EFFECT OF MARKET SEGMENTATION ON PERFORMANCE OF BREWERY INDUSTRY (A CASE STUDY OF GUINNESS NIGERIA PLC AND NIGERIA BREWERY PLC.)

ABSTRACT

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

Title                                                                                         i

Certification                                                                            ii

Dedication                                                                               iii

Acknowledgment                                                                     iv

Table of contents                                                                     v

Abstract                                                                                  viii

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

CHAPTER TWO:

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

BIBLIOGRAPHY                                                                   61

APPENDIX                                                                                      62

QUESTIONNAIRE                                                                 63

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 developing or developed 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 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's market place is finding subtle differences to give a business the marketing edge.

Business that target specially market will promotes us 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 satisfactorily satisfy 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 heterogeneous-made up of different consumers with different 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 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 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 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 HYPOTHESES

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 market segmentation 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) 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 segmentation tools in performing better than competitors. UNPLC and NHPLC which are in the focus will benefit from it.