MARKET SEGMENTATIONS AS A TOOL OF ACHIEVING ORGANIZATIONAL SALES OBJECTIVES

1.1 Introduction

Market segmentation is defined as the subdivision of a heterogeneous market into homogenous subset of customer where any subset may conceivably be selected as a market to be reached with distinct marketing mix. Similarly, market segmentation is the process by which analysts study the consumption habits, needs, desires, and buying behavior of consumers to classify their company's overall consumer base into a number of different groups, then according to each group’ s differentiation, customers from each group should be targeted with different marketing methods. Accordingly, market segmentation is an important work done by analysts using big data. Conceptually, market segmentation also means partitioning of customers into segments, within which customers of similar needs are likely to exhibit similar behavior and hence to respond alike to the marketing mix (Weinstein, 2004).

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitations of the Study and Definition of technical terms.

1.2 Background of Study

In 1956 Wendell Smith pioneered the definition of market segmentation for marketing purposes and since then more than 1800 articles in the scientific journals have been published (Boejgaard et al., 2010). Market segmentation, in its tactical sense, often refers to such things as the use of particular statistical techniques for identifying groups of potential customers who have different needs, wants, tastes, and preferences. The market segmentation induces a company to introduce product differentiation strategies to serve the needs and wants of each segment and sub-segment. NBC plc uses this strategy to serve its customers- it uses the product features and advertising to convince the prospective buyers that its product are not different in outlook but better satisfying that the existing ones in the market. The product differentiation can be physical attributes like packaging, color size, weight etc. It can also be non-physical attributes like product image, price, quality, durability and dependability.

At this junction, it will be vital to discuss the sector that influences market segmentation policy they are:

Geographical Factors: In more precise terms, it deals with dividing the buyers into regions states, nations, climate etc.

Demographical Factors: In demographical factors, different groups are distinguished on the basis of age, sex, family life cycle, religion, nationality or social class.

Psychographic Factors: The psychographics form of segmentation takes into account difference in life styles or personalities line.

Sub-Market Segmentation: It consists of metropolitan or urban, semi-urban and rural areas.

However, market consists of customers and customers are likely to differ in size, resources, geography, product requirement, buying attitude and practices; organization attempting to develop and select their market, relate their resources to these areas of customers' differences and use them as bases to subdivide the large market into distinct subsets and select the subset which it has distinctive resources potentials to effectively satisfy. Meanwhile, organization undertakes this process of sub-dividing large market into subset to achieve the following benefits;

1. It allows small firms with limited resources to compete effectively in one or few segment of the larger market with its limited resources.
2. It enables firms develop specific product that really match the market demands.
3. It helps organizations develop specific marketing programmes for each segment.
4. It must have to be emphasized here that markets can only be segmented if sufficient information exists in the buyers and their characteristics.

Through better satisfaction of customers need and more focuses decision making, organization achieve their sales objective by the application of market segmentation concept.

The Nigerian Bottling Company Plc is the largest bottling company in Nigeria today. It bottles and markets the following range of coca-cola product; Coca-cola, Fanta, Sprite, crest Schweppes and five alive. The Nigerian bottling company plc operates under the franchise of coca-cola international. Coca-cola international has its home office in Nigeria since the year 1953, and at this inception of production, the company started with only one flavor and that was coca-cola but now there are altogether seven flavors namely; Coca-cola, Fanta, Sprite, crest Schweppes and five alive.

As previously mentioned, coca-cola international having one flavor at the inception of production makes use of undifferentiated marketing strategy, offering the same product and promotional images and method to the whole world in general. But because of the entrance of competitors in the soft drink industry, they now segment their market by having different kinds of flavors and bottling sizes. They have reached level of income earners and got their actual and potential customers’ worldwide.

The final basis for segmentation take into account benefits the buyers may be seeking from a particular product. The company can therefore, choose the benefit it wants to emphasize to create a product that diverse and direct a message to the group seeking that benefit. This study enables us to find out the impact of segmentation to NBC towards the achievement of its sales objectives and also, to know whether they have competitors in the industry and know how they cope with their marketing programmes. We will also, consider whether NBC uses product features and advertising to convince their prospective buyers.

Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the Market Segmentations as a Tool of Achieving Organizational Sales Objectives.

1.3 Statement of Problems

Investigation revealed that certain conditions or factors can make market segmentation of an organization to sell below expectation in the sales objectives; it can be the low income status of the customers or from the company.

Also, increase competition in the industry which has led to evaluation of marketing strategies used by the companies to outwit their competitors and adequately meet the needs and wants of their target market.

Changing and dynamic nature of the marketing environment is another problem that faces the organization in a bid to successfully segment the market in order to increase the sales objective.

The different marketing orientation in environment requires marketing approach and proper understanding of this, as required for market segmentation to be effective.

1.4 Aim and Objectives of Study

The aim of the study is to evaluate the market segmentation activities of Nigeria Bottling Company that can help achieve the company's sales objectives. In achieving this aim, the following specific objectives were laid out as follows:

1. To find out if NBC apply segmentation in the marketing of its product and how it is executed;
2. To identify the problem militating against effective segmentation of its market;
3. To determine the causes of decline in sales turnover and market share;
4. To achieve increase sales volume in the area under study; and
5. To determine how market segmentation should be carried out to attain higher level of sales turnover.

1.5 Research Questions

The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:

• Does the problem emanate from the quality of drinks they produce?
• Is it wrong quality of drinks they produce from question 1 above?
• Is it wrong identification of target market from question 1 above?
• Has there been actually a reduction in the firm's market share and sales turnover?
• Does the company use proper marketing programme to get to their customers?

1.6 Research Hypothesis

In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.

Hypothesis One

• H0: The Company does not make use of proper marketing programme to get their customers.
• H1: The Company makes use of proper marketing programme to get their customers.

Hypothesis Two

• H0: There is no need for improvement on the company's market segmentation strategies.
• H1: There is need for improvement on the company's market segmentation strategies.

1.7 Significance of Study

Business in Nigeria presently is far from being an easy Endeavour meanly because of the prevailing economic crisis in Nigeria in particular and the world in general. This has prompted businessmen to be careful, that is, by making use of official figures gotten from research before investing in any venture.

The findings of this study go a long way in improving sales turnover and market share of the firm. This will invariably lead to an increase in general profit generation and better revenue position.

Moreover, the findings would help the firm in overcoming most of its constraints and problems like the firm's poor competitive stand and high selling expenses. It is also, expected that most of the findings shall help the firm to reduce its target markets to suit the current need of the customers' satisfaction and consequently lead to increase sales turnover.

1.8 Scope of the Study

The scope of the research is focused on the Market Segmentations as a Tool of Achieving Organizational Sales Objectives using Nigerian bottling company (NBC) Plc. Owerri, Imo State as a case study.

1.9 Limitations of the Study

During the course of this study, many things militated against its completion, some of which are:

1. Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
2. Research material: availability of research material is a major setback to the scope of the study.
3. Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
4. Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

1.10 Definition of Terms

NBC: Nigerian Bottling Company.

Target Market: It represents the set of buyers of the firm's product that commands the highest profitable sales.

Consumers: These are individuals who purchase or have the capacity to purchase bar soap offered or sale in the market in order to satisfy personal or have needs, wants or desires.