Effect Of Market Segmentation On performance Of Brewery Industry (Case Studies Of Guinness Nigeria Plc And. Nigerian Breweries Plc)

CHAPTER ONE

INTRODUCTION

1.0     BACKGROUND TO THE STUDY

The impact and effect of market segmentation 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.

Market segmentation is one of the steps into defining and target specific markets. It is the process of dividing a market into a distinct groups of buyers that require different products or marketing mixes.

A key factors to success in today’s market place is finding subtle differences to give a business the marketing edge.

Businesses that target specialty markets will promotes its products and services more 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 satisfactorilysatisfy the whole market or industry, it is therefore imperative that the market is segmented. Segmentation is also precipitated by the fact that the market is heterogeneous­made up of different consumers with different needs and wants.

He also viewed market segmentation as an act of identifying d profiling distinct groups of buyers who might require different products and/or marketing mix.

Opportunities in marketing increase when segmented groups of clients and customers with varying needs and wants are recognized.

Market can be segmented or targeted using a variety of factors. The bases for segmenting consumers markets include:

·        Demographical bases (age, family size, life cycle)

·        Geographical bases (state, regions, countries)

·        Behavior bases (product knowledge, usage attitudes,

·        response)

·        Psycho graphical bases (life style, values, personality)

Today, it could be generally agreed that almost all the manufacturing industries especially breweries, practicemarket segmentation due to tremendous benefit derived from it.

1.1     STATEMENT OF THE PROBLEM

Today, it has been noted that many organizations 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)     Problems 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 the segmentation variables. For example how to identify customers 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     STATEMENT OF OBJECTIVE

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 maximizingprofit.

ii.      To identify the basis for segmenting 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 the 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 customers want standard and acceptability quality?

d)    Is there a reasonable industrial policies put in place to stimulate 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 HYPOTHESIS

Ho: There is no significant relationship -between market segmentation and organization performance?

Hi: There is significant relationship between market segmentation and organization performance?

Ho:There is no significant relationship between marketsegmentation and organization competitive advantage?

Hi:There is significant 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) were 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     SIGNIFICANCE 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 segmentation tools in performing better than competitors. GNPLC and NBPLC which are in the focus 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 work will be of benefit to future researchers into the areas 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 thetransfer 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 indicated 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, concernedwith persuading customers to acquire the product, or servicewhich best matches an organization capability with itscustomer’s wants.

SEGMENTATION: Segmentation is the identification of customer groups that respond differently than other customergroups to competitive strategies which require theconceptualization, 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.

PERFORMANCE: This is an act of accessing the impact of segmentation of market product from the consumers. OR thefeedback received as a result of market segmentation of product.

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