Effect Of Market Segmentation On Performance Of Brewery Industry (Case Studies Of Guinness Nigeria Plc And. Nigerian Breweries Plc)

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Effect Of Market Segmentation On Performance Of Brewery Industry (Case Studies Of Guinness Nigeria Plc And. Nigerian Breweries Plc)


Abstract


This research project examine the effects of market segmentation on performance of brewery industry with special reference to Guinness Nigeria Plc. And Nigerian Breweries Plc.

The research design took both an inferential and a descriptive approach. A sample size of One hundred was drawn from the population. A hundred questionnaires were distributed randomly to stratified groups among the staff of De-United Food Industries Plc. Eighty five respondents duly filled and returned the questionnaires. A 5 – point likert scale was developed and validated to collect information from the respondents.

The data collected was analyzed with basic descriptive statistics such as frequency and simple percentages. Chi­-square analysis was also made. The core findings from the results obtained show that there is a significant correlation between Integrated Marketing Communication and level of sales, Integrated Marketing Communication promotes brand loyalty, and Integrated Marketing Communication increases consumer’s awareness of a particular product.

Conclusion was draw from the summary of the result. Various remarks and recommendations were proffered to the organization of study.


Table of Contents


Chapter One

Introduction

  • 1.0 Background to the Study
  • 1.1 Statement of the Problem
  • 1.2 Statement of Objective
  • 1.3 Research Questions
  • 1.4 Research Hypothesis
  • 1.5 Scope of Study
  • 1.6 Significance of Study
  • 1.7 Operational Definition of Terms

Chapter Two

Literature Review

  • 2.0 Introduction
  • 2.1 Historical Background of Case Studies Guinness Nigeria Plc (GNPLC)
  • 2.1.2 Historical Background of Nigerian Breweries.
  • 2.1.3 GNPLC/NBPLC Compered
  • 2.2 Nature of Segmentation
  • 2.3 Market Segmentation Process
  • 2.4 Basis for Segmenting the Markets
  • 2.4.1 Geographical Segmentation
  • 2.4.2 Demographic Segmentation
  • 2.4.3 Psychographics
  • 2.5 Condition Necessary for Successful Market Segmentation
  • 2.6 Appraising the Market Segments
  • 2.7 Choosing the Appropriate Market Segments
  • 2.8 Segmentation Resulting From Marketing Strategy
  • 2.9 Selecting a Market Targeting Strategy
  • 2.10 Benefits of Segmentation
  • 2.11 Limitations of Market Segmentation

Chapter Three

Research Methodology

  • 3.1 Introduction
  • 3.2 Research Design
  • 3.3 Population of Study
  • 3.4 Sample Size and Sampling Technique
  • 3.4 Method of Data Collection
  • 3.5 Method of Data Analysis
  • 3.6 The Data Analysis Instrument
  • 3.7 Restatement of Research Question
  • 3.8 Restatement of Research Hypothesis
  • 3.9 Validity of the Instrument
  • 3.10 Reliability of the Instrument

Chapter Four

Analysis and Interpretation

  • 4.0 Introduction
  • 4.1 Analysis of Section A
  • 4.2 Analysis of Section B of the Questionnaire
  • 4.3 Test of Hypothesis

Chapter Five

Summary, Recommendation and Conclusion

  • 5.1 Summary of Findings
  • 5.2 Recommendations
  • 5.3 Suggestion for Further Studies
  • 5.4 Conclusion
  • References
  • Appendix

Chapter One


Introduction

1.0 Background to the Study

The impact and effect of market segmentation with the view of globalization throughout the world ‘be it developed or developing economy, the supremacy being. accord the free market system cannot be over emphasized, that is achieving economic efficiency which ultimately leads to economic growth is free competitive market system otherwise refers to as the capitalist system.

Market segmentation is one of the steps into defining and target specific markets. It is the process of dividing a market into a distinct groups of buyers that require different products or marketing mixes.

A key factors to success in today’s market place is finding subtle differences to give a business the marketing edge.

Businesses that target specialty markets will promotes its products and services more effectively than a business aiming at the “average” customer.

Segmentation is so important that Kotler (2004) described the heart of modern strategic marketing as segmenting, targeting and positioning (STP). Since no marketer can satisfactorily satisfy the whole market or industry, it is therefore imperative that the market is segmented. Segmentation is also precipitated by the fact that the market is heterogeneous­ made up of different consumers with different needs and wants.

He also viewed market segmentation as an act of identifying d profiling distinct groups of buyers who might require different products and/or marketing mix.

Opportunities in marketing increase when segmented groups of clients and customers with varying needs and wants are recognized.

Market can be segmented or targeted using a variety of factors. The bases for segmenting consumers markets include:

  1. Demographical bases (age, family size, life cycle)
  2. Geographical bases (state, regions, countries)
  3. Behavior bases (product knowledge, usage attitudes, response)
  4. Psycho graphical bases (life style, values, personality)

Today, it could be generally agreed that almost all the manufacturing industries especially breweries, practice market segmentation due to tremendous benefit derived from it.


1.1 Statement of the Problem

Today, it has been noted that many organizations in our country are declining for the fact that, Nigerian business environment is unstable, couple with price fluctuations in the business cycle as a result of market homogeneity and this necessitated the concept of market segmentation. This can be simplified through the following points.

  1. Problems arising out of price fluctuations, low market and even closure of some firms.
  2. Monotony in production arouse from manufacturer engaging in the mass production and mass distribution of single brand of product which do not enhance profit maximization.
  3. Poor visionary management team or marketing personnel failure to identify the segmentation variables. For example how to identify customers want, standard and acceptable quality. (Market variations).
  4. Failure to identify marketing mix (price, product, promotion and place) and targeting market.
  5. Inconsistency in production output and decline in product delivery.

1.2 Statement of Objective

This study is carried out with the aim:

  1. To identify how a marketer can effectively apply segmentation techniques in brewing industry with a view to achieving consumer satisfaction and maximizing profit.
  2. To identify the basis for segmenting the market.
  3. To examine among other things the benefit and difficulties of market segmentation.
  4. To identify the market targeting strategies adopted.
  5. To evaluate the attractiveness of each segment.

1.3 Research Questions

The following research questions will be asked in the study

  1. Is there any significant relationship between market segmentation and organization performance?
  2. What would be a strategy put in place in order to achieve marketing mix such as,. price,, product, promotion and place in an organization?
  3. How prepared is marketing personnel or management to identify the segmentation variables such as to identify customers want standard and acceptability quality?
  4. Is there a reasonable industrial policies put in place to stimulate production output and regularity in product delivery?
  5. Are there being any stimulus put in place by market segmentation to enhance the production and distribution of all kinds of products that promote profit maximization in the economy?

1.4 Research Hypothesis

  1. Ho: There is no significant relationship -between market segmentation and organization performance?
    Hi: There is significant relationship between market segmentation and organization performance?
  2. Ho: There is no significant relationship between market segmentation and organization competitive advantage?
    Hi: There is significant relationship between market segmentation and organization competitive advantage?

1.5 Scope of Study

In this research work two companies were considered relevant for investigating the effect of market segmentation on performance of brewery industry. Based on its long years of existence in Nigeria. Guinness Nigeria PLC. (GNPLC) Nigeria Breweries PLC (NBPLC) were selected for study.

Also, the study will X-ray how and to what extent the companies have effectively combined and directed their marketing mix product, price, promotion and place towards meeting needs of their target segments.


1.6 Significance of Study

This study will be of immense importance to brewery . industries as well as marketers for in that it will educate them on the need to appreciate segmentation tools in performing better than competitors. GNPLC and NBPLC which are in the focus will benefit from it.

Suggestions and recommendations offered at the end of this study will enable the companies to improve their services that will automatically lead to profitability.

More importantly, this research work will be of benefit to future researchers into the areas of both beer and soft drinks manufacturing and marketing.


1.7 Operational Definition of Terms

Market:

This is an aggregate of forces or conditions with which buyers and sellers make decisions that result in the transfer of goods and services.

Again, Market represents a group of people or organizations with unsatisfied needs or wants and sufficient buying power.

Marketing:

Marketing has been described as the matching of an organization’s own capabilities to the wants of its customers. It has also been indicated that the matching is achieved by an organization’s attention to the 4ps, (product, price, promotion and place).

Selling:

Selling is simply that part of marketing, concerned with persuading customers to acquire the product, or service which best matches an organization capability with its customer’s wants.

Segmentation:

Segmentation is the identification of customer groups that respond differently than other customer groups to competitive strategies which require the conceptualization, development and evaluation of a competitive offering.

Targeting:

This is the act of picking a segment of market towards which all effort will be geared

Strategy:

This is a well planned series of actions for achieving success.

Brewery:

This is a place whereby manufacturing or brewing of beer is carried out.

Performance:

This is an act of accessing the impact of segmentation of market product from the consumers. OR the feedback received as a result of market segmentation of product.


Chapter Five


Summary, Recommendation and Conclusion

5.1 Summary of Findings

From the findings carried out so far, it has been established that the effect of market segmentation on performance is the soul and vehicle of survival in brewery industries particularly . in GMPLC and NBPLC. Since the world is not static, there is a lot of advent or innovations going on hence organizations cannot remain in isolation.

From the analysis conducted in chapter four, the following summary of findings was extracted. The two companies GNPLC and NBPLC segment their market: the knowledge gained from applying market segmentation enables their marketers to have a separate marketing mix for each group of homogeneous consumers. Understanding of markets enables the firms to target key consumers and direct appropriate marketing mix to them.

  1. Demographic basis including sex, age, marital status, education and occupation is the major basis the companies employed to identify the target segments.
  2. Furthermore, demographic variables are used by the companies to identify the target segment, they enable the companies to have good responses – there is readiness of consumers to buy each market segment.
  3. Also multi-segments strategy requiring and many products were adopted.
  4. Segmentation improves consumers’ satisfaction.
  5. However, segmentation is very expensive as the companies direct separate marketing mix to each . of the multiple segments.
  6. The result of the hypothesis test conducted also shows that marketing segmentation is an effective means of improving corporate performance.
  7. Result of the second hypothesis test revealed that marketing segmentation gives a company a competitive advantage in the industry.

5.2 Recommendations

Based on research findings and conclusions, the following recommendations are hereby put forward to help improve the implementation of market segmentation programme in the companies and other business organizations.

  1. Organizations should practice market segmentations since it is the modern vehicles in business advancement which has the propensity in multiplying investment.
  2. Another finding revealed that organizations should adopt multi-segments and multi products strategy in targeting the consumers’ needs and wants.
  3. Furthermore, finding also shows that limited resources wouldbe well managed if market segmentations are embarked upon.
  4. Marketers should separate different marketing mix for each group of homogeneous consumer. This will enable consumers to respond differently to their own needs and wants.
  5. Marketers should focus on demographic bases such as age, sex, marital status, education and occupation as basis for identifying the target. This will provide an insight of what line of innovations organizations should embark upon.
  6. It provides an effective means of improving corporate performance and more importantly segmentation provide company with competitive advantages in the industry.

5.3 Suggestion for Further Studies

The study is restricted to Guinness Nigeria PLC and Nigerian Breweries PLC. Meanwhile, this research could be useful tomarketing students, Business Administration and Business organizations and more importantly, an entrepreneur who may decide to contribute its quota to economic development and finally to fellow students on similar topic as well.
Also, if sufficient fund and logistic was abundantly available,research work would not have been restricted to Lagos state alone, rather to all Guinness Nigeria PLC and Nigerian Breweries PLC branches nationwide.


5.4 Conclusion

Market segmentation is indispensable to manufacturingindustries. These became imperative that the researcherdrawn up the following major conclusions from the questionnaires analysis and findings at the end of the research work. It was strongly upheld that marketers should target various characteristics of consumers like Demographic, Psychographic, Socio-cultural and Geographic variables as bases of segmenting their homogeneous consumers with separate marketing mix.

For market to be effectively segmented, measurability, sustainability, accessibility and action ability must be well applied.

Also, segmentation aids in standardization of marketing mix (4ps) in which marketers applied effectively on every innovations to ensure it gathered momentum for consumers brand loyalty. Segmentation propel manufacturer to enhance on vigorous researches to ensure more recoveries is achieved to replace products whose life cycle has declined.

However, since the advent of market segmentation, the problem of undifferentiated and concentrated marketing has been solved, which over time was setback and unfruitful method of investment to manufacturing industries.
Segmentation enhanced effective and efficient utilization of ‘ limited resources, competitive advantage is achieved as a result of segmentation and also an effective means of improving corporate performance.

From the following findings summarized herein from these studies, it depicts that segmentation if well implemented is the propensity of multiplying investment indeed. GNPLC and NBPLC are major beneficiaries of segmentation.


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