Effect Of Market Segmentation On Sales Performance Of Beverage Industries

Project and Seminar Material for Marketing

Effects Of Marketing Segmentation On Sales Performance In Beverages Industry


Market segmentation is one among the various strategies used in evaluating of marketing programmes. The objective of this study was to examine the effect of market segmentation on sales performance of beverage industries. The research was carried out in Cadbury Nigeria Plc, a customer oriented company. The study was conducted on 200 staff Cadbury plc who were randomly selected by the researcher as the population of the study. The data collected were analysed using the sample percentage and were further discussed and the formulated hypothesis was proved using the chi-square. The results of the research show that segmentation has a significant impact on the sales performance in beverage industry. It is also important to understand the organizational barriers to implementing segmentation strategy which may exist in a company, and to evaluate the “fi t” of segmentation with company capabilities. The information in this project work will enable marketing firms to reappraise the segmentation activity use of marketing resources and effort in their marketing activities.

Chapter One

1.0 Introduction

1.1 Background of the Study

Marketing has over the years advanced from various concepts and philosophies, which include the production concept, selling concepts, and product concepts.

The marketing concept is viewed from the customers orientation philosophy which seek to identify unsatisfied consumer needs and wants, and this develops goods and services tailored towards filling up and satisfying such needs though not all organization practices this concept but successful firms embark on it. Given the intense and growing competition, the global quest for profitable sites amongst marketers of goods and services, it has become mandatory for firms to adopt strategies in order to excel, grow and remain in the market in order to achieve acting organizational objectives.

Marketing strategies are developed from marketing objectives and overall organizational objectives.

Marketing strategies includes, the marketing objective of increase in sales, higher market shares and growth market penetration awareness ovation to mention a few. In order to achieve these goals and objectives, marketing evaluation and strategies are developed and implemented.

The increasing world population has resulted in consumers becoming numerous and diverse in the buying requirements needs and characteristics since firms cannot effectively serve all of them in a broad market.

It is inevitable to identify those parts of the market that are profitable and can be serve effectively give the available organizational resources and capabilities, thus this calls for the adoption of effective and segmentation of the markets.

Marketing effect and segmentation is always a customers oriented philosophy this consistent with the marketing concept. market segmentation is the process of subdividing a market into distinct and meaningful sub set of customer who require a tailored called mat during marketing program to satisfy their needs.

Many firms in the past adopted mass marketing concept as strategies for sales turnover by embarking on mass production, mass distribution and mass promotion of single brand of products to all buyers.

The argument for this strategy was that it crates the largest potentials markets which heads to the lowest cost, both production cost and over head cost and the marketing costs which in turn results to lower pricks or higher margin.
But in this age of intense competition, proliferation of marketing programmes/functions and greater customer advancement in education and awareness firms no longer practice the concept of “one size fit all” marketing.

Thus in bid for higher profitable sales, and greater customer satisfaction, mass marketing is relegated to the background with the adoption of the market segmentation which now recognizes the differences in segment needs, wants and response to marketing programmes.

Market segmentation goes beyond product design consideration, as it extend to price, promotion ,distribution variable and having an overall knowledge of each segment needs in order to develop matching marketing mix. Firm do not go into segmentation in marketing until athrough study of customer’s behavior with in the market is conducted through study of customer effective of marketing research for better understanding of their distinct and homogeneous characteristics is required.

This ensures grouping together customers of similar requirement and characteristics. Essentially, it consists of large identifiable group with similar wants, purchasing habits, geographical location and buying requirement thus market segmentation is an approach that should be executed by firms for success enhancement.

To a large extent, it is a process of dividing total heterogonous market for goods and services into several segments each of which tends to be homogeneous in all significant aspect.

Management thus select one or more of these market segment as the organization target market(s) and based on the understanding of their needs and wants, a matching marketing mix is envisaged, developed and directed towards satisfying them at a profit most importantly, segmentation enables the form to its marketing efforts and resources on the most profitable target market, in order to complete efficient by in one or two segments.

To be precise it involves a lot of dimension or approaches in terms of segmenting the market.

Such as the geographic, demographic, behaviouristic and psychographic variables in dividing the total market into different groups with similarities between the.

Increasing sales cannot be achieved without effective evolution of segmentation of marketing as a strategy. Because of the prospect involved in adopting market segmentation, firm desiring to achieve success embark on dividing total market into segments that can be reached and satisfied efficiently and at a profit in consideration of the role market segmentation plays in increasing sales volume, the researcher has decided to conduct a study to identify its importance bases/approaches limitations and its influence on a customer oriented organization particular reference to Cadbury Nigeria Plc.

For any organization to break through in its marketing activities. It is important for the marketed to identify with market segmentation strategy.

It enable the marketer to divide the market into various segment which could include income, age, locations etc and modify product offering that will suit into the particular target market.

It has been expressed in several form by marketing experts that a firm can not market its product to the entire market, it has to identify from the total market a part that I can successfully source with its product because of this factors, the concept of market segmentation is applied as the means by which organization break the total market into sub markets where a form can aim and reach with it distinct marketing mix.

Market segmentation requires that the company identify different basis for segmenting by the market develop profiles of the resulting market segment and develop measure of each segment attractiveness market segmentation remain on inedible mark for markets to enter a particular market.

Market segmentation have been defined by Philip Kotler as “the act of dividing a market into distinct meaningful group of buyers into might merit separate product and or marketer mix.

1.2 Statement of the Research Problem

The quest for increasing profitable state volume is every organization problem is every organization problem.

Both markets of services and tangible seek to enhance profit and sales turnover and the objectives of profitability can only be achieved when firms properly understands and apply effective and markets segmentation strategy.

Firms are also faced with difficulty of identifying and selecting particular market target and satisfying them by blending the marketing mix elements thus market segmentation recognizes that every market is made up of distinguishable segments consisting of buyers with different needs.

The task of clearly understanding consumer needs and wants, identifying various homogenous customers characteristics according to an outlined dimension in order to group them together adequately and to effectively develop marketing mix to match these characteristics and buying requirement.

All poses fundamental marketing problems to firms.

Marketing segmentation is one among the various strategies used in evaluating of marketing programmes. There by segmenting markets into subsets with aim of satisfying customers groups and equally increase sale volume and profitability for the total organization and the stakeholders is an objective and goal of every business that practices the marketing concept. Most organization the appropriate encounter the problem of determining the appropriate pricing, promotional and distribution strategy to adopt in satisfying their numerous customers.

Though some firms finds it excruciating to marketing segmentation strategy, due to their inclination of the strategy as an expensive and time consuming exercise, this is because of inadequate information on its importance to customer satisfaction.

The importance or not of market segmentation as a strategy for increasing sales volume has become on research problems.

Brief History of Cadbury Nigeria

Cadbury Nigeria Plc is a public liability company involved in manufacturing with specific emphasis on cocoa based products. Its products rages to cover areas such as food, beverages and sugar.

The company began in 1956 as Cadbury fry export setting up office at A9 orange road, Apapa with the sales of pronto a cocoa based chocolate and drinks using a rented warehouse.

In 1960 Bournvita Leading food was introduced, initially both products were bulk imported and packed at Apapa ware-housed factory but it. Soon became clear that a lot needed to be done based on its success history.

The business of the organization is centered on serving the customers with high quality food and other items, which are important for the welfare and sustenance of all members of the family.

Items produced by the company include Bournita, Goody-goody, éclair, batternut, tomapep, Maggi and knorr cubes.
The combined strength of its brand backed by a few reacting distribution network which touches all part of the country. This makes the company a clear competitive edge in Nigeria market environment or place.

Cadbury has about 2000 staffers made up of some of the nation’s best trained technocrats and a manager with adopt of more than 20 nationwide.

Its distributions strategy involves the use of direct customer depot, distributors, trading companies, and its sales team.

The company is committed to its workers and customers and such created and allows rooms for the following.

  1. Creating atmospheric condition where by all employees interacts and concern and express opinions with the assurance that these will be fairly considered.
  2. Fostering open way communication between management and employees.
  3. Company uses sales promotion as a remedy to poor or low sales, by stimulating the demand of their products and increasingly market share of their products.
  1. The company monitors the changes in wants and needs of the consumers.
  2. Developing and maintaining high standard quality.
  3. Researching new technological for products which favours an improve environment.
  4. The company use periodical sales promotional methods to stimulate demand and get new consumer trials and encourage brand loyalty.

1.3 Objective of the Study

The purpose of this very research work is described below.

  1. To establish the relevance of market segmentation to sales minimization
  2. To enumerate the importance of firms adopting the effect of market regimentation in order to achieve organizations objective of profitability and customers satisfaction.
  3. To examine the dimensions and bases of segmenting market and their relationship to sale increase.
  4. To determine the degree to which the organization in question Cadbury Nigeria Plc) practices market segmentation.
  5. To highlight the limitation of the study
  6. At the end of the study it is intended to give relevant recommendation to the firm on how to adopt market segmentation.

1.4 Significance of the Study

This research work apart from being an essential requirement for the partial fulfillment of Higher National Diploma, it will be an added value and benefits to the researcher, other individuals, and groups.

This particular project will be beneficial to Cadbury Nigeria Plc as the findings and recommendation will help improve their marketing activities.

The project will benefit also my fellow student and other student from their institutions in related course to mine.
Lecturer of Kaduna polytechnic will also benefit from the accumulated knowledge in the research work.

The information in this project work will enable marketing firms reappraise the segmentation strategy use of marketing resources and effort in their marketing activities.

The study will also widen the knowledge base of the researcher in the course of conducting this very research.

1.5 Statement of Hypothesis

Alternate hypothesis (H1)

Market segmentation is fundamental is increasing sales volume.

Null Hypothesis (Ho)

Market segmentation is not fundamental in increasing sale volume.

The data collected were analysed using the sample percentage and were further discussed and the formulated hypothesis was proved using the chi-square.

The researcher accepted the alternate hypothesis (H1)

Rejecting null hypothesis (Ho)

The researchers also finds some others things in the studies such as strategies of segmentation is applied by the firm in its marketing activities.

The researcher concludes on the fact that Cadbury Nigeria Plc is a marketing oriented firm.

The researcher suggest several recommendations such as the firm should engage in more promotional activities in order to create awareness about the company’s product and activities.

1.6 Delimitation or Scope of the Study

In this research investigation, it is going to be confined to the field of market segmentation and its attendance relationship to sales volume increase and profitability.

The research work will highlight segmentation dimensions such as the geographic, demographic, pscyhograhics, and behavioural segmentation approach. And the procedures identifying marketing segment will be explained.

The study will enumerate strategies for management adaptation in selecting one or more segment as its target marketed.

The researcher will at the end of the study enumerate recommendation to Cadbury Nigeria Plc as to market segmentation aid its attendant ability to increase sales volume.

The study will highlight the methodology used in obtaining all the relevant information from the sample respondents.

The research work further interpreters, analyze and present all the collected data into meaningful information.

1.7 Definition of Terms

a. Market:

Is a set of individuals or organization that desire a product and willing and able to buy it.

b. Target Market:

A selected market to focus on and develop marketing programs.

c. Product:

Anything offered to the market for acquisition, sales, attention use or consumption that satisfies a need or want.

d. Marketing Mix:

They are element of marketing usually referred to as the 4ps i.e. product, price, place, promotion.

e. Market Segmentation:

It is the dividing of a large market into smaller subsets of consumers or organization that are similar in characteristic behavior, wants or needs.

f. Consumer Market:

It is a set of individual buyers who purchase or use product or service for their own personal or household use.

g. Heterogeneous Market:

A market consisting of consumers with diverse characteristics needs and wants.

h. Homogeneous Market:

A market consisting of consumer or organization with similar needs, wants and behavioural tendencies.

i. Industrial Market:

It is a market consisting of business, industrial or institutional organizations that buy goods or services to make other goods or other products.

j. Marketing Strategy:

A marketing logic used by firms to achieve set objectives

Chapter Five

Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to ascertain the effect of market segmentation on sales performance of beverage industries.

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the effect of market segmentation on sales performance in beverage in.

5.2 Summary

Segmentation demands close attention to market definition, identifying market segments and forming segment targets, which are described, analyzed and evaluated. Segmentation of a product-market requires that response differences exist between segments, and that the segments are identifiable and stable over time. Also, the benefits of segmentation should exceed the costs. The variables useful as bases for forming and describing segments include the characteristics of people and organizations, use situation, buyers’ needs and preferences, and purchase behavior. Segments can be formed by identifying customer groups using the characteristics of people or organizations. The groups are analyzed to determine if the response profiles are different across the candidate segments. Alternatively, customer response information can be used to form customer groupings and then the descriptive characteristics of the groups analyzed to fi nd out if segments can be identified. Several examples of segment formation are discussed to illustrate the methods that are available for this purpose. Finer segmenting strategies present attractive options for moving toward small segments and responding to buyers’ unique value requirements. Technology, buyer diversity, and relationship opportunities are the drivers of finer segmentation strategies. These strategies include micro segmentation, mass customization, and variety seeking. While potentially attractive finer segmentation strategies are more complex than other forms of segmentation and require comprehensive benefit and cost evaluations. Segment analysis and evaluation consider the strengths and limitations of each segment as a potential market target for the organization. Segment analysis includes customer descriptions and satisfaction analysis, evaluating existing and potential competitors and competitive advantage, marketing program positioning analysis, and financial and market attractiveness. Segment analysis is important in evaluating customer satisfaction, finding new-product opportunities, selecting market targets, and designing positioning strategies. Nonetheless, it is also important to understand the organizational barriers to implementing segmentation strategy which may exist in a company, and to evaluate the “fi t” of segmentation with company capabilities. Effectively implemented, a good segmentation strategy creates an important competitive edge for an organization

5.3 Conclusion

As we have emphasized earlier on the reason for focusing on a specific target. Market, that is, by using marketing segmentation approaches or tools such as cluster analysis and trade off analysis is so that marketers can fine tune to whole marketing mix to appeal to some competitors. By differentiating the marketing mix to do a better job of meeting customer’s needs, the firms build on a competitive advantage. In other words, target customers will view the firm’s position in the market as uniquely suited to their preferences and needs. Further, because everyone in the firm is clear about’ what position it wants to achieve with customers, product, promotion and other marketing mix decisions can be blended better •to achieve the desired objectives. Although the marketing manager may want customers to see the firm’s offering as unique, that is not always possible. Even if a firm’s marketing mix is different, busy consumers do not always recognize it. Therefore, in looking for opportunities. It is important for the marketing manager to know who customers do view the firm’s offering. This is where another important approach positioning comes in.

5.4 Recommendation

Positioning helps managers understand how customers see their market. It is a visual aid to understand a product market. The first time such an analysis is done, managers may be shocked to see how much customers’ perceptions of a market differ from their own. For this reason alone, positioning is useful in business operations everywhere in the globe. It is therefore recommended that businesses should endeavor to carry out market segmentation activity irrespective of its cost implication if the long-run corporate objectives of the firm must be actualized.

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