EFFECT OF MARKET SEGMENTATION ON SALES PERFORMANCE OF BEVERAGE INDUSTRIES
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EFFECT OF MARKET SEGMENTATION ON SALES PERFORMANCE OF BEVERAGE INDUSTRIES
Chapter one
INTRODUCTION
1.1 Background of the Study
Marketing has evolved over time from numerous concepts and ideologies, including production, sales, and product conceptions.
The marketing concept is based on the customer orientation philosophy, which seeks to identify unsatisfied consumer needs and wants, and then develops goods and services aimed at filling and satisfying those needs.
While not all organisations practise this concept, successful firms do. Given the severe and expanding competition, the global search for profitable sites among marketers of goods and services,
it has become necessary for enterprises to implement strategies in order to succeed, grow, and remain in the market in order to reach acting organisational goals.
Marketing strategies are created using marketing objectives and wider organisational goals.
Marketing techniques include the marketing purpose of increased sales, higher market shares, and growth market penetration awareness, to name a few. To attain these aims and objectives, marketing evaluations and strategies are created and implemented.
Because enterprises cannot efficiently service all of them in a large market, the world’s population has grown and consumers’ purchasing criteria, needs, and traits have become more diversified.
It is unavoidable to identify those sections of the market that are profitable and can be served effectively given the available organisational resources and capabilities, necessitating the use of effective market segmentation techniques.
Marketing effect and segmentation are always customer-oriented, which is compatible with the marketing principle. Market segmentation is the process of breaking a market into separate and significant subsets of customers who require a targeted call during a marketing campaign to meet their demands.
Many businesses in the past used the mass marketing notion as a sales turnover strategy, focusing on mass production, mass distribution, and mass promotion of a single brand of items to all customers.
The premise for this method was that it creates the greatest potential markets, which leads to the lowest costs, including production costs, overhead costs, and marketing costs, resulting in cheaper pricks or greater margins.
However, in this day and age of fierce rivalry, multiplication of marketing programs/functions, and increased customer advancement in education and awareness, businesses no longer practise “one size fits all” marketing.
Thus, in order to increase profitable sales and customer happiness, mass marketing is being phased out in favour of market segmentation, which now recognises distinctions in segment needs, wants, and responses to marketing campaigns.
Market segmentation extends beyond product design considerations to include price, promotion, and distribution variables, as well as an overall understanding of each segment’s demands in order to establish a suitable marketing mix.
Firms do not engage in marketing segmentation unless a thorough analysis of customer behaviour within the market is completed. A thorough study of customer effectiveness in marketing research is essential for a better understanding of their distinct and homogeneous qualities.
This ensures the grouping of clients with comparable requirements and characteristics. Essentially, it comprises of a huge identifiable group of people who share similar demands, shopping habits, geographical location, and purchasing requirements, hence market segmentation is a strategy that businesses should use to improve their success.
To a considerable extent, it is the process of splitting a heterogeneous market for products and services into many segments, each of which is homogeneous in all significant ways.
Management thus chooses one or more of these market segments as the organization’s target market(s), and based on an understanding of their needs and desires, a matching marketing mix is envisaged, developed, and directed towards satisfying them at a profit.
Most importantly, segmentation allows the form to focus its marketing efforts and resources on the most profitable target market, allowing it to complete efficiently in one or two segments.
To be more specific, there are numerous dimensions or ways to market segmentation.
Geographic, demographic, behavioural, and psychographic variables, for example, are used to divide the overall market into separate groups with similar characteristics.
Increasing sales requires the proper evolution of marketing segmentation as a strategy. Because of the prospect involved in adopting market segmentation, firms desiring to achieve success embark on dividing the total market into segments that can be reached and satisfied efficiently and at a profit.
In consideration of the role market segmentation plays in increasing sales volume, the researcher has decided to conduct a study to identify its importance, bases/approaches, limitations, and influence on a customer-oriented organisation, particularly Cadbu.
For any organisation to succeed in its marketing efforts. It is critical for the marketed to understand the market segmentation plan.
It enables the marketer to segment the market based on factors such as income, age, and geography, and then change product offerings to fit the specific target market.
Marketing experts have stated in various ways that a company cannot market its product to the entire market; instead, it must identify a segment of the total market that it can successfully source with its product.
As a result of these factors, the concept of market segmentation is used as a means for organisations to break down the total market into submarkets where a form can aim and reach with its distinct marketing mix.
Market segmentation necessitates that the organisation find multiple bases for segmenting by market, produce profiles of the resultant market segments, and develop measures of each segment’s attractiveness. Market segmentation must stay an inedible mark for markets to access a specific market.
Philip Kotler defines market segmentation as “the act of dividing a market into distinct meaningful groups of buyers that may merit a separate product and/or marketer mix.”
1.2 Statement of the Research Problem
Every organisation has the challenge of raising its profitable state volume.
Both service and physical markets want to increase profit and sales turnover, and these goals can only be met if businesses understand and use efficient market segmentation strategies.
Firms are also faced with the challenge of identifying and selecting specific market targets and satisfying them by combining marketing mix elements; consequently, market segmentation recognises that every market is made up of distinct segments consisting of buyers with varied wants.
The task of properly comprehending consumer needs and wants, identifying multiple homogeneous customer qualities according to a specified dimension, adequately grouping them together, and developing an efficient marketing mix to fit these characteristics and purchasing requirements.
All represent fundamental marketing challenges for businesses.
Marketing segmentation is one of the methodologies used to evaluate marketing campaigns. Segmenting markets into subsets with the intention of pleasing consumer groups while also increasing sales volume and profitability for the overall organisation and stakeholders is an objective and goal of any firm that uses the marketing idea.
Most organisations have the challenge of establishing the best pricing, promotional, and distribution strategy to meet the needs of their diverse client base.
Though some businesses find marketing segmentation strategy unpleasant because they perceive it to be a costly and time-consuming task, this is due to a lack of understanding about its value to consumer happiness.
The significance of market segmentation as a technique for enhancing sales volume has become a study issue.
1.3 A Brief History of Cadbury Nigeria
Cadbury Nigeria Plc is a public liability corporation that manufactures cocoa-based products. Its product range includes food, beverages, and sugar.
The company began in 1956 as Cadbury Fry Export, with an office at A9 Orange Road, Apapa, and sales of Pronto, a cocoa-based chocolate and drink, from a rented warehouse.
Bournvita Leading Food was introduced in 1960; initially, both goods were bulk imported and packed at Apapa’s warehousing factory, but… Based on its track record of success, it quickly became evident that much more needed to be accomplished.
The organization’s business is focused on providing consumers with high-quality food and other things that are essential for the well-being and subsistence of all family members.
The company produces Bournita, Goody-goody, éclair, batternut, tomapep, Maggi, and Knorr cubes.
The combined strength of its brand, supported by a few responding distribution networks that reach all parts of the country. This gives the organisation a distinct competitive advantage in the Nigerian market setting or place.
Cadbury employs around 2000 people, including some of the best-trained technocrats in the country and a manager who oversees more than 20 locations statewide.
Its distribution approach makes use of direct client depots, distributors, trade businesses, and a sales crew.
The organisation is committed to its employees and consumers, hence it has established and allowed rooms for the following.
1. Creating an environment in which all employees may engage, express concerns, and share opinions with the assurance that they would be appropriately considered.
2. Encourage free communication between management and staff.
3. The company employs sales promotion to address poor or low sales by raising product demand and market share.
Consumers
1. The corporation watches consumer wants and needs.
2. Establishing and sustaining high standards of quality.
3. Developing new technologies for products that benefit the environment.
4. The corporation employs periodic sales promotions to increase demand, get new consumer trials, and foster brand loyalty.
1.3 PURPOSE OF THE STUDY
The goal of this research work is explained below.
a. Determine the importance of market segmentation to sales reduction.
b. To identify the significance of corporations adopting the effect of market regimentation in order to fulfil the organization’s goals of profitability and customer happiness.
c. Investigate the dimensions and bases of market segmentation, as well as their relationship to increased sales.
d. Determine the extent to which the organisation in question (Cadbury Nigeria Plc) practices market segmentation.
b. To highlight the limitations of the study.
f. At the conclusion of the study, it is expected to make relevant recommendations to the firm on how to implement market segmentation.
1.4 Significance of the Study
This research activity, in addition to being a prerequisite for partial fulfilment of the Higher National Diploma, will bring value and benefit to the researcher, as well as other persons and groups.
This research would benefit Cadbury Nigeria Plc because the findings and recommendations will assist them better their marketing activity.
The project will also benefit my fellow student and other students at their institutions who are enrolled in courses comparable to mine.
Lecturers at Kaduna Polytechnic would also benefit from the knowledge gained via research.
The information in this project work will help marketing businesses rethink their segmentation approach and how they employ marketing resources and effort in their marketing activities.
The study will also broaden the researcher’s knowledge base while they undertake this investigation.
1.5 Statement of Hypothesis
Alternative hypothesis (H1)
Market segmentation is critical for increasing sales volume.
Null Hypothesis (Ho).
Market segmentation is not necessary for improving sales volume.
The acquired data was evaluated using the sample percentage and further discussed, and the formulated hypothesis was proven using the chi-square test.
The researcher adopted the alternative hypothesis (H1).
Rejecting the null hypothesis (Ho).
The researchers discover additional items in the study, such as segmentation tactics used by the organisation in its marketing efforts.
The researcher concludes that Cadbury Nigeria Plc is a marketing-oriented company.
The researcher makes numerous recommendations, including that the corporation engage in additional promotional initiatives to raise knowledge about its products and operations.
1.6 Limitations or scope of the study
This research examination will focus on market segmentation and its relationship to increased sales volume and profitability.
The study will highlight segmentation dimensions such as geographic, demographic, psychographic, and behavioural segmentation approaches. Additionally, the techniques for identifying marketing segments will be explained.
The study will list management adaptation options for selecting one or more segments as the target market.
At the conclusion of the investigation, the researcher will make a number of recommendations to Cadbury Nigeria Plc regarding market segmentation and its ability to enhance sales volume.
The study will emphasise the approach utilised to collect all essential information from the sample respondents.
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