THE IMPACT OF MARKET SEGMENTATION AND PRODUCT POSITIONING IN A SERVICE INDUSTRY (A CASE STUDY OF UNITED BANK FOR AFRICA PLC, AHMADU BELLO WAY KADUNA)

 

ABSTRACT

This project work titled “The Impact of Market Segmentation and Product Positioning On Banking Service” with reference to United Bank for Africa Plc Ahmadu Bello way Kaduna. Contains six chapters. It a body of knowledge in the field of business, that marketing concept which are applied in the manufacturing industry are applicable in the banking sector. The focus of this project is base on the introduction of the subject matter, background of the subject matter, statement of the problem and the research of the objective for the study was also made. However, the research scope, significance of the study, including the limitation were highlighted and clarified, also definition of terms used during the study were stated. The literature reviews were carried out, also questionnaire were administered to collected data from the management and staffs of the bank and a simple percentage was used to analyze the collected data for easy understanding. Research population and sample size, a sample size of 12 were taken from the population of 24 of only the management and staff of the bank. The discussion of the result and proof of hypothesis have been carried out and the hypotheses are: the null and the alternate hypothesis.

Ho:  United Bank for Africa does not apply market segmentation philosophy to realize its objective.

H₁:   United Bank for Africa apply market segmentation philosophy to realize its objective.

Proof Hypothesis: The Null hypothesis is rejected while the alternate hypothesis was accepted. The study conclusively discovered that segmentation and product positioning is a vital tool for any business, it is recommended that United Bank for Africa should continue to segment, this is because, the net effect will be sustainable profitability. 

 

TABLE OF CONTENTS

Title page         -       -       -       -       -       -       -       -       -       i

Declaration      -       -       -       -       -       -       -       -       ii

Approval -       -       -       -       -       -       -       -       -       iii

Dedication       -       -       -       -       -       -       -       -       iv

Acknowledgement    -       -       -       -       -       -       -       v

Abstract   -       -       -       -       -       -       -       -       -       vi

Table of Content      -       -       -       -       -       -       -       vii

 

CHAPTER ONE

1.0      Introduction     -       -       -       -       -       -       -       1

1.1      Historical Background of UBA -       -       -       -       4

1.2      Statement of the General Problem   -       -       -       6     

1.3      Statement of Hypothesis -       -       -       -       -       6

1.4      Objectives of the Study    -       -       -       -       -       7

1.5      Aims of the Study    -       -       -       -       -       -       7

1.6      The scope and limitation of the study      -       -       8

CHAPTER TWO (Literature Review)

2.0   Introduction     -       -       -       -       -       -       -       9

2.1      Definition of Market Segmentation- -       -       -       9

2.2      Evolution of market Segmentation   -       -       -       11

2.3      Market Segmentation Strategies      -       -       -       12

2.4      Condition for Effective Segmentation -    -       -       17

2.5      Bases for market Segmentation       -       -       -       -       19

2.6      The Business Marketing Segmentation    -       -       24

2.7      Segmentation and profitability -      -       -       -       27

2.8      Benefit of marketing Segmentation -       -       -       29

2.9      Market Segmentation and Product Positioning        -       31

2.10 Product Positioning         -       -       -       -       -       34

2.11 Positioning Strategy -       -       -       -       -       -       36

2.12 Service Marketing Mix     -       -       -       -       -       41

2.13 Element in Service   -       -       -       -       -       -       43

2.14 Service Differentiation     -       -       -       -       -       44

CHAPTER THREE: Research Methodology

3.0   Introduction     -        -        -        -        -        -        -        45

3.1      Research Design      -       -       -       -       -       -       45

3.2      Research Population and Sample size     -       -       46

3.2.2Sample Procedure employ        -       -       -       -       -       47

3.3      Instrument for Data Collection        -       -       -       -       48

3.3.2Method of Data Analysis  -       -       -       -       -       51

CHAPTER FOUR: (Data Presentation and Analysis)

4.0   Introduction     -       -       -       -       -       -       -       52

4.1      Opinion of Respondent    -       -       -       -       -       52

CHAPTER FIVE: Discussion of result

5.0   Introduction     -       -       -       -       -       -       -       62

5.1      Discussion      -       -       --     -       -       -       -       62

5.2      Proof of Hypothesis         -       -       -       -       -       -       63

CHAPTER SIX (Summary, Conclusion and Recommendation)

6.0  Introduction     -       -       -       -       -       --     -       66

6.1  Summary         -       -       -               -       -       -       -       66

6.2  Conclusion      -       -       -       -       -       -       -       67

6.3  Recommendation     -       -       -       -       -       -       68

Bibliography  

Appendix       

CHAPTER ONE

1.0     INTRODUCTION

The most striking concept in the modern marketing is market segmentation, which is a customer-oriented philosophy. Consumer’s wants are the most vital reasons for any form of business operation. This philosophy of marketing is aiming at how best to reach the customer with the goods produced and services provided. For this study, product here refers to the services provided by the Banking industry.

 

This calls for a thorough and continuous study of consumers, as well as product positioning to satisfy, efficiently their numerous needs from time to time, forcing the marketers to resort to a lot of fundamental marketing strategies.

      

The market is heterogeneous in nature and consumers are widely spread and difficult to reach. No one business can produce and serve the whole market in its entirely. Therefore, it is more effective and efficient for any Bank to identify it’s sub-market(s) from the whole, select an d reach with distinct marketing mix within its available scarce resources.

 

Banking business entails investment in lump sum running to millions and billions of Naira. In segmenting the market, some certain, but fundamental questions should be addressed by the Manager, such as who are the customers?

Who are they?

What do they want?

Why and why do the buy?

       

Answer to these and other questions will assist the manager(s) in no small way to efficiently and effectively plan, implement and control all their operations.

 

Market segmentation can then be regarded as the act of dividing the entire market into distinct unit or segment, so that meaningful group of costumers might merit separate product within a given market. The impacts of market segmentation push a Bank or any business management to placed it product using unique marketing program suitable for each market segment.

The dynamism of marketing system and a competitive business environment ,require a continual refinement and increased sophistication in product positioning through market segmentation by managers, marketing scholars, authors and professionals have illustrate many a times the unlimited needs and diversity of consumers that necessitated this marketing philosophy.

 

In view of this, market segmentation concept is here applied to mean how an organization can determine and reach its sub-parts with its distinctive marketing mix (i.e.4ps product, price, promotion and place).

 

Kotler (1984) defines market segmentation “as act of dividing a market into distinct and meaningful groups of buyers who might merit separate product and or marketing mix”. He stressed that market segmentation requires the company to identify different basis for segmenting the market, develop profiles of the resulting market segmentation and as well as develop measures for the each segmented attractiveness.

 

This work is intended to reflect on the impact of market segmentation and product positing with a particular reference to United Bank for Africa plc Kaduna.

 

1.1   HISTORICAL BACKGROUND OF UNITED BANK FOR AFRICA KADUNA

United Bank of Africa was incorporated in Nigeria as private limited liability company on February 23, 1961 under the company’s ordinance (cap 37) 1922. The Bank took over the assets and liabilities of the British and French Bank ltd, which had carried on business in Nigeria since 1949 and commenced business officially on October 3, 1961.

 

The ownership and management of the Bank in the 1960’s was essentially made up of foreign Bank and three of those Banks remain shareholders till the present day. The ownership management structure of the Bank changed significantly during the 1970’s when the federal Government of Nigeria decided to acquire an equity stake in all major banks that all the time were controlled by foreign share holders. Between 1970 and 1980 the Bank experienced phenomenal growth, its branch network grew from 24 to 77 and the number of employees increased from 836 to 4500, while assess and deposit exceeded all billion respectively.

 

United Bank for Africa growth continued thorough the 1980’s, with total deposit increasing from N2.4 billion In 1981 to N11.9 billion in 1991 while total asset grew from N 2.5 billion to N 12.7 billion over the same period. One notable feature of its branch expansion was the opening of a representative’s office in New York in September 1982, which was later transformed to a fledged branching May 1984. A branch was also opened in Cayman Island IN 1988. To date, UBA remains the only Nigeria Bank and indeed sub- Sahara’s Africa Bank to have established and retained branches in the United State and Grand Cayman Island.

 

United Bank for Africa is determined to adapt its business to reflect market realities, changing customer’s needs and the changing aspirations of the bank can and should continue to expect increased responsiveness and enhanced value in the future. Today, UBA remains a strong, safe and reliable bank, and a competitive force to be reckoned with in the Nigeria banking industry. The bank’s intention is to buttress its achievement of the past and reposition itself to tackle the ever-changing challenges facing the banking industry in the 21^st century.

 

1.2      STATEMENT OF GENERAL PROBLEM.

Inadequate understanding of what market segmentation and product positioning means in saving the different market segments is one of the most prevailing problems in most organizations today. In identifying sub- markets either as competitive strategy or as a pressure to broadening the entire market and promoting products to meet the teeming needs of different target customers. This write- up will reveal ways in which an organization could adopt, an effective segmentation strategy that would help serve the numerous needs of the different target customers or improve in its service for better results.

 

1.3      STATEMENT OF HYPOTHESIS

H_O:   That United Bank for Africa does not apply the market segmentation philosophy to realize its objective.

 

H_I:    That United Bank for Africa apply the market segmentation philosophy to realize its objective.

 

1.4      OBJECTIVES OF THE STUDY

This study does not aim at studying market segmentation in all perspective, but to determine how this customer oriented philosophy strategy affects product positioning in a service industry. One of the aims is also to investigate the strategy adopted by the Bank in reaching its various customers.

 

1.5   AIMS OF THE STUDY

This study is a partial in fulfillment for the award of Higher National Diploma, Business and financial management (Marketing), Kaduna Polytechnic. It is hoped that the study will be of importance to the management of United Bank for Africa (UBA) to effectively and efficiently meet the various needs of its target customers, and to other user who might find the work effective. Also to the student who might be willing to undertake similar study and or study further from where this stops.

     

1.6   SCOPE AND LIMITATION

The study is being carried out to assess and evaluate the effects of market segmentation in market positioning of product by service industry.

 

To effectively and efficiently undertake a research work of this magnitude, it has some difficulties associated with it. Time is the vital factor for the success of any research work, for thoroughness and accuracy. I was faced with time constraint. This was due to academic pressure that characterized the final steps in the educational system. Similarly, effect were been frustrated by inadequacy of information given by the Bank officers in some information are classed as “top secret” which will never be revealed.