The Impact Of Market Segmentation On Organization Profitability

The Impact Of Market Segmentation On Organization Profitability
Abstract
This study is on market segmentation strategy with its attendant impact on sales performance with particular reference to Champion breweries Nigeria Plc Akwa Ibom; requires a high degree of accuracy and authenticity. The total of 20 respondents represent 100% acknowledged that market segmentation is effectively adopted and applied by the company (Champion breweries). This really indicates that Champion breweries is marketing oriented. The researcher proceeded to find out if the effects of market segmentations has only impact on the marketing of any company products the total 20 respondent acknowledged that marked segmentation has great impact on the marketing of their products,100% indicated “yes” which goes to show that market segmentation, positively influences the sales volume of the company products.
Chapter One
1.1 Introduction
1.1 Background of the Study
Market segmentation is the process of dividing the different kinds of market into smaller customer division having certain relatively difference in characteristics that can be satisfied by an organization or a market. It can also be explained as a process sub-dividing a homogeneous group that will respond differently to promotions, communication advertisement. It is a marketing strategy which organizations implore in their market activities so that the capital invested in its marketing operation can be achieved. This project meant to explore not only to show the benefits accruing to the organization in segmenting its marketing operation. All market segmentation consisting of customers with different needs and organizations seeks different ways to bring to other this diversities as the developed strategies to completes for customers, Mason and Ezeun (1990). Each segment or group can be targeted by different marketing mix because the segments are increased to minimize inherent differences between respondents. Began and Finr Bemer (1994). Most organizations fail to apply marketing segmentation in its marketing operations in views of these, discussing on the benefit of market segmentation becomes important. Some years, the issues of greater attention in terms of segmented market filled the air all these tend to bring in not only the need for the organization to apply market segmentation to be properly achieved, this study will show how market strategy tends to influence the sales volume of any organization. It should be noted that market segmentation performs the following marketing roles.
- It helps in identifying unsaved market, and also allow a new company or new products to target less contested buyers
- It is easier to address the need to smaller groups of customers.
- It makes more efficient use of marketing resources by focusing on the base segment of offering.
1.2 Statement of Problems
Market segmentation refers to the division of a market into homogenous group which will respond differently to various characters. It is the subdivision of market into distinct subsets of customers where any subset may conceivably be selected as a target market reached with a distinct marketing mix (Kotler, 1980:195)
Despite the advantages of market segmentation in market operation or in organizations most firm dose not normally adopt such policy in their marketing operations, due to certain challenges involved. But through market segmentation policy is being applied in Champion Breweries Plc Uyo.
1.3 Objective of the Study
The objective of this study are as follows:
- To investigate the role of market segmentation in the profitability of Champion Breweries Plc Uyo.
Identify the objectives of market segmentation champion Breweries Plc Uyo. - To determine the market segmentation strategy used by champion breweries plc uyo
- To identify problems confronting champion breweries in the market segmentation strategy
- To recommend ways of marketing effectiveness of using market segmentation in Champion Breweries Plc.
1.4 Significance of the Study
- This study focuses on the impact of market segmentation in champion breweries plc
- This study also serves as a challenge to other fellow competitors in companies
- This study serves as references to other student whom may wish to go into similar research work.
1.5 Scope of the Study
The scope of this study is limited to Champion Breweries Plc and it involves all the staff ranging from junior to the managers level. And it limitation may raised are as follows
- Due to time factors and limitations
- Bad communication network
- Financial breakdown
- Bad means of transportation
Dimension depending on the variables of the scope of this study is champion breweries plc and the extent to which the organization has applied this concept in its marketing operation in order to increase their sales volume. However this study is determined to the application of market segmentation in organization. The choice of champion breweries plc for this research is to inform the public its predicted strategic importance for economy in terms of food and beverages in comparison with other marketing operations. When we consider the dynamic nature of food and beverages sector and the competition of the activities therein, it presents itself the most assurable sector for a research work of this nature. And also the importance and positive effect of market segmentation strategies on organization. There are certain limitations or negative effects that may confront this research work. Some of such negatives effects are:
- Financial factors
- Bad communication network and means of transportation.
1.6 Research Question
- What role does market segmentation play in profitability of champion breweries plc uyo?
- What are the objectives of market segmentation in champion breweries plc uyo?
- What market segmentation strategy is adopted by champion breweries plc uyo?
- What are the problems confronting champion breweries plc?
1.7 Research Hypothesis
The following hypothesis has been formulated and will be verified in the course of this study
H1: Market segmentation plays a significant roles in the profitability of Champion Breweries Plc Uyo.
H2: There is no specific objective of market segmentation in champion breweries Plc Uyo.
H3: There is no problem confronting champion breweries in their market segmentation strategy
H4: There is relationship between market and segmentation in an organization profitability.
1.8 Definition of Terms
Market:
The word ,market is an English word in the sense that, it is an aggregate of people who as individual organization have need for products in the products class and who have the ability, willingness and authority to buy it. It is not geographical area of exchange but the present and potential buyers that have the ability (money) and willingness (taste) to buy Album (1991).
Strategy:
This implies a plan or programme of action aimed at meeting a challenges or winning to do in order to achieve a goal. Hornby (1974) defines strategy as the art of planning operations in ways especially of the movement of aims and navies into favorable positions for fighting, skill in managing an affair of an organization be it the army or business organization with the aim of achieving a goal.
Marketing:
It is being defined as a sum total in business activities that maximizes the flow of goods and services from the producer to the final consumer Kottler (1990). It is human activity directed at satisfying needs and wants through exchange process. Such identifies needs and wants becomes a products idea that has to be communicated to production department of the organization for translation into physical goods for the satisfaction of these identified desires.
1.9 Organization of the Study
Chapter one introduces the background of the study, chapter two reviewed the related literature by introducing the definition and importance of market segmentation through market segmentation techniques with the application of market segmentation in an organization by creating major criticism of market segmentation of product management. And chapter three show how research methodology and research design can be use in area of the study by showing the population of the study through sample and sampling techniques by research instrument and administration of instrument by decision rule. Chapter four highlights data presentation analysis and interpretation in which its introduces the data presentation in tables and testing of null hypotheses by discussing the finding. Chapter five brought about the summary, conclusion and recommendations by inducting the summary, conclusion, recommendations and also suggestions for further studies and references with appendix.
1.10 Brief Historical Background of Champion Breweries Plc Uyo
Champion breweries plc was incorporated as a private limited liability company on the 31st of July, 1914 with the same south east breweries limited. The company’s name was changed from south east breweries limited to Cross River breweries Limited and thereafter to champion Breweries limited. The later names, champion breweries limited changed to champion breweries plc on the 1st of September, 1992. On the 24th of November, 1994, the then south eastern state of Nigeria signed an agreement with messers, hence breweries the GMBH of humbury technical partners for the supply and construction of a turnkey brewery in Uyo with a capacity of 150,000 hectoliters. The foundation stone of the breweries was laid on the 19th of March, 1975. On the 11th of December, 1976 the breweries was officially commissioned and its products and also champion lager beer launched into the market with success with initial capacity of 150,000 hectoliters per anum.
Chapter Five
Summary of Finding, Conclusion and Recommendations
6.0 Introduction
This very chapters deals with the summary of findings. It is also concerned with marking relevant conclusions on all the discussed data collected and analyzed in chapter four and five.
The researcher made adequate recommendation in areas requiring such, in order to enhance the adoption of the strategy for effective segmentation as it relates to sale volume increased by Champion breweries Nigeria Plc.
5.1 Summary of Findings
The study evaluated market in the beginning of its review of related literatures.
A market is seen as the group of people that are both potential and actual consumers who have some needs to satisfy who are willing to satisfy such need and are financially capable of satisfying such needs.
The starting point of any segmentations discussion is the mass marketing.
The mass marketing concept is seen as a process by which a seller engages in the mass production, mass distribution and mass promotion of one product for all categories of buyers.
The argument by marketing professionals for mass marketing which says that it creates the largest market leading to lowest cost and lower prices is speedily loosing ground today.
This is because the concept does not take into consideration the customers oriented philosophy.
The marketing concept is acceptable today in that it is a philosophy that first seek to identify customers needs and developing and directing needs to satisfying goods and services to identified customers groups.
It is a known fact that satisfied customers not only remain loyal to the firm but also serves as an unpaid medium of advertisement because they promise the firms benefits to potential customers, thereby increasing the sales volume of the firm. Market segmentation strategy is an element of the marketing concept.
It is a process of identifying and grouping together customers with similar buying characteristic needs and wants etc and also developing distinct matching marketing mix for them.
Marketing segmentation effect strategy helps marketing managers analyze particular total market demand in terms of its consistent part, thus dividing the heterogeneous market into sub-markets or market segments’ in which the consumer wants and buying characteristics in each segments are essentially homogeneous, such that the market can develop a specific marketing mix for the particular segment that is chosen as target market.
Market segmentation as a strategic process seeks to establish. Diversities, which may exist within a given market, which may lead them to uncover market opportunities. It aids marketers target its resources both human and material towards satisfying single or few segment of the total market.
Market do not start segmenting their market until a thorough marketing research is conducted into customer buying characteristics and needs (diverse characteristics) and based on certain segmentation variables the firm can then divide the total into distinct sub-sets. With the satisfaction of customers group identified needs and wants, the firms is able to achieve increase sales volume and profitability. In conclusion, through market segmentation produces a lot of benefits to the firm, amongst sale volume increase and many others, it results in higher marketing costs and other overhead costs.
5.2 Conclusion
Market segmentation as some authors have rightly said, it is an important strategy in marketing it is a logical trade of the present widely acceptance marketing concept.
The adoption of market segmentation strategy depends on the existence of a number of needs, which must be large enough to be served profitably.
It is a deliberate tool for maximizing market demand targeting market matching marketing mix, a significant segment of consumers.
From proceeding chapters, it has been clearly observed that the strategy of segmentation recognizes that people differs in their needs, wants, buying characteristics, attitude, firmly size, income level, and life style etc.
Thus marketers must develop distinct marketing mix for different segments. They study was clearly shown that firms must consider different market segments in order to pace way to identify in reaped opportunities. Satisfied market segment yield high sales fro the company’s marketing effort.
Firms have recognized the significance of market segmentation strategy to the market of their product. Thus they are adopting and applying the concept to their marketing activities especially from its strategy planning perceptive.
The measure of success observed by Champion breweries from adoption of market segmentation is commendable.
It has been noticed that segmentation strategy does enhance Champion breweries identify target market. That the research observed that the strategy of mass marketing adopted by Champion breweries does not allow the firm direct its marketing resources to target groups, resulting wastage of time and money.
With the adoption of segmentation strategy, Champion breweries foods were able to direct it marking efforts to a profitable target market group in essence the company’s segmentation strategy was achievable using a number of variable in the segmentation process in order to group together consumer with similar needs, wants and buying characteristics.
Geographic, demographic, behavioral, psychographic variables are collectively applied, but most often, these generate numerous costs.
Thus the demographic variable were extensively adopted by Champion breweries Nigeria Plc.
Champion breweries has enjoyed a lot of benefit from customers. Satisfaction and high profit margin. Yes it was observed that the adoption of market segmentation strategy increase cost excessively covers all increase in marketing expenses).
However, with all time above mentioned benefits derived from the company market segmentation strategy the researchers observed that the strategy limits larger market coverage. The researcher notice that Champion breweries Akwa Ibom does not recognize the significance of promotional activities to the success for its market operations for instance promotional activities such as advertising, sales promotion, publicity and personal selling are not adequately used in conducting other marketing activities.
The investigator observed that the rate of turn over of Champion breweries personnel management staff is very high and this does not argue well for the company’s business in terms of efficiency and effectiveness and in particular for the company’s policies continuity.
5.3 Recommendations
The following recommendations are made based on the findings of the study in order to help the management of Champion breweries Nigeria Plc Akwa Ibom do a better job of marketing management most consistently monitor trend in the consumer market.
In order to identify changes in consumer profiles, which could affect the level of demands and thus its resultant affect sales volume too.
The firm must always monitor the market trends in order to a adopt new strategies to maintain its market share as the leader and subsequently develop innovative products that will satisfy the dynamic market. Champion breweries management is advised in accordance to economic situation to develop suitable marketing mix that will satisfy customers needs.
This is because of the economic depression affects consumer purchasing power leading to decrease in sales. This requires further product sizes to its income groups.
Effective promotion of the firms product enhances profitability and consumers awareness of the company’s product and marketing activities Champion breweries Nigeria Plc is advised to enhance its promotional activities such that it extends to the rural areas because that market is an emerging potential market which will be a profitable market segment. Champion breweries is advise to reduce the level of employee turnover.
In order to obtain a positive corporate image, Champion breweries is also encouraged to adopt more of demographic segmentation variables in the segmentation process. This is because demographic variables comprises of sex, income, age, educational level etc.
Champion breweries is also advised not only to direct its marketing activities to large market segments but even small and profitable market segments Champion breweries Nigeria Plc Akwa Ibom is advised to conduct marketing research into the small but attractive markets. In order to enhance consumer diverse characteristics, which will suits its marketing objectives and resources in order to direct its efforts.
Employees remuneration system should be improved (especially the sales staff in the field) to motivate them to work hard.
This motivation will encourage the staff serve as the firms eyes and ears acting as intelligence officers to observe changes in the market.
This analysis of the market situation will expose attractive opportunities existing in the market or unsatisfied customers group to enable the firm target its marketing activities towards satisfying them.
Interview and surveys should be embarked upon to determine the level of customers satisfaction and dissatisfaction resulting product consumption.
These will guide the firm in developing and adjusting its product features, qualities styles and even the promotional activities such and even the promotional activities such as advertising messages.
The consumer products market is increasing and attracting new competitors into the industry Champion breweries must adopt the strategy of continuous innovation in order to offset the activities of its competitors.


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