THE IMPACT OF MARKET SEGMENTATION ON SALES PERFORMANCE

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND TO THE STUDY

In every society, consumers are the most important thing to consider while operating as any business.
The satisfaction of these consumers now becomes the firm’s ultimate goal. In order too achieve this
market it takes a lot of marketing strategies.

One of such strategies is market segmentation, which is a customer oriented philosophy, since no firm
can produce and satisfy the whole market. Therefore, for any firm to produce and market its produce
and market its product effectively, it has to identify a sub-market within the aggregate market, select
and reach with distinct marketing mix.

Today studies have revealed that a marketer‘s success depends on adequate knowledge of his market
product and more specifically on his skills in effecting ownership transfers.

Sales performance uses raw data concerning the number of customers a sales associate speaks to
compared with the number of actual sales. It indicates the rate of customer loyalty to the business or a
specific employee. Enhancing sales performance can automatically enhance the number of loyal
customers.

Sales performance can also indicate whether a department is overstaffed. By comparing the sales
numbers based on the monetary amount spent on staffing, managers can determine ideal staffing
levels.

1.2 STATEMENT OF RESEACH PROBLEM

An understanding of the meaning of market segmentation on sales performance and it’s impact in
serving the different market segments is one of the inherent problems in most organization today.
Identifying sub-markets either as a competitive strategy or as a measure to burden the market and
promote a product to meet the needs of different customer group is a difficult task.

The marketer is faced with controllable variables like product, price, promotion and distribution as well
as uncontrollable variables like competition, economy, consumer demand, technology, socio-cultural
environment which summed involves huge financial burden.

The Nigerian Breweries Plc, is an organization where the concept of market segmentation can
successfully be applied. What management does is to identify and determine the segments existing in a
market, to understand the make-up of segments and their needs.
The strength of all these becomes imperative for marketing managers to focus more of their attention
on how best to develop strategies for it’s products, most of these problems on segmentation includes;

1. The need to know whether segmentation is a good marketing strategy on sales performance.

2. Whether it allows firms to develop specific products that really match the market demand.

3. Whether it allows for the development of specific promotional message for each segment of the
market.

1 .3 OBJECTIVES OF THE STUDY

The specific objectives of the research work are:

To examine the relationship between market segmentation and product development.

To examine the relationship between market segmentation and sales volume.

To ascertain the effect of market segmentation on organization’s profitability.

1.4 RESEARCH QUESTIONS

The following research questions are designed to guide the study;

What is the nature of relationship between market segmentation and product development?

What is the nature of relationship between market segmentation and sales volume?

What is the effect of market segmentation on organization profitability?

1.5 RESEARCH HYPOTHESES

The following hypotheses are formulated for the study:

HO: Market segmentation has no significant relationship with product development.

HO: Market segmentation has no positive relationship with sales volume.

HO: Market segmentation has no significant effect on organization profitability.

1.6 SCOPE OF STUDY

This study covers the impact of market segmentation on sales performance which is carried out on
Nigeria Breweries Plc, onitsha. The study will cover a period from 2014 – 2015 within which the report is
expected to be submitted to the department.

1.7 SIGNIFICANCE OF THE STUDY

The study will be of great benefit to consumers and individuals in their purchasing pattern. It will serve
as a base for further study in the same field or related field by students in tertiary institutions.

It will serve as a frontier of knowledge. It would be used to evaluate good or bad principles.

1.8 LIMITATION OF THE STUDY

To undertake a research work of this nature, constraints are bound to occur in the course of this study.
Some of the constraints encountered include:

FINANCIAL CONSTRAINTS

The researcher lacked the required fund to carry out a research of this magnitude to completion, but the
researcher was able to use a balance budget to execute and complete the study.

TIME CONSTRAINTS

The time required to carry out this project research is short and the researcher had to complete within a
particular time frame, therefore, a time management technique was used to finish the study within the
given time frame.

LACK OF ADEQUATE INFORMATION

Lack of adequate information causes a set-back to the study. Information that is vital to this study is
considered secret and such not released. Attitude of respondents are sometimes biased in their
response this affects the research work. Some give answers that are not objective, some withheld vital
information as well.

1.9 PROFILE OF THE COMPANY UNDER STUDY

The Nigerian Breweries limited was incorporated in November 1946 for the main purpose of brewing.
The original founders of the company were the U.A.C international limited and Heineken international
of Holland together with some local trading companies.
On the 2nd of June 1949, the first bottles of star rolled off the Lagos bottling lines, that day marked the
beginning of the brewery industry in Nigeria and ever since, it has held it’s place in the fore-front of the
brewery industry.

Considerable progress has been made in several aspect of Nigeria Breweries Plc. In 1960, the company’s
shareholders were only 1000, the success story states that now they have more than 50,000
shareholders. The company’s authorized share capital was N600 in 1946, today it stands at over N457
million.

Nigerian Breweries Plc, has a portfolio of eight quality brands such as: Star lager beer (1949), Gulder
lager beer (1970), Legend extra stout (1992), Heineken lager(1998), Goldberg lager (2011), life
continental lager (2011), Star lite lager (2014), Ace passion apple spark (2014).

Their alcohol-free drinks are as follows: Maltina (1972), Amstel Malta (1994), fayrouz (2006), climax
energy drink and malta gold (2011).

Together, the brands have facilitated it’s strong leadership position in the total brewed product market
in Nigeria. Their outstanding quality and consumer franchise compliment other company values and
capabilities to set N.B Plc as the house of quality, it also owns a farm at Gbakogi, Niger state.

MALTINA Maltina to most malt

drink consumers in Nigeria is synonymous with a wholesome food drink that is highly nourishing and
refreshing. The re-invigorating qualities of the brand are also widely acclaimed by young and old alike.
Maltina was the first locally produced malt drink. It was introduced into the market by Nigerian
Breweries Plc far back in 1976. From inception, the brand competed favorably against imported brands
like Dressler malta, Becks malta, maltex etc. By 1979, maltina had displayed virtually all the while
popular brands to gain 70 share of the market. This is clearly evident in the high consumer regard for
the international quality of maltina. This was achieved through significant differentiation of the product
profile with the addition of two new natural fruit enriched variants launched initially in the Lagos sales
area in September 1996. This positive development, was aimed at reversing the rather boring malt drink
unsafe occasion characterized by just one monotonous taste flavor day in day out for so many years.
The profile of each of the four variants of maltina is described thus:

MALTINA

MALTINA with STRAWBERRY

MALTINA with exotic fruits

MALTINA PINPEAPPLE

MULTI- VARIANT MALTINA features the following positive characteristics.

A truly natural ingredient base making the brand very much healthier than those of the other malt drink
brands that are made from synthetic components.

Extra nourishment from natural fruits in addition at the multi-vitamins and minerals in maltina.

Satisfying non-sugary fruits taste that was massively endorsed by Nigerians who have savored the extra-
rich tastes.

Apart from vitamin B1,B2, B6 AND C from natural –malt sources, the fruit enriched MALTINA variants
contain higher levels of vitamin C that are derived from strawberry, apples, oranges, black currant and
banana. Nigerian Breweries is a model of success in the private sector. The
company’s high price, profitability and successful operation can be traced to good product quality,
efficient management of operation and strategic penetration into the market environment through
segmentation of product others are proper understanding of consumer attitudes and habits.

OBJECTIVES OF N.B. PLC.

The sales force objectives are:

Prospecting: sales representatives are expected to find and cultivate new customers.

Communicating: sales force are supposed to be skillful in communicating information about the
company’s products and services to the existing potential customers.

Selling: the sakes representatives are expected to be effective in the art of salesmanship, that is being
effective in approaching, presenting, answering, objections and closing sales.

Servicing: sales force must provide various services to the customers, including consulting on their
problems, reading technical assistance, arranging, financing and expediting delivery.

Information collection: sales representatives are supposed to carry out some market research and
intelligent work, and supply sales on their customer calls.

Allocating: sales representatives are expected to evaluate customer profitability and advice the
company on allocating scarce product to their customers in times of shortage.

The company’s corporate mission is thus, “To remain the leading Beverage company in Nigeria
producing high quality brands, to meet the needs of identified viable sectors in the market.”