EFFECT OF MARKET SEGMENTATION ON PERFORMANCE OF BREWERY INDSUTRY
(A CASE STUDY OF GUINNESS NIGERIA PLC AND NIGERIA BREWERY PLC.)
This study examined the effect of market segmentation on performance of brewery
industry 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. On the Guinness Nigeria plc and Nigeria Brewery plc which is our case study.
The aim of this study is:
· To identify how a marketer can effectively apply segmentation techniques in brewing industry with a view to achieving consumer satisfaction and maximizing profit.
· To identify the basis for segmenting, the market.
· To examine among other things the benefit and difficulties of market segmentation.
· To identify the market targeting strategies adopted
· To evaluate the attractiveness of each segment
Methodology is the powerful weapon in the evaluation of research design. It also shows the procedure that has taken place before the research result is obtained.
Since the study is largely empirical in nature, efforts would be made to provide a comprehensive picture of the nature, and of the effect of market segmentation on performance brewery industry. From the findings carried out so far, the two companies GNPLC and NBPLC segment their market: the knowledge gained from applying market segmentation enable their marketers to have a separate marketing mix for each group of homogeneous consumers.
In conclusion from the questionnaires analysis and findings at the end of the research work. From the following findings summarized here in from these studies, it depicts that segmentation if well indeed. GNPLC and NBPLC major beneficiaries of segmentation.
TABLE OF CONTENTS
Table of contents v
CHAPTER ONE- INTRODUCTION
1. 0 Background to the study 1
1.1 Statement of problem 2
1.2 Objective of the study 3
1.3 Research questions 3
1.4 Research hypothesis 4
1.5 Scope of study 4
1.6 Significance of the study 4
1.7 Operational definition of terms 5
2.0 Literature Review 8
2.1 Historical background of case studies Guinness 8
2.1.2 Historical background of Nigeria breweries plc 9
2.1.3 GNPLC/NBPLC compared 10
2.2 Nature of segmentation 10
2.3 Market segmentation process 13
2.4 Basis for segmentation the markets 14
2.4.1 Geographical segmentation 15
2.4.2 Demographic segmentation 16
2.4.3 Psychographics 18
2.5 Condition necessary for successful market segmentation 21
2.6 Appraising the market segments 22
2.7 Choosing the appropriate market segments 24
2.8 Segmentation resulting from marketing strategy 25
2.9 Selecting a market targeting strategy 28
2.10. Benefits of segmentation 30
2.11 Limitations of market segmentation 32
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction 35
3.2 Research design 35
3.3 Population of study 36
3.4 Method of data collection 36
3.5 Method of data analysis 37
3.6 The data analysis instrument 38
3.7 Restatement of research questions 39
3.8 Restatement of research hypothesis 39
3.9 Validity of the instrument 40
CHAPTER FOUR: ANALYSIS AND INTERPRETATION
4.0 Introduction 41
4.1 Analysis of section A data analysis 41
4.2 Analysis of section B of the questionnaire 42
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary of findings 57
5.2 Recommendation 58
5.3 Suggestion for further studies 59
5.4 Conclusion 59
1.0 BACKGROUND TO THE STUDY
The impact and effectof market segmentation with the view of globalization throughout the world be it developing or developed economy, the supremacy being accordthe free market system cannot be over emphasized, that is achieving economic efficiency which ultimately leads to economic growth is free competitive market system otherwise refer to as the capitalist system.
Market segmentation is one of the steps into defining and target specific market. It is the process of dividing a market into distinct groups of buyer that require different products or marketing mixes.
A key factors to success in today'smarket place is finding subtle differences togive a business the marketing edge.
Business that target specially market will promotes us products andservicesmore 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 thereforeimperative that the market is segmented. Segmentation is also precipitated by the fact that the market is heterogeneous-made up of different consumers withdifferent needs and want.
He also viewed market segmentation as an act of identifying and profiling distinct groups of buyers who might require different products and/or marketing mix.
Opportunities inmarketing increase when segmented groups of clients and customers with varying needs and wants are recognized.
Market can be segmented or targeted using a variety segmenting consumers markets include:
· Demographical bases (age, family size, life cycle)
· Geographical bases (state, regions, countries)
· Behavior bases (product knowledge, usage attitude, response)
· 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 organization 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.
(a) Problem arising out of price fluctuations, low market and even closure of some firms.
(b) 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.
(c) Poor visionary management team or marketing personnel failure to identify segmentation variables. For example how to identify customer want, standard and acceptable quality. (Market variations).
(d) Failure to identify marketing mix (price, product, promotion and place) and targeting market.
(e) Inconsistency in production output and decline in product delivery.
1.2 OBJECTIVE OF THE STUDY
This study is carried out with the aim:
i. To identify how a marketer can effectively apply segmentation techniques in brewing industry with a view to achieving consumer satisfaction and maximizing profit.
ii. To identify the basis for segmentation the market.
iii. To examine among other things the benefit and difficulties of market segmentation.
iv. To identify the market targeting strategies adopted
v. To evaluate we attractiveness of each segment.
1.3 RESEARCH QUESTIONS
The following research questions will be asked in the study.
(a) Is there any significant relationship between market segmentation and organization performance?
(b) What would be a strategy put in place in order to achieve marketing mix such as, price, product, promotion and place in an organization?
(c ) How prepared is marketing personnel or management to identify the segmentation variables such as to identify customer want standard and acceptability quality?
(d) Is there a reasonable industrial polices put in place tostimulate production output and regularity in product delivery
(e) 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 HYPOTHESES
Ho: There isno significant relationship between market segmentation and organization performance?
Hi: There is significant relationship between market segmentation and organization performance?
Ho: There isno significant relationship between market segmentation and organization competitive advantage?
Hi: There issignificant 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) was 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 SIGNIFICANT 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 segmentationtools in performing better than competitors. UNPLC and NHPLC which are in thefocus 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 works will be of benefit to future researchers into the area 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 indicate 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 customers 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.