THE IMPACT OF MARKET SEGMENTATION AND PRODUCT POSITIONING IN A SERVICE INDUSTRY

CHAPTER ONE

1.0                  INTRODUCTION

Marketing is a business that identifies unfulfilled needs and wants defines and measures their magnitude determines which target market, the organisatioon can best serve and decide on appropriate product, services and program to serve these markets.

Consumer are the most important things to consider while operating any business environment. It must therefore be clear that a through and constant study of the consumers is one thing and another entirely those needs of the consumer  at a profitable level, hence marketers resort to a lot of strategies.

Many people are confusing marketing for its sub-functions such as advertising selling and merchandising. But an authentic marketing is not the act of selling what you can make but knowing what to make. It is art of identifying and understanding customers profit to the producers and benefits for the stakeholders.

Market leadership is a gained by creating customer services therefore marketing can be viewed as customer oriented philosophy. It is the creation and delivery of a standard of living. Organization must try to identify a particular market that is more attractive and that can be managed affectively and profitable. Market segmentation attempts to identity significant difference in buyer characteristic which is used to determine which target market should be aimed at and the type of product to be given to that market.

Market segmentation can be defined as the act of dividing a market into distinct parts. A market consists of buyer and these buyers differ in one or more respects.

They may differ in wants resources and geographical locations. Buying attitude and buying practices. Any one of all these can be used to segment a market in order to serve the customer more effectively and efficiently.

Market segmentation can therefore be defined as the act of dividing a market into distinct parts, that is the process of dividing the total heterogeneous market for a product into several submarket or segment each of which tends to be homogeneous in all. Significant aspects, it can also be define as the act of dividing a market into distinct and meaningful groups of buyers who might merit separate product and or market mixes.

Segmentation strategy helps the organization to find reaction in customer trait and producing in line with those characteristics so as to conform to those identified needs of the customers.

1.1     BACKGROUND OF THE STUDY

It is obvious that companies can not connect all customers in large broad or diverse market and as a result of the needs to divide market in to group of consumer or segments with distinct needs and wants. It therefore becomes paramount for a company to identify which market segment to serve better. Before the objective can be achieved, it is required that a keen understanding of consumer behaviour and careful strategic thinking. To develop the best marketing planning, managers need to understand what makes each segment unique and different. Modern marketers in their quest to study consumer behaboviour and responses to benefit offer by the product for example do people want quantity rather than low price. In an attempt to increase benefit to consumers, this will aid marketers to know how best to satisfy each category of these customers. It required a keen understanding of consumers’ behaviour and careful strategic thinking.

The over all intent is to identify groups of similar customers and potentials customers to prioritize the groups to address to understand their behaviour and to respond with appropriate marketing strategic that satisfy the different performance of each choosen division and thereby improve the company revenue. This can however be achieved through a distinct division of groups of buyers who might requires separate product and for marketing mix known as market segmentation.

According to Michael Porter (1970 P:37) with the right segmentation, the right list can be purchased advertising results can be improved and customer satisfaction can be increased leading to better reputation

Nelson (1984 page 125) explain that united states in the 18 century provides a broad segmentation of the population of their country based statistical analysis of house hold and geo-demogrpahic data. The recent times market has been divided based on the number of general criteria. Such as industrial or public versus private, although industrial market segmentation is quite different from consumer market segmentation but both have similar objectives. Regardless of which type of segmentation a marketer uses, the secret behind the marketing programmes recognize customer differences and efficiently highlight the differences to offer maximum satisfaction to every division.

1.2     STATEMENT OF THE PROBLEM

The quest for increasing the sales of consumer goods is every organization’s problem. Both marketers of services and tangible seek to enhance profit and sales turnover and the objective of profitability can only be achieved when firms properly understand and apply the marketing segmentation strategy. Firms are also faced with the difficulty at identifying and selecting particular market target and satisfying them by blending the marketing mix elements thus marketing segmentation, recognize that every market is made up of distingishedable segments consisting of buyers with different needs. The task of clearly understanding consumer needs and wants identifying various homogeneous customer characteristic according to an outlined dimension in order to group them together adequately and to effectively develop marketing mix to match these characteristic and buying requirements. All posses a fundamental marketing problem to firms.

Marketing segmentation is one among the various strategic concept that form the basic for marketing programs. Segmenting markets into subsets with the aim of satisfying customer groups equally sales of consumers goods and profitability for the total organization and the stakeholders is an objective and goal of every business that practices the marketing concepts most organisation encounter the problem of determining the appropriate pricing promotional and distribution strategy to adopt in satisfying the numerous customers. Though some firms fined it excruciating to marketing segmentation strategy due to their inclination of the strategy as an expensive and time consuming exercise. This is because of inadequate information on its importance of marketing segmentation and its impact on sales of consumers goods has become a research problem.

1.3     OBJECTIVES OF THE STUDY

The purpose of this research work is described below:

1.     To establish the relevance of marketing segmentation and its effective on product positioning

2.     To enumerate the importance of firms adopting the strategy of marketing segmentation in order to achieve organizations objective of profitability and customers satisfaction

3.     To examine the dimensions and bases for segmenting in market and their relationship on product positioning

4.     To determine the degree to which the organisation in question (MTN) practices market segmentation

5.     To highlight the limitations of the marketing segmentation

1.4     SIGNIFICANCE OF THE STUDY

This research work a part from being an essential requirement for the partial fulfillment of Higher National Diploma in Marketing, it will be an added value and benefit to the researcher, other individual and groups. The project will beneficial to MTN plc, as the findings and recommendations will help to improve their marketing activities. The project benefits my fellow student and student of other institutions in related course

The information in this project work will enable marketing firms re-appraise the segmentation strategy applied in their business and make better use of marketing resources and efforts in their marketing activities. The study will also widen the knowledge base on the researcher in the curse of conducting the research.

1.5     RESEARCH QUESTION

1.     What are the relevance of marketing segmentation and its effective on product positioning in the organisation?

2.     What are the benefits of adopting the strategy of marketing segmentation in order to achieve organizations objective of profitability and customers satisfaction?

3.     What are the dimensions and bases for segmenting in market and their relationship to product positioning?

4.     What is the degree to which the organisation (MTN) practices market segmentation?

5.     What are the limitations of the marketing segmentation?

1.6     SCOPE OF THE STUDY

The study covers all staff of the organization (MTN which is used as the case study) it is the intension of the researcher to fined out how this company’s segment its staff in relation to product positioning and what has been the outcome of this system to the organization as a whole and relations of the employee of the organization when appraised.

1.7     LIMITATION OF THE STUDY

It is a tasking job to conduct research of this nature and thus a number of constraints are prevalent in the course of the investigation. Financial constraint is one major problem encountered by the research because of the depressed economy and limited fund/financial resource available to the researcher for the study.

This has retrained the researcher from conducting a detailed survey. Transportation to and from, to various branches of MTN in Kaduna posses a lot of problem during the process of  obtaining information for the research work. The duration of time required for the research work is too short this constraining the liberty to search further for more information.

The company’s employee and the executives could proved uncooperative during the search of data about the company’s activities in relation to subject matter. The executives were elusive because of the fear of exposing crucial financial information regarding the firm to competitors.

Unavailability of books to source for relevant data posed a problem, the Kaduna polytechnic library is stocked with very few books and those available were outdated or irrelevant to the research topic.