Effect of Market Segmentation on Sales Performance of Beverage Industries
Chapter One
OBJECTIVE OF THE STUDY
The purpose of this very research work is described below.
- To establish the relevance of market segmentation to sales minimization
- To enumerate the importance of firms adopting the effect of market regimentation in order to achieve organizations objective of profitability and customers satisfaction.
- To examine the dimensions and bases of segmenting market and their relationship to sale increase.
- To determine the degree to which the organization in question Cadbury Nigeria Plc) practices market segmentation.
- To highlight the limitation of the study
- At the end of the study it is intended to give relevant recommendation to the firm on how to adopt market segmentation.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Introduction
The division of a market into different homogenous groups of consumers is known as market segmentation. The marketing concept calls for understanding customers and satisfying their needs. But different customers have different needs, and it rarely is possible to satisfy all customers by treating them alike. One of the main reasons for engaging in market segmentation is to help the company understand the needs of the customer base. Often the task of segregating consumers by specific criteria will help the company identify other applications for their products that may or may not have been self evident before. Uncovering these other ideas for use of goods and services may help the company target a large audience in that same demographic classification and thus increase market share among a specific sub-market base. While there may be theoretically ‘ideal’ market segments, in reality every organization engaged in a market will develop different ways of imagining market segments, and create product differentiation strategies to exploit these segments. The market segmentation and corresponding product differentiation strategy can give a firm a temporary commercial advantage, which is essential to its existence.
All markets are heterogeneous. This is evident from observation and from the proliferation of popular books describing the heterogeneity of local and global markets. Consider, for example, The Nine Nations of North America (Garreau, 1982), Latitudes and Attitudes: An Atlas of American Tastes, Trends, Politics and Passions (Weiss, 1994) and Mastering Global Markets: Strategies for Today’s Trade Globalist (Czinkota et al., 2003). When reflecting on the nature of markets, consumer behaviour and competitive activities, it is obvious that no product or service appeals to all consumers and even those who purchase the same product may do so for diverse reasons. The Coca Cola Company, for example, varies levels of sweetness, effervescence and package size according to local tastes and conditions. Effective marketing and business strategy therefore requires a segmentation of the market into homogeneous segments, an understanding of the needs and wants of these segments, the design of products and services that meet those needs and development of marketing strategies, to effectively reach the target segments. Thus focusing on segments is at the core of organizations’ efforts to become customer driven; it is also the key to effective resource allocation and deployment. The level of segment aggregation is an increasingly important issue. In today’s global economy, the ability to customize products and services often calls for the most micro of segments: the segment of one. Following and implementing a market segmentation strategy allows the firm to increase its profitability, as suggested by the classic price discrimination model which provides the theoretical rationale for segmentation. Since the early 1960s, segmentation has been viewed as a key marketing concept and has been the focus of a significant part of the marketing research literature. The basic concept of segmentation (as articulated, e.g. in Frank et al., 1972) has not been greatly altered. And many of the fundamental approaches to segmentation research are still valid today, albeit implemented with greater volumes of data and some increased sophistication in the modelling method. To see this, consider the most compelling and widely used approach to product design and market segmentation – conjoint analysis. The essence of the approach outlined in Wind (1978) is still evident in recent work by Toubia et al. (2007) that uses sophisticated geometric arguments and algorithms to improve the efficiency of the method. Other advances use formal economic theory to specify optimal consumer trade-offs – see Iyengar et al. (2007) for an application to non-linear pricing.
CHAPTER THREE
RESEARCH METHODOLOGY
Research design
The researcher used descriptive research survey design in building up this project work the choice of this research design was considered appropriate because of its advantages of identifying attributes of a large population from a group of individuals. The design was suitable for the study as the study sought to examine the effect of market segmentation on sales performance of beverage industries.
Sources of data collection
Data were collected from two main sources namely:
(i)Primary source and
(ii)Secondary source
Primary source:
These are materials of statistical investigation which were collected by the research for a particular purpose. They can be obtained through a survey, observation questionnaire or as experiment, the researcher has adopted the questionnaire method for this study.
Secondary source:
These are data from textbook Journal handset etc. they arise as byproducts of the same other purposes. Example administration, various other unpublished works and write ups were also used.
Population of the study
Population of a study is a group of persons or aggregate items, things the researcher is interested in getting information on the study effect of market segmentation on sales performance of beverage industries. 200 staff Cadbury plc was selected randomly by the researcher as the population of the study.
CHAPTER FOUR
PRESENTATION ANALYSIS INTERPRETATION OF DATA
Introduction
Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey. This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis. It will also show answers to questions relating to the research questions for this research study. The researcher employed simple percentage in the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
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.
Summary
Segmentation demands close attention to market defi nition, 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 identifi able and stable over time. Also, the benefi ts 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 profi les 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 identifi ed. 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 fi ner segmentation strategies. These strategies include microsegmentation, mass customization, and variety seeking. While potentially attractive fi ner segmentation strategies are more complex than other forms of segmentation and require comprehensive benefi t 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, fi nding 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
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.
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.
Reference
- Aderson, I. C. and Narus J.A. (1995). Capturing the value of supplementary seNices,’Harvard Business Review, NO.6 Vol. 3 pp. 75-83. “
- Czinkota, M.R.; Kotabe, M. ; and Mercer,’ D. (1997), Marketing Management; Massachusetts, U.S.A. Blackwell Publishers Ltd.
- Dalgc,.T.; and Maarten, J (1994). Niche Marketing Revisite~; European Journal of Marketing, .2,(4) pp.39-55.
- Frank, R.E.; Massy, W.F; and Wind Y. (1992). Market Segmentation,’ Englewood Cliffs” New Jersey; Prentice-Hall.
- Gremillion, J. (1997). Can Smaller Niches Bring Riches Media Week, pp 50-51. Kotler, P. (2000). Marketing Management Upper Saddle River, New Jersey: Prentice-Hall, Inc. ” .
- Marcus, B.H., and Tauber; E.M. (1997). Marketing Analysis and Decision Making. Boston: little, Brown and Company. ,’
- Meredith, G.; and Schewe, C. (1998). The Power of Cohorts; American Demographics, pp.22-29 .
