive to very short advertising campaign.

Exhibitions and Trade Fairs

This is where producers display their products to potential buyers. Trade fairs are usually held in
large towns and important areas in the country. Uganda Manufacturers Association (UMA)
always holds trade fairs at Lugogo and farmers have theirs at Jinja agricultural show ground.
Advantages of trade fairs
They attract many buyers both domestically and internationally.
 Physical goods can be visually seen on display.
Producers can be able to contact prospective buyers physically.
Disadvantages of trade fairs
They are undesirable for the blind.
They are limited to very few areas.
They are in most cases temporary.
They are expensive to organize.
WINDOW DISPLAY
This is the attractive arrangement of goods in glass windows of shops in such a way to attract
passer-by customers who window shop and plan to make purchases at a later date.
Advantages of window display
It leads to window shopping which influenced the buyer’s mind to the commodity.
It is not costly to arrange goods on display in the shops.
The prospective consumers are able to see the advertised products physically unlike radio
or newspapers.
Disadvantages of window display
Windows glasses are expensive to buy and install.
The blind persons can not benefit from this form of advertising.
The breakage of glasses may cause injuries to the passer-by.
DIRECT MAIL ADVERTISING
This involves the use of catalogues, circulars, pamphlets, brochures, trade journals and post cards
to convey the advertising message to a particular audience.
It is mainly used in mail order business where suppliers send catalogues to potential customers.
This normally takes place in reply to letters of inquiry and it provides the necessary information
about the goods, terms of sale and terms of payment.
Business directory
A business directory is a book containing telephone numbers and other contacts of different
business. This allows you to place your advert in selected classifications within the book, when
people need your product, they will look into the classification and contact you.
Advantages of business directory advertising
• One advert works for along period of time.
• Can help you to describe the difference between you and your competitors.
• It makes it easy for potential customers to locate your business and contact you even if
they did not know you initially.
Disadvantages of business directory advertising
 • Your advert is placed with a group of your competitors and this makes it easy for the
prospects to compare.
• You must commit to an entire year of advertising.
• It is only effective if a prospect knows the correct classification tom look you up.

Other advertising media are;

• Direct mail advertising
• Internet advertising
• Specialty advertising – it involves give a ways e.g. calendars, stickers, pens etc.

ADVANTAGES OF ADVERTISING TO THE CONSUMER

It educates the consumers by informing them of what commodities are available for sale.
It helps consumers to quickly get what they want to buy thus saves time in buying.
It informs the consumers about the price, quality, size etc of the product.
It explains the use and value of the products to the consumer.
It enables the consumer to compare prices and other features of different products so as to
make a better choice/a variety of goods.
It leads to competition among trader/producers thus leading to better/improved quality of
goods and services thus reduction in prices.
It increases the consumers’ awareness about the changes in prices and other offers on the market.
• It creates awareness of the availability of the availability of a product to the customers
and potential customers.
• It helps in increasing the sales of your product.
• It creates brand awareness in the public which makes the business more popular among
potential buyers.
• It increases the profits of the business through increasing it revenue.
DISADVANTAGES OF ADVERTISING
Expensive:- The cost of advertising increases the prices of goods thus items become
expensive.
Leads to impulse buying:- Consumers may be tempted to make unplanned purchases due
to intensive advertisements.
Some advertisements are misleading:- Misleads consumers because of the intensive adverts
i.e. Deceitful or some goods are inferior of poor quality.
Difficulty in choice of goods:- Persuasive advertisement may make the choice difficult for
consumers.
Consumer exploitation:- intensive advertisements create monopolies leading to consumer
exploitation in form of high prices and this limits output.
 Brand loyalty:- Advertising may lead to brand loyalty which may result into exploitation
of consumers.
Creates immorality:- Some advertisements may have negative effects on morals of society.
Conceals negative effects:- Advertising points out only the positive effects of product and
the negative ones are left out e.g. adverts for beer and cigarettes do not point out the harmful
effects.
Living beyond their means:- Consumers may be forced to live beyond their means because
advertisements induce them to borrow to buy what they can not afford and makes
consumers to live in a superficial life.

Preparing an advertising message advertising message should include.

• The appeal- the underlying idea that captures the attention of a massage receiver.
• Value proposition- a reason for customer to be interested in the product. The benefits one
obtains from using the product.
• Slogan-word or phrase that in repeated across several different messages and different
media outlets. It helps to position the product in a customers mind and to distinguish it
from those of the competitors.
Factors to consider when selecting an advertising medium
The social class to which the medium appeals e.g. newspapers are effective for ordinary
people while television appeals to the well to do people and magazines appeal to elite class
and teenagers.
The age group to which the medium appeals:- Magazines, cinemas and T-shirts appeal to
teenagers but radio and newspapers appeal to mature class of people.
The geographical area covered by the medium:- Newspapers or radio have countrywide
appeal, while posters and cinemas have a more local appeal.
The cost of advertising through the medium:- More expensive products can be advertised
through television, the press and radio while relatively cheap products can be advertised
through posters and direct mails.
The economic group to which the medium appeals:- Machinery can be advertised through
specialized journal to the well to do professionals.
The number of people reached by the medium:- Newspapers reach more people than
magazines yet the radio reaches more people than television.
The purpose of advertising campaign:- if the aim is to announce a sale at a local store, use
a local newspaper or radio, but if the aim is to explain the use of a technical product, then
television or cinema show will suffice.
Availability of the medium: - advertisers use means which are in their reach or readily
available than those means which are non-existing. A trader near a radio station uses a radio
instead of travelling long distances to place adverts with newspapers or television.
 Speed and urgency of the information: - Urgent information of goods or services in the
market are advertised in the fastest media like the radio and television while magazines, trade
fairs and exhibition tend to take long.
Ability of the medium to each the intended market audience: - religious magazines are
suitable for religious people yet medical journals appeal to doctors and the accountants’
newsletter for the accountants.
The nature of the product being advertised: - technical items such as computers are
better advertised through television or brochures.

Distribution channels for goods and services

A distribution channel is the method that a company uses to get its products into the market place
for consumer use.
Every entrepreneur prefers a channel that can distribute his/ her products to the right customers
at the right place, time and cost.
• Direct distribution. The entrepreneur sells his / her products directly to consumers. It is
also known as short channel, direct selling.
• Retail distribution. In this channel the entrepreneur sells products to retailers and
retailers sell to the consumers.
• Whole sale distribution. In this channel the entrepreneur sells the products to the
wholesaler in large quantities who in turn sells to retailers in relatively smaller quantities
and retailers sell to the final consumers. It is the traditional channel in distribution of
products.
• Marketing and selling agents, here the entrepreneur employs agents to sell products on
his / her behalf and he pays them a commission depending on the value of the amounts
sold.
NB. The channel chosen determines the price of the product i.e. The longer the channel the
higher the price of the product to the final consumer and vice versa
The above channels give rise to the marketing flow chart.
Factors considered when selecting a distribution channel for products.
Selection of a distribution channel refers to choosing among distributors, agents, franchisees etc.
It is important for an entrepreneur to select the right distribution channel from his / her product.
In this case the entrepreneur is required to compare the costs, sales, volume and profits expected
from the alternative distribution channels. The following are the factors to consider:-
• Nature of the product, perishable and expensive products eg milk, vegetables, gold
products, cars etc require a direct / short distribution channel
 • Cost effectiveness of a channel, a less costly channel is most preferred by an
entrepreneur in order to maximize profits to an expensive one.
• Reliability of the channel, a channel that can avail goods to customers when needed is
preferred. This encourages repeat purchases among customers.
• Nature of the business being operated financially strong business may use direct
selling because they have the ability to sue the necessary marketing techniques which can
attract customers to the product and vice versa.
• Location of the target customers. If customers are near a direct channel is better to
reduce the distribution costs and vice versa if the customers are far from your business.
• Desire by the producer to have control over the distribution of his/ her product. In
this case a direct channel will be preferred but in case of no desire to have control over
the distribution of products, there channels can be used so as to supply good to various
customer in different regions.
• Degree of completion, if an entrepreneur works in a highly competitive environment,
he/ she needs to use a long channel which can distribute goods to a wider market
(different areas) in order to increase the market share and the reverse is true.
• Nature of market. Direct selling would be preferred when the market is small and
located with in a narrow area. If the market is big and geographically scattered then the
long channel can be used.

Personal selling/ creative selling /salesmanship

This is a situation where a team of sales persons is employed to sell products directly to
customers with a view of increasing business sales.
Steps of creative selling process
This process is made up of eight steps and each of these steps is important if you are to realize
an effective selling. They include;
Prospecting, this means locating the customers/prospects. Prospects are people or firms that are
likely to buy the business’ products. In this case therefore an entrepreneur finds out where to go,
who to see and what to do and say
Types of prospecting
New customer prospecting. This involves approaching a person that you think may need your
product.
Regular customer prospecting, here a sales person makes a call to regular customers on a
periodic basis to tell them about the products. For this to be effective, it should not be so
frequent.
Pre-approach, in this step, an entrepreneur gathers information about his/her own products and
the products of his/her competitors and the prospective customers i.e. establishing customers
personal information about age, preferences, interests, income etc. This helps the entrepreneur to
sell products that meet his/her customers’ needs
Approaching /making an initial contact, at this stage, an entrepreneur or sales person introduces
his/her self, reveals the purpose of the visit and the product he/she is selling in a polite way. This
is because the first ten words used are more important than the next thousands of words. This
step aims at creating a good impression and to win the customers interest in the product. The
entrepreneur or his/her sales person should open with a smile and where possible with a hand
shake and self introduction.
Presenting of the product, at this stage the sales person presents the product to the customer
and describes its features benefits etc briefly in order to gain customer attention and develop
interest in the product.
At this step, the sales person should ;
Tell a customer the benefits of the product.
Involve the customer i.e. allowing a customer to try the product e.g. putting a necklace, watch or
suit etc.
Limit the choice / alternative to almost there you should not display very many pieces or
alternative because the customer may either lose interest or fail to make choice.
Be creative in the way he/ she presents the products to the prospects customers (s).
Decide on the information needed to tell to a particular customer and how that information
should be presented to the customer.
Handling objections, this involves clearing all doubts that may have been created during
presentation. These have to be cleared because they can lead to objection of the product. At this
stage the sales person or entrepreneur should not lose temper and instead he/she should give a
testimony about the product, give guarantees, be polite, patient etc a sales person should never
get tied of questions but instead encourage customers to ask more questions. The sales person
should be guided by a belief that ‘the customer is always right no matter how wrong he may be’
Avoid the following statement when a customer refuses to buy.
I knew you don’t have money to buy this product and in any case you can not afford it.
Next time do not waste my time if you know you will not buy.
Try else where this is not your class.
Closing the sale, here the sales person helps the customer to make the buying decision. Example
closing techniques that can be used.
May I reserve one unit for you?
Offer a service e.g. let us deliver it to you this afternoon or tomorrow etc. a “yes” means a
purchase.
Give a choice e.g. What color do you prefer?do you want a grey or black ? Either choice implies
a purchase.
Offer an incentive e.g. if you buy now I give you a discount to say 20%.
Better not wait e.g., if you want this product better get it now because it is the only piece
remaining in stock. In this case you need to be honest, do not lie to a customer.
Making suggestion selling. After a customer as bought a product do not stop there suggest any
other possible additional product related the one e has brought. Business sales normally increase
through positive suggestion selling e.g. if a person buys a shirt, suggest a tie.
Making post sale follow up, this refers to the activities under taken to ensure that the customer
is satisfied with the product and the business. These activities include thanking a customer for
shopping at your store.
Checking on anything that was promised to the customer after the sale e.g. if promised.
Promised to deliver the goods to the buyer’s premises, please endeavor to do so if there is any
problem, and notify him / her.
Post sale follow up builds good will and repeat business or purchase.
Ways of achieving creative selling
Creative selling should be achieved through;
•Making strong points about the product right from the beginning of the
presentation
• Mentioning more of the benefits of the product than its features e.g. this shoe is
comfortable and durable instead of saying that it’s a leather shoe
• Giving the customer complete attention
• Involving the buyer in the discussion or conversation
• Listening to a customer to make him/her feel important and to understand his/her
needs
Advantages of a creative selling process
• It helps an entrepreneur to develop good relations with his /her customers
• It helps an entrepreneur to gain quick feed back about his/her goods and
services as well as suggestions for improvement
• It enables the entrepreneur through the sales person to deal directly with
the customers. This enables the entrepreneur to meet the customers’ needs
as well as increasing the sales of the product
• It helps an entrepreneur to have a wide market coverage by employing
sales persons in various geographical areas
• It makes the buyer gain confidence in the product
 • It provides technical assistance to customers on how to use and maintain
the product
• It enables customers to get genuine products
• It plays a big role in removing ignorance and doubts about different
aspects of the product
Disadvantages of the creative selling process
It is expensive since it involves paying the sales persons
Sales persons become very tired at the end of the day

BUSINESS COMPETITION
This refers to the battle between businesses to win customers’ acceptance and loyalty. An
entrepreneur should undertake the right competitive strategy in order to become successful in the
market.
Types of competition in business
• Monopoly, this exists where there is only one seller/producers of a commodity without a
close competitor e.g. UMEME, NWSC etc.
• Perfect competition, this exists where there are many sellers/ producers of a similar
product and many buyers.
• Monopolistic competition, this exists where there are several/many sellers/producers of
similar but differentiated products.eg bread firms, tooth paste firms, detergents firms etc.
• Oligopoly, this exists where there is a small number of sellers/producers of products which
are either similar or differentiated. Businesses experiencing this competition include
telephone network firms, tissue firms, petroleum firms etc.

TECHNIQUES/ WAYS OF WINING COMPETITION

These are the various ways of attracting more customers to buy an entrepreneurs cope with
competition in the market. They include;
• Charging cheaper/ affordable prices for goods and services than those charged by the
competitors i.e. competitive pricing.
• Producing or providing high/ better quality products to attract more customers.
• Ensuring good presentation and appearance of a variety of aspects related to the businesses
that attract customer’s attention e.g. attractive packaging of the products, decency of the
sales personnel, attractive layout/ display etc.
• Ensuring added convenience to the customers e.g. opening the business early and closing
late i.e. serving customers in times when your competitors businesses may be closed e.g.
during lunch time or even public holidays.
 • Treating the customers with respect more than the rivals e.g. avoiding arguing with a
customer. This can be done by adopting the attitude that a customer is always right no
matter how wrong he/ she may be.
• Rewarding loyal and regular customers e.g. giving them gifts etc.
• Offering credit to loyal and credit worthy customers.
• Communicating regularly with customers i.e. communicating to them major changes in the
business, availability of new products etc.
• Providing appropriate after sales services to customers eg offering delivery services etc.
• Advertising both informatively and persuasively.
• Using attractive branding, giving a product a name that distinguishes it from the competing
products.
• Using attractive packaging of the products to catch the attention of the customers.
• Using unique sizes/quantities /weight of the product to meet the needs of different
customers high land packs 650mls of water while Rwenzori packs 500mls. This makes
most people to go in for high land.

FACTORS TO CONSIDER WHEN ANALYSING COMPETITION

1. Size of competition, this involves finding out the assets and sales volume of your major
competitors. This will help you to know whether you are going to compete with businesses
with similar size or with bigger enterprises.
2. Profitability of your competitor, low profits earned by the competitors mean high
competition while high profits of competitors mean low competition.
3. Operation methods, operating for long hours, improved quality, fair prices etc. mean
existence of high competition while absence of such means low competition.
4. Level of advertising, intensive advertising means stiff competition while absence or low
advertising means low competition.
5. Level of customer care, high level of customer care signifies presence of stiff competition
while absence or low levels of customer care show that there is low competition.
6. Nature of packaging, attractive packaging by competitors means stiff competition while
absence of it means low competition.
7. Description of competitors, this involves identifying and characterizing the business
which are competing with you, if they are bigger than you then competition is high and
vice versa

FACTORS AFFECTING COMPETITION

Competition is easily noticed among businesses that deal in similar products and located near
each other. Business competition is affected by the factors below;
• Mobility and accessibility overlap; distance plays an important role in competition.
Businesses that are located near each other experience high compete with each other.
While competition between businesses located far away from each other experience
 relatively low competition. However with improvement in transporting goods over
long distances makes businesses compete with businesses located far away.
• Product overlap, favorable product overlap minimizes competition between or among
different firms that deal in similar or identical products. For instance, when a big
supermarket combines with a grocery store, boutique and stationery shop to provide a
one stop shopping Centre for consumers’ needs competition reduces while absence of
this creates competition among firms for consumers.
• level of substitution, stiff competition exists among businesses that deal in similar
products(substitutes)e.g. restaurants compete for a share of the public who eat in
restaurants, transport companies compete for a share of those who need travelling while
absence of close substitutes leads to low competition.
• Public awareness, presence of perfect knowledge of the prevailing price of the product
in the market leads to high competition while consumer ignorance leads to low
competition.
• Product priority, whenever there is limited money for everything, there is high
competition for product priority while presence of high disposable incomes among
customers leads to low competition for product priority.

SUSTAINABLE COMPETITIVE ADVANTAGE

This refers to an advantage that a firm has over its competitors. OR an advantage that enables
a business to survive against the competitors over a long period of time.
This allows the maintenance and improvement of the business competitive position in the
market.
There is need for stronger and more efficient business operations for better chances of
surviving competition.

WAYS OF MANTAINING A COMPETITIVE POSITION IN BUSINESS

• Advertising, this helps to attract the public’s attention and build priority for one’s
product.
• Creating a good business image, the way customers are treated, the location of the
business, dressing code of the workers all contribute to good image of the business and
these enable a business to compete effectively.
• Ensuring customer convenience and services, good location and service have a great
influence on competition. The services that can attract customers to buy your product
include; repair services, delivery services etc.
• Using competitive pricing, this involves pricing your products in relation to the price
of the competitors. In this case avoid charging a price below your costs of production
because it will lead to losses which will reduce your competitive advantage.
• Providing sales prices, this involves reducing prices of some items during certain
seasons. This is intended to attract new customers to come for those products and end
 up buying other items which are sold at regular prices. In this case the sale prices should
not be too low, because it may lead to losses.
• Everyday low prices, in this case a business sets up a standard policy of competitive
pricing at all times without advertising specific sales.
• Offering money back guarantees to customers i.e. allowing customers to return
products in case they are not satisfied with the products.
• Ensuring product differentiation especially in markets with several/many
sellers/producers producing similar goods or services. Identifying customers’ in
terms of where they stay, their age income levels, needs in terms of price, quality and
quantity.
• Defining business competitors in terms of their strengths, weaknesses,
opportunities and threats, products, customer base, profit margins promotional
and marketing strategies etc.

EVALUATING BUSINESS COMPETITION

Whenever you come up with a business idea, just know that there are other people who may
come up with the same idea. When this happens, it marks the beginning of competition for
you.
Therefore, when monitoring changes and competition in your business, ensure that the
following aspects are carefully put into consideration;
• Flow of customers into the business per day is always affected by competition.
• Production orders, these may reduce due to competition.
• Cash flow may be affected by competition.
• Technology, businesses that have modern machinery and knowledge are more
competitive than those without dated technology.
• Personnel/ workers, these may abandon non competitive firms and join other firms
which are more competitive for higher payments and other benefits.
EFFECTS/ IMPACTS/ IMPLICATION OF COMPETITION IN BUSINESS
Positive effects
• It leads to improvement in the quality of the products.
• Helps employees to be paid well, competition forces employers to pay their highly
skilled workers well for fear of being taken away by the competitors.
• Leads to more efficient production, competition forces entrepreneurs to look for
methods of production that are efficient i.e. use less raw materials to produce more
output.
 • Leads to better customer satisfaction, entrepreneurs are forced to produce goods/
services that give customers maximum satisfaction in order to encourage them to
remain loyal to them.
• Competition encourages entrepreneurs to work hard in order to excel and enjoy self
esteem.
• Leads to production of a variety of products which increase customer’s choice hence
improved standards of living.
• Leads to enjoyment of free services, samples etc. by customers.
• It leads to reduction in prices of products as entrepreneurs struggle to attract customers.
• It leads to improved services delivery.
• Leads to mass production especially where there is free entry of firm.

Negative effects
• It increases the cost of business operations i.e. makes resources to become more
expensive.
• Leads to reduction in market share due to a large number of competitors.
• It leads to reduced morale/self esteem for those entrepreneurs who lose out.
• It lowers the profit of the business due to reduction in the volume of sales which limits
expansion.
• Sometimes it misleads customers through entrepreneurs using persuasive advertising.
• Results into unemployment due to collapse of inefficient firms.
• Leads to limited research due to reduced profits. This leads to reduced innovations and
inventions in the business.
• Leads to increase d labour/employee turnover i.e. employees tend to move from one
firm to another hoping to get better rewards.
Revision questions
1(a) Explain the different types of competition in business.
(b) What are the techniques of wining competition?
(a) Define the term sustainable competitive advantage
(b) In which ways can a competitive advantage be maintained in business?
(c) Explain the factors that affect competition in business.
3(a) Explain the factors that are considered when analyzing competition in business
(b) Assess the impact/implication of competition in business