THE EFFECT OF MARKET SEGMENTATION AND POSITIONING ON COMPANY PERFORMANCE (A CASE STUDY OF NIGERIA BREWERY PLC, ENUGU)
ABSTRACT
This project is on the “effect of market segmentation. Using Nigeria Brewery plc, Enugu as a reference study. The main objective of this study is to ascertain the role of segmentation in the marketing of the company’s products. In the course of seeking for information, primary and secondary data were used. The methods employed under primary data collection include personal interviews and questionnaires distribution. The respondents to these questionnaires include potential and actual consumers, relevant staff and management of the case organization as well as the distributors. The population of the study include; the relevant staff and management of NB Plc, Enugu, potential and actual consumers within the metropolis, as well as the distributors. In order to determine the sample size, the researcher used “pilot survey” for potential and actual consumers and the distributors by employing “Bourley’s” formula for consumers because the population is known and “Topman’s” formula for the distributors since population is unknown. While census was used for relevant staff and management of NB Plc, Enugu because the population is known and not too large. The sampling techniques, used was simple random sampling techniques for picking the distributors, while census of relevant stall and management were conducted. The major research instrument used for the study were: questionnaire and personal interview. In constructing the questionnaire, the researcher employed Dichotomous question (Yes/No) and multiple questions choice. The data collected from the respondents through questionnaires were analyzed using tables, percentage statistical tool and chi-square method was used in testing the hypothesis because the topic under study is a relationship type (i.e not a comparison topic). From the investigation, it was found out that there is a positive relationship between market segmentation and consumer patronage of NB Plc products. It was also found that market segmentation lead to increased purchase decision. On the findings, the researcher therefore made the following recommendations:. First that some effort should be made by the organization to ensure efficient and effective segmentation strategy. The researcher also recommends that the company’s should select some segments that are potentially viable and satisfy them to the full. The researcher concluded by saying that market segmentation strategy must be able to satisfy the market segments and target markets appropriately. It must also meet certain standard if it is to be the focus of a marketing effort its size and purchasing power must be substantial to promote a profitable returns.
TABLE OF CANTENTS
Title page-- -- -- -- -- -- -- -- -- i
Approval page -- -- -- -- -- -- - -- ii
Dedication -- -- -- -- -- -- -- -- iii
Acknowledgement -- -- -- -- -- -- -- iv
Abstract -- -- -- -- -- - -- -- -- v
Table of contents -- -- -- -- -- -- -- vi
List of tables -- -- -- -- -- -- -- -- x
List of figures -- -- -- -- -- -- -- --
CHAPTER ONE: INTRODUCTION
1.1 Background of the study -- -- -- -- -- 1
1.2 Statement of the problem -- -- -- -- -- 4
1.3 Objective of the study -- -- -- -- -- 6
1.4 Research Questions -- -- -- -- -- 7
1.5 Significance of the study -- -- -- -- -- 9
1.6 Scope of the study -- -- -- -- -- -- 10
1.7 Definition of Terms -- -- -- -- -- -- 11
1.8 Limitations of the study -- -- -- -- -- 13
CHAPTER TWO: LITERATURE REVIEW
2.1 Meaning and scope of segmentation and positioning 14
2.2 Objectives of market segmentation -- -- -- 17
2.3 Criteria for segmentation and positioning -- -- 18
2.4 Bases for market segmentation -- -- -- 21
2.5 Process of market segmentation -- -- -- 23
2.6 Conditions for effective market segmentation -- 24
2.7 Overview of customer satisfaction -- -- -- 27
2.8 Impact of market segmentation on customers
satisfaction -- -- -- -- -- -- -- 30
2.9 Types of market segmentation and positioning -- 31
2.10 Segmentation in Nigeria Breweries Plc, Enugu -- 32
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Sources of data -- -- -- -- -- -- -- 34
3.2 Population of the study -- -- -- -- -- 35
3.3 Sample size determination -- -- -- -- 35
3.4 Sampling method -- -- -- -- -- -- 38
3.5 Research instrument used -- -- -- -- 38
3.6 Validation of research instrument -- -- -- 38
3.7 Method of questionnaire administration for
Distribution -- -- -- -- -- -- -- 39
CHAPTER FOUR: ANALYSIS AND INTERPRTATION OF DATA
4.1 Data analysis and interpretation -- -- -- 43
4.2 Test of hypothesis -- -- -- -- -- -- 61
CHAPTER FIVE: DISCUSSION OF FONDINGS, RECOMMENDATIONS AND CONCLUSION
5.1 Summary of findings -- -- -- -- -- -- 75
5.2 Recommendations -- -- -- -- -- -- 76
5.3 Conclusion -- -- -- -- -- -- -- 78
Bibliography -- -- -- -- -- -- -- 80
Appendix -- -- -- -- -- -- -- -- 82
LIST OF TABLE
Table 4.1:Determination of Response Rate Questionnaire Distribution and Collection - - - 43
Table 4.2:Consumers’ Responses as to whether they buy NB Plc products - - - - - - 44
Table 4.3:Consumer’s Responses on what kind of NB Plc products they buy.- - - - - 45
Table 4.4:Consumer’s Responses as to whether they are satisfied with the quality of NB Plc products 45
Table 4.5:Consumer’s Responses as to whether they are satisfied with the price of NB Plc products. 46
Table 4.6:Consumer’s Responses as to whether they are satisfied with the market segmentation being practiced by NB Plc. - - - - - 47
Table 4.7:Consumer’s Responses as to whether market segmentation of NB Plc lead to increased customer patronage of their products - - - 48
Table 4.8:Consumer’s Responses sex - - - 48
Table 4.9:Consumer’s Responses Age - - - 49
Table 4.10: Consumer’s Responses marital status - 50
Table 4.11: Consumer’s Responses occupation - - 50
Table 4.12: Personnel responses as to whether they are staff of NB Plc - - - - - - - 51
Table 4.13: Personnel responses on how long they have been working with the organization - - - 52
Table 4.14: Personnel responses as to whether market segmentation of NB Plc Enugu increase purchase decision. - - - - - - - 53
Table 4.15: Personnel responses as to whether market segmentation strategy of NB Plc lead to increased profitability of the organization- - - 53
Table 4.16: Personnel responses as to whether market segmentation being practiced by NB Plc, lead to increased sales volume - - - - 54
Table 4.17: Personnel responses as the bases used by NB Plc in segmenting its markets - - - - 55
Table 4.18: Personnel responses on why NB Plc segment its markets - - - - - - - 56
Table 4.19: Distributors’ responses as to whether they distribute NB Plc products - - - 57
Table 4.20: Distributors’ responses on the kinds of NB Plc products they distribute - - - - 57
Table 4.21: Distributors’ responses as to whether market segmentation affect the distribution of NB Plc Products.- - - - - - - 58
Table 4.22: Distributors’ responses on whether they are satisfied with the trade deal NB Plc offers to them 59
Table 4.23: Distributors’ responses on how they rate the demand for NB Plc products in Enugu metropolis 60
LIST OF FIGURES
Figure 2.1: Customer Purchase decision Process -- 29
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
In this modern and dynamic world, marketers look at the over all markets as a body consisting of numerous smaller parts whose elements have prevalent (common) attributes.
They are mostly distinct from the entire market. For marketers to penetrate into market, the total market must be divided into segment or division being the same of needs and wants or behaviours.
This therefore effect to designing its own program, which will be developed for its best satisfaction.
Adirika, et al (1996:40), noted that most markets are too large for an organization to market.
According to Edoga and Ani (2000:18), market segmentation is defined as the process of dividing the total market into several relatively homogenous groups with similar product interest. This process according to them requires marketers to identify factors that affect purchasing decision so that consumer can be grouped accordingly.
Adirika et al, (1996:30), see segmentation as the subdividing of a heterogeneous market into homogenous subsets, groups, of customers so that each subset can conceivably be selected as a separate market target to be reached with a distinct marketing mix. They further stated that in practicing segmentation, and consequently target marketing, organization endeavour to serve target markets that they are able to satisfy efficiently and effectively, and not just any group of buyers that seems to represent a sizeable market. These include the marketing of drinks.
Adirika, (1992:219), believes that the battles for the mind and pocket book of the customers will be won by block store, by purchase bases.
This strategy on the premise that customers have different tasks which change overtime and that these customers and variety (customization) every organization including brewery industry must make decision on two areas of needs:
What needs to serve?
Whose needs to serve?
Companies segmenting their market would have the benefit of positioning their firm better to spot and compare all the marketing opportunities available to her once the decision on which segment of the market to either has been made. It must decide “position” it wants to occupy in those segments.
Whatever, position the rise or fall in the sale turnover is however dependent on how well and viable the market is being segmented. The Nigeria brewery Plc, 9TH mile corner, Enugu may position its product on its quality, price or on usage occasions. In this case, the company stands in a better place to know what and how segmented market feels about its products and markets. Opportunities from a base though which the company can timer adjust on its products and marketing appeals and as a result, will increase the sales volume of the firm if the products meet the needs of the segmented market.
By using the strategy of market segmentation, a company can design products that really match the market demands.
Advertising media can be adopted more efficiently and management can develop promotional messages specifically aimed towards each segment of the market.
Furthermore, the firm can use her knowledge of the marketing response, differences of the various market segment guide the allocation of the total marketing budget and most importantly, segmentation aids the management of the firm to channel money and effort to the patent most successful segments.
1.2 STATEMENT OF THE PROBLEMS
The Nigeria breweries Plc, is a leader in beer production market in Nigeria. The company has several brands of drinks which are being market to their customers.
In order to satisfy their customers, they have resorted to segmentation.
Segmentation has been the main important tool used by the companies including the brewery industry to attain their marketing objectives. Nigerian breweries Plc is not exception. However, it has been detected by customers that Nigeria brewery do not effectively solve segment of the market. This could be attributed to lack of efficient segmentation of the market. Most often, customers who go to market to purchase Nigeria brewery products find that are not readily available. The one that are available is not within the reach of the customers. Some segments of the market would need sugar free soft drinks but this is not available. All this no doubt has effect on the patronage from customers and company’s profit.
In this study, the researcher work at segmentation as a tool for Nigerian brewery Plc customer satisfaction
1.3 OBJECTIVES OF THE STUDY
Like the marketing philosophy pointed out every marketing oriented firm or organization has the primary duty of not only marketing sale for the company but for the identification of customers needs and planning to satisfy these customers needs at a profit to the firm.
For the purpose of this study, it is therefore very important to review the strategy and offerings of organization with a view of findings how effective strategy and offerings are meeting the objectives of the organization that is applying them.
In more specific terms, the objectives of this study seeks to:
- To ascertain the role of segmentation in the marketing of Nigeria brewery products.
- To determine the impact of market segmentation on increase profit of NB, Plc.
- To ascertain if market segmentation of NB, Plc leads to increased customers patronage.
- To determine if customers are satisfied with the market segmentation strategy of NB, Plc.
- To find out if market segmentation of NB,Plc lead to increased purchase decision.
1.4 RESEARCH QUESTION
For the purpose of this study, the following questions will be asked.
- Does market segmentation of NB Plc lead to increased customer patronage of their product?
- Do you satisfied with market segmentation being practiced by NB Plc?
- Does market segmentation of NB, Plc increased purchases?
- Does market segmentation of NB, Plc lead to increased profit of the organization?
FORMULATION OF HYPOTHESIS
Hypothesis is a tentative statement about the universe which may or may not be true. For the purpose of this study, the following hypothesis will be tested in NB, PLC, 9TH mile corner, Enugu.
Ho1: Market segmentation of NB, Plc does not lead to increased customer patronage of their product.
Hi: market segmentation of NB, Plc lead to increased customer patronage of their product.
Ho2: customers are not satisfied with market segmentation being practiced by NB, Plc.
H1: Customers are satisfied with market segmentation being practiced by NB, Plc.
Ho3: market segmentation of NB, Plc does not increase purchase.
H1: Market segmentation of NB, Plc increase purchase.
Ho4: Market segmentation of NB, Plc does not lead to increase profit of the organization.
H1: Market segmentation of NB, Plc lead to increased profit of the organization.
1.5 SIGNIFICANCE OF THE STUDY
Business in Nigeria today is far from being an easy endeavour because of the prevailing economic crisis in Nigeria in particular and the world in general.
As the marketing environment is ever changing, a market continue to strive perfection (Novelty) marketing which is a human/ idea oriented discipline cannot do without idea generation.
Implicitly, as more ideas and products come into being so as the problem of penetrating the target market and satisfying consumers effectively and efficiently.
The study will enable NB, Plc known how to satisfy their customers very well.
The finding of this study will also go a long way in empowering sales volume and market share of the company, this will invariably lead to an increase in general profit generalization and better revenues.
Moreover, it will help other related companies on how segmentation will help them improve on their offerings.
Finally, the study will be beneficial to customers and researchers as the findings will wider their knowledge base in research writing and as well serve to the researcher as a source of literature review.
1.6 SCOPE OF THE STUDY
The subject scope covers all aspect of market segmentation and positioning as a tool for attaining organizational objectives. While the geographical scope covers Nigeria Brewery company’s operations within Enugu metropolis.
1.7 DEFINITION OF TERMS
Certain words have been used in this research work and they need to be defined or interpreted as they are related to the research topic
MARKET: According to Ani N.B. and Nwandu E.C (2007:253), market is seen as those who are willing to buy a firm’s output and have the purchasing power to do so.
Market can also be defined as people or organizations with wants to satisfy, money to spend and willingness to spend it. (Edoga P.N. 2005:88).
SEGMENT: According to Arowomole A.K. and Adeyemi M.A. (2004:226), segment is seen as a group of individuals, groups, or organizations sharing one or more similar characteristics that make them have relatively similar product needs.
MARKET SEGMENTATION: According to Udeagha (1995:86.), Marketing segmentation is seems as a process of dividing a heterogeneous market into units that are as homogenous as possible units that have relatively similar products or service needs and that can consequently be accessed with the same marketing programmes.
POSITIONING: Positioning is the act of designing the company’s offering and image so that it occupies a meaningful and distinct competitive position in the target customers mind (Edoga P.N, 2005: 112).
MARKET TARGET: Adirika et al (1996: 39) define market target as the act of measuring the attractiveness of the different segments, and selecting one or more segments attack.
MARKETING CONCEPT: According to George and Ude-Umanta (2009: 8 – 9), define marketing concept as the concept that states that the consumers wants and the satisfaction of their needs come first and are the economic justification for the firm’s existence.
1.8 LIMITATION OF THE STUDY
BUREAUCRACY: The criteria for eliciting information in the NB Plc promises under bureaucratic nature of the form stands as major hindrance to the study. As a big company, their hierarchical structure tends to be lengthy, such that the respondents as a regards to the study were hardly met.
FINANCIAL CONSTRAINT: The economic instability of the nation has put the system in a bad shape. Capital is a major set back to the study, as a result, the study was limited only to Enugu metropolis despite the vast nature of the company.
SECRECY: In this case, the researcher had went for some couple of hours for the respondents to be changed before attending to the researcher. Using the oral interview as a method of collecting information needed about the effectiveness of the market segmentation, ignorance associated with illiteracy stood as a barrier.
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