The Effect of Market Segmentation and Positioning of Company Performance
Chapter One
Objective of the study
The objectives of the study are;
- To know what market segmentation and positioning is all about as it involves the companies under study.
- To know if actually the companies or organization actually applies market segmentation and positioning in the sales of its product.
- To know the method or strategy the companies actually use in performing its functions.
- To know how the company’s sales is structured. This could be geographically, regionally or customer structured and if it can determine or know its target customers.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Market segmentation:
As long as companies have been competing for sales, markets have been separated into smaller homogenous markets (Ginter 1956) . According to the founder of the market segmentation concept, Smith (1956), market segmentation is a brief and temporary phenomenon. Effective use of this tool may result in more official recognition of market segments through seeing groups of customers as individual markets. Market segmentation refers to looking at a heterogeneous market as smaller homogeneous markets, in order to be able to change product preferences to significant market segments’ needs (Smith 1956) . These segments will be subjected to similar marketing activities in order to create required behaviour (Söderlund 1998) . Thus, the underlying principle for segmentation is that the market is fragmented; hence, a homogenous market does not exist (Beane and Ennis 1987) . Engel (1972)5 further contends the notion that consumers are different from each other, and that these differences influence market demand. Serving all consumers is almost like mission impossible; people have different needs and wants and therefore they cannot be targeted in the same manner (Vyncke 2002). To find those consumers a company can satisfy, it is of significant importance to undertake market segmentation. In marketing literature, segmentation is a central and prevailing concept, which offers directives regarding companies marketing strategies. Segmentation constitutes the focal point in marketing strategy and has been extensively adopted by companies for as long as companies have tried to differentiate themselves from competitors (Kamineni 2005) . Hunt and Arnett (2004)8 continue and argue that one of the most established notions in modern marketing is market segmentation. According to Engel (1972), companies adopting segmentation receive a wide range of advantages, especially concerning information that can be obtained. Weinstein (2006) state that companies must gain the consumers’ trust and win them over and to accomplish this, companies must understand consumers’ needs and wants in the segments where they struggle. Accordingly, by using the obtained information from segmentation, companies can easier understand consumers’ wants and needs (Engel et al 1972). As one of the aims with advertising and promotion is to inform market segments of the product or service existing on the market, this information can be applied in order to direct companies marketing activities more effectively (Smith 1956). Companies can then better adjust to shifting market demands and plan more distinct offerings to consumers (Engel et al 1972) . To gain competitive advantages, companies should identify those segments with possibilities for the firm, target the particular group of customers and finally create a certain marketing mix aimed to reach each segment (Hunt and Arnett 2004) . Market segmentation often helps companies achieving better profitability than expected Wind (1978) , and one of the reasons why segmentation is such an accepted marketing tool is because it contributes to increased sales compared to mass marketing approaches Cross (1999)
Bases for market segmentation:
Since Smith (1956), first introduced the notion of segmentation, numerous ways for segmenting the market has been widely discussed in marketing literature (Mathur 200611; Vyncke 2002 ). However, independent of which segmentation classification, they all presume that consumers can be divided into homogenous clusters. Thus, companies employ segmentation as a tool to identify desirable markets, and tailor the marketing mix. (McGoldrick 2002) For a company to successfully target its wanted group, the segmentation strategy has to be completely accurate (Solomon 1994), and if companies have well defined and penetrated market segments, the firm will get a deeper position on the market (Smith 1956).
CHAPTER THREE
RESEARCH METHODOLOGY
Research design
The researcher used descriptive research survey design in building up this project work the choice of this research design was considered appropriate because of its advantages of identifying attributes of a large population from a group of individuals. The design was suitable for the study as the study sought to the effect of market segmentation and positioning of company performance
Sources of data collection
Data were collected from two main sources namely:
(i)Primary source and
(ii)Secondary source
Primary source:
These are materials of statistical investigation which were collected by the research for a particular purpose. They can be obtained through a survey, observation questionnaire or as experiment; the researcher has adopted the questionnaire method for this study.
Secondary source:
These are data from textbook Journal handset etc. they arise as byproducts of the same other purposes. Example administration, various other unpublished works and write ups were also used.
Population of the study
Population of a study is a group of persons or aggregate items, things the researcher is interested in getting information on the effect of market segmentation and positioning of company performance. 200 staff of Dangote group of company, Lagos state was selected randomly by the researcher as the population of the study.
CHAPTER FOUR
PRESENTATION ANALYSIS INTERPRETATION OF DATA
Introduction
Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey. This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was on the effect of market segmentation and positioning of company performance. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of market segmentation and positioning of company performance
Summary
This study was the effect of market segmentation and positioning of company performance. Four objectives were raised which included: To know what market segmentation and positioning is all about as it involves the companies under study, to know if actually the companies or organization actually applies market segmentation and positioning in the sales of its product, to know the method or strategy the companies actually use in performing its functions, to know how the company’s sales is structured. This could be geographically, regionally or customer structured and if it can determine or know its target customers. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of Dangote group of company. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made managers, production managers, senior staffs and junior staffs were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies
Conclusion
The study further shows that organizations need to move from mass marketing to marketing segmentation to achieve an increase in sales. Once an organization can identify the market segment it wants to focus on all relevant marketing tools and resources can be used towards trying to meet the needs of that customer segment.
Recommendation
The following recommendations have been made, that will assist organizations on how they can use effective marketing segmentation to increase the level of sales and market share:
- Organization need to get professional marketers that can enlighten and train their organization as a whole on marketing segmentation, and marketing strategies as a whole.
- Secondly, organizations need to determine who their target customers are, and make sure that the organizations resources are focused on the most viable and profitable of the target customers from that segment.
- Finally organizations need to understand that once these customer segments are consistently satisfied, then demand will increase, which intern means sales will increase, therefore an increase in revenue of that organization.
References
- James L. Ginter (1956), “Market Segmentation, Product Differentiation, and Marketing Strategy”, the Journal of Marketing, April, p10. 2.
- Smith, W. R. (1956), “Product differentiation and market segmentation as alternative marketing strategies”, Journal of Marketing, July, p 3–8. 3.
- Söderlund M (1998), “Customer satisfaction and its consequences on customer behaviour revisited: The impact of different levels of satisfaction on word-of-mouth, feedback to the supplier, and loyalty”, International Journal of Services Industry Management, Vol.9, Issue 2, p 169-188. 4.
- Beane, T.P. and Ennis, D.M. (1987), “Market Segmentation: A Review”, European Journal of Marketing, Vol.21, Issue 5, p 20-42. 5.
- James F. Engel (1972), “The current status of consumer behaviour research: developments during the 1968-1972 period”, in Proceedings of the Third Annual Conference of the Association for Consumer Research, Association for Consumer Research, p 576-585 6.
- Vyncke, P., (2002), “Lifestyle Segmentation: From Attitudes, Interests and Opinions, to Values, Aesthetic Styles, Life Visions and Media Preferences”, European Journal of Communication 2002.
- Ampadu, S. and Osei-Frimpong, A. (2009). Overview of the Banking Industry in Ghana, Research Department, Merchant Bank Ghana, vol 77, pp 1-16.
- Anderson, E.W., Fornell, C., and Lehmann, D.R., (1994). Customer Satisfaction, Market Share, and Profitability: Findings from Sweden, Journal of Marketing, (July), pp. 53-66.
- Andrew, K., (2003). Market segmentation and strategic implications in a deregulated banking services sector in Zimbabwe, Unpublished MBA Thesis. University of Natal, Durban.
