EFFECT OF MARKET SEGMENTATION ON PERFORMANCE OF BREWERY INDSUTRY 

CHAPTER ONE

INTRODUCTION

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.