Market Segmentation As A Recipe For Consumers Satisfaction
This study was carried out to examine market segmentation as a recipe for consumer’s satisfaction using Unilever Nigeria Plc, Ikeja Lagos State as a case study. The study was carried out to find out the relevance of market segmentation as a marketing strategy, find out the forms of market segmentation commonly adopted by business organizations, and ascertain the impact of market segmentation on customers satisfaction. The survey design was adopted and the simple random sampling techniques were employed in this study. The population size comprise of marketing staff of Unilever Nigeria Plc, Ikeja Lagos State, the researcher conveniently selected 65 respondents and 50 were validated. Self-constructed and validated questionnaire was used for data collection. The collected and validated questionnaires were analyzed using frequency tables and mean scores. While the hypotheses were tested using chi-square statistical tool. The result of the findings reveals that the forms of market segmentation commonly adopted by business organizations include; psychological segmentation, psychographic segmentation, socio-cultural segmentation, demographic segmentation, and geographic segmentation. Furthermore, the result of the findings reveals that market segmentation has a positive impact on customers satisfaction. Therefore, it is recommended that a group of individuals have a specific need, they have the ability to purchase or obtain a specific product, have the desire to spend what they have to get this product and have the authority to buy this product. Hence, business organizations much take into considerations these four conditions that are used in determining the market when adopting a marketing segmentation strategy. To mention but a few.
Table of Content
- Title Page
- Table of Content
- List of Tables
- 1.1 Background of the Study
- 1.2 Statement of the Problem
- 1.3 Objective of the Study
- 1.4 Research Questions
- 1.5 Research Hypothesis
- 1.6 Significance of the Study
- 1.7 Scope of the Study
- 1.8 Limitation of the Study
- 1.9 Definition of Terms
- 1.10 Organisations of the Study
Review of Literature
- 2.1 Conceptual Framework
- 2.2 Theoretical Framework
- 2.3 Empirical Review
- 3.1 Research Design
- 3.2 Population of the Study
- 3.3 Sample Size Determination
- 3.4 Sample Size Selection Technique and Procedure
- 3.5 Research Instrument and Administration
- 3.6 Method of Data Collection
- 3.7 Method of Data Analysis
- 3.8 Validity of the Study
- 3.9 Reliability of the Study
- 3.10 Ethical Consideration
Data Presentation and Analysis
- 4.1 Data Presentation
- 4.2 Analysis of Data
- 4.3 Answering Research Questions
- 4.4 Test of Hypotheses
Summary, Conclusion and Recommendation
- 5.1 Summary
- 5.2 Conclusion
- 5.3 Recommendation
1.1 Background of the Study
Marketing segments must be large enough to meet the financial needs of the company and the product. Segments may be chosen based on demographics, psychographic, behavioral or geographic location. The segment must also be reachable by promotional means.
Customer satisfaction, and customer retention are important intermediate goals for institution providers on their way to superior economic success in the liberalized markets. As market growth slows or as the markets become more competitive, companies will more likely attempt to maintain their market share by focusing on retaining existing customers, rather than attempting to attract new customers. Customer retention has been advocated. To improve customer retention, companies initiate a variety of activities, including programs on customer satisfaction (Rust & Zahorik,1993), complaint management (Fornell & Wernerfelt, 2003), and loyalty (Reichheld & Sasser 2000). Speed and Smith (1992) advocate the use of segmentation as a way to improve customer satisfaction, customer loyalty and customer retention. Many institutions spend a considerable portion of their time, energy and resources chasing new business. Although it is important to replace lost business, grow the business and expand into new markets, one of the primary goals should be to keep existing customers and enhance customer relationships. Conventional wisdom suggests that it costs at least five times more to get a new customer than to keep an existing one (Weinstein, 2002). According to Weinstein, in many markets, share of customer, which is a customer retention measure, has supplanted market share, which is a customer attraction measure, as the relevant business performance objective. Consequently a good understanding of customers’ purchasing patterns helps companies keep customers and gain a greater share of their business. Market segmentation is a fundamentally important concept within any institution. The customer segmentation process determines the method of operating of all the functions that serve the customer. A key element for increasing market share and profitability in a fragmented market is through the strategy of market segmentation since stiffer competition has resulted in the need for institutions to identify various options for survival. The primary objective of segmentation must be how to win and retain customers. Players in any industry must concentrate on attracting new customers into their organization and most importantly efforts must be geared towards keeping such customers; market segmentation therefore offers an opportunity to do so. Unfortunately industries have been slow in taking advantage of market segmentation though it brings some benefits to such companies. However, most companies in various industries use market segmentation in achieving customer service excellence.
1.2 Statement of the Problem
The numbers of emerging industries pose a tough competition. As a result of the intense competition among companies coupled with the economic crisis has caused unfavorable impact, which led to a decrease in customers patronage, and retention. Hence it becomes imperative for companies to entrench the marketing segmentation strategy to attract more customers, satisfy the existing ones and ensure there retention. Market segmentation involve the process of dividing a market into different smaller units of consumers with common needs or characteristics and selecting one or more segment to target with a distinct marketing mix. However the effectiveness of market segmentation lies on the proper understanding of basic conditions such as defining the market problem, determining the basis of segmentation, choosing a set of descriptors that define, characterize or relates to the segmentation basis. Select a sample of consumers that is a representative of the larger population of interest, collect data on segment descriptors from the sample of consumers; from segments based on chosen consumer descriptors. Establish profiles of segments; translate the results into marketing strategy. Many organization do not segment their market neither understand their basic criteria. As a result no appropriate marketing mix is adopted to target a market segment. The resultant effect is exposure to still competition, low sales, low consumer patronage and loyalty.
1.3 Objectives of the Study
Generally, this study seek to examine market segmentation as a recipe for consumer’s satisfaction. The study will specifically;
- Find out the relevance of market segmentation as a marketing strategy.
- Find out the forms of market segmentation commonly adopted by business organizations.
- Ascertain the impact of market segmentation on customers satisfaction.
1.4 Research Question
The study will be guided by the following questions;
- How relevant is market segmentation as a marketing strategy?
- What are the forms of market segmentation commonly adopted by business organizations?
- Does market segmentation have a positive impact on customers satisfaction?
1.5 Research Hypothesis
Ho: Market segmentation has no positive impact on customers satisfaction.
Ha: Market segmentation has a positive impact on customers satisfaction.
1.6 Significance of the Study
As the marketing environment is ever changing, a market continues to strive for perfection (Novelty) marketing which is a human / idea oriented discipline cannot do with out idea generation. Implicitly as more ideas and products come into being so as the problem of entering the target market and satisfying consumers effectively and efficiently. This study on market segmentation on customer satisfaction will benefit the following.
The ease organization – the study will enable NBC known how to satisfy their customers very well.
It will help other related companies on how segmentation will help them improve on their offerings. The study, will be equally beneficial to readers and researchers as the findings will wider their knowledge in research writing and equally serve as a source of literature review.
1.7 Scope of Study
This study is structured to focus on market segmentation as a recipe for consumer’s satisfaction. The study will also figure out the forms of market segmentation commonly adopted by business organizations. The study will be carried out in Unilever Nigeria Plc, Ikeja Lagos State.
1.8 Limitation of the Study
Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
1.9 Definition Of Terms
This is the process of sub – dividing a heterogeneous market into homogenous subset or group of customers so that each group can conceivably be selected as a separate market target to be reached with a district marketing mix.
This is a unique group, which has all its segmentation variables and characteristic.
This group falls under the lower group, they are the lower income earners.
Is described as STP marketing namely – segment target marketing and positioning.
It is the act of establishing a variable completive positioning of the firm and its offer in each target market.
This is an act of focusing all marketing efforts on the buyer why they have the greater change of satisfying.
This include: Geographic, Behavioural, Demographic and Psychographics to consumer market. While to industrial market, it include Demographic, Operating, Purchasing a approaches, situation factors and personal characterize.
1.10 Organization of the Study
The study is categorized into five chapters. The first chapter presents the background of the study, statement of the problem, objective of the study, research questions and hypothesis, the significance of the study, scope/limitations of the study, and definition of terms. The chapter two covers the review of literature with emphasis on conceptual framework, theoretical framework, and empirical review. Likewise, the chapter three which is the research methodology, specifically covers the research design, population of the study, sample size determination, sample size, and selection technique and procedure, research instrument and administration, method of data collection, method of data analysis, validity and reliability of the study, and ethical consideration. The second to last chapter being the chapter four presents the data presentation and analysis, while the last chapter(chapter five) contains the summary, conclusion and recommendation.
Summary, Conclusions and Recommendations:
This chapter summarizes the findings on market segmentation as a recipe for consumer’s satisfaction using Unilever Nigeria Plc, Ikeja Lagos State as a case study. The chapter consists of summary of the study, conclusions, and recommendations.
5.2 Summary of the Study
In this study, our focus was on market segmentation as a recipe for consumer’s satisfaction using Unilever Nigeria Plc, Ikeja Lagos State as a case study. The study is was specifically focused to find out the relevance of market segmentation as a marketing strategy, find out the forms of market segmentation commonly adopted by business organizations, and ascertain the impact of market segmentation on customers satisfaction.
The study adopted the survey research design and randomly enrolled participants in the study. A total of 50 responses were validated from the enrolled participants where all respondent are marketing staff of Unilever Nigeria Plc, Ikeja Lagos State.
In the light of the analysis carried out, the following conclusions were drawn.
- Market segmentation as a marketing strategy is very relevant.
- The forms of market segmentation commonly adopted by business organizations include; psychological segmentation, psychographic segmentation, socio-cultural segmentation, demographic segmentation, and geographic segmentation.
- Market segmentation has a positive impact on customers satisfaction.
Based on the findings the researcher recommends that;
- A group of individuals have a specific need, they have the ability to purchase or obtain a specific product, have the desire to spend what they have to get this product and have the authority to buy this product. Hence, business organizations much take into considerations these four conditions that are used in determining the market when adopting a marketing segmentation strategy.
- Business organizations much also consider the use of behavioral data as a superior tool both in its ability to increase sales as well as its ability to do so at far less cost than broad-based communication approaches.
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