EFFECT OF MARKET SEGMENTATION AND POSITIONING ON COMPANY PERFORMANCE
ABSTRACT
This study is a research into the effect of market segmentation and positioning on company performance in selected textbook publishing firms in Owerri. The study seeks to find out how market segmentation and product positioning help the firms in achieving greater part of its sales objectives. In an attempt to carry out the study effectively, a total sample of sever firms were judgmentally selected this simple random sampling technique and the chi-square statistical tools was used for this study: From the analysis of the data was deduced that the selected firms consider the application of market segmentation and positioning as why important part of firms’ sales objectives. The selected firm also uses product positioning to achieve their aims. The firms marketing operations are regionally structured however, it was noted that the firms are selling to all the academic field. Finally, the adequate provision of funds. There should be adequate provision of funds. The firms should engage more in market research and survey the organization should put in more effect to train their sales executive. They should improve on advertising and other sales promotional mix. Lastly, the issue of transportation and distributional facilities should be improved.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The subject matter of market segmentation is the dissagregation of the population into separate groups or subgroups. It is time that many cricisms of marketing are prompted by misunderstanding and/or miss-application of the marketing concept. Usually, the mistaken marketing concept is inertly interpreted as “Give the customer what he wants which in many cases, is a sure road to ruin.
In reality, the marketing concept advice that we should establish users or buyers needs and determine if, how and to what extent it may be possible to satisfy these given ones existing and potential resources to the mutual bandit both parties to the exchange. Clearly, the real marketing concept requires the marketer to steer a careful course between, regarding every individual as a discurece marketing opportunity. From consumers and organizational buying behaviour, it is apparent that one can either disaggregate a population into separate groups ore sub-groups of population through the use of a variety of distinguishing distinctive features which must be passed by those within the group but the at same time, are absent from those excluded from it.
In marketing this process is known as “Marketing segmentation”. Marketing segmentation could also be a process of dividing a total market into groups consisting of people who have relatively similar product made. The purpose is to design a marketing mix (es) that more precisely match (es) the needs of individuals in a selected segment (s).
A market segment on the other hand is a group of individuals, groups or organization who share one or more similar characteristics that cause them to have relatively product needs. Beyond identifying segments in the market, management must carefully consider both the strengths and the weaknesses of competitors when developing marketing strategy. This is to aid the product-positioning task. In essence, product positioning extends market segmentation by defending the market target that management intends the firm to penetrate. It establishes the segment at which the firm intends to focus its marketing efforts. This is the segment(s) where the firm is most likely to have a competitive advantages.
The concepts involving segmentation and position are perhaps best explained through an illustration. The example used is a classic. The results of the research were dramatic because they reshaped the bear industry through the introduction of a light-type of product. By focusing on segment needs and competitor positions, selected textbook publishing companies in Owerri, was able to turn the once. Financially troubled company into a leading contender in the overall industry. Market segmentation and product positioning can enable a firm to select a target fro which it has a competitive advantage, so that a lasting market position, one of solid market strength can be established.
Marketing perform two basic tasks in meeting the exchange objectives. First, the identify potential markets are select certain target markets to serve, them they design and implement marketing strategies to meet those target market objectives. Marketing strategies or action plan for accomplishing objectives, then are thought in terms of particular markets. In the segmentation of textbooks as a product, it should be noted that the consumers of textbooks buy with different categories of buyers of textbooks according to the use, need and status of these buyers based on this the concept of segmentation in the publishing firms are based upon the position that:
i) Consumers are different.
ii) Differences in consumers are related to differences in the market demand and buying motives.
iii) Segmentation of consumers can be possible because segments of consumers can be isolated within the overall market.
iv) Market target segments are sufficiently stable to allow adequate lead time for the design and implementation of a marketing strategy and
v) At least, one segment has sufficient demand potential to justify selection as a market target.
The benefits of market segmentation and positioning are numerous and include that, the management is better able to access competitive strength and weakness of greatest importance. This will same company resources by foregoing a pitched battle for competition when there is little real hope of market gain.
1.2 STATEMENT OF PROBLEM
Generally, a great number of problems confront the application of market segmentation and positioning. To describe market segmentation does not seem different but to put the description into practice is not easy. Some of the problems however are particular about market segmentation and positioning in textbook publishing firms. Some of these problems are stated in the work with the purpose of finding solution to them.
1) The inability of the firm to classify their customers group according to the uniqueness in purchases.
2) The segmentation and positioning is based on subject rather than based on customers/consumers and their needs.
3) Inadequate transportation facilities for sales men whom their jobs require traveling from one place or customer to another.
4) Inadequate sales training and education. There is simply not enough training for old and new employed salesmen hence; they lack knowledge and concept of market segmentation.
5) Inability to carryout marketing survey and research. There is no provision to know how effective their strategy is and how customers responded to their.
6) Offerings. The inability to carry out market research to know the extent of homogeneity and heterogeneity of their customers also pose problems to the organization.
1.3 PURPOSE OF THE STUDY
Like the marketing philosophy pointed out, every marketing oriented firm or organization has the primary duty of not only making sales for the company but for the identification of customers need and planning to satisfy these customers needs at a profit to the firm. For the purpose of this work, it is therefore very important to review the strategy and offerings of organization with a view to finding how effective such strategy and offering are meeting the objectives of the organization that is applying them. It is the light of this that this work outlines the following:
i) To know what market segmentation and positioning is all about as it involves the companies under study.
ii) To know if actually the companies or organization actually applies market segmentation and positioning in the sales of its product.
iii) Also, 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.
iv) The other objective of this study is also to know the method or strategy the companies actually uses in performing its functions.
v) Also, the effectiveness of market segmentational and positioning strategies is achieving the firm’s goals as well as host of to others.
1.4 SCOPE OF THE STUDY
The study covers all aspects of market segmentation and positioning as an instrument for achieving organizational objectives as a whole. The population of this study is all publishing firms in the country. However, due to time and financial constraints, a survey of selected firms in Owerri will be conducted. Therefore, the study sample has been narrowed to seven publishing firms in Owerri, which the researcher believes is representative of the entire population.
1.5 RESEARCH QUESTIONS
For the purpose of this study, the following questions will be asked:-
1) What categories of customer do the firm sells to?
2) How do the firms structure its sales force?
3) How do the firms distribute its products?
4) Do firms use market segmentation and positioning in achieving its sales objective?
1.6 STATEMENT OF THE HYPOTHESES
For the purpose of this work, the following research hypothesis are formulated and need adequate attention hence, they will be subject to test of reliability and authority.
Hypothesis I
Ho: The firm does not use market segmentation and positioning to achieve greater part of her objectives.
Hi: The firm uses market segmentation and positioning to achieve greater part of her objectives.
Hypothesis II
Ho: The firm marketing operation are not regionally structured.
Hi: The firm marketing operation are regionally structured.
1.7 SIGNIFICANCE OF THE STUDY
The study on the segmentation of market and positioning is very significant because many companies and organizations have had some problems to perform more profitable because of the lack of ideas to segmentation of market and positioning. This work would provide marketing/sales managers of companies and organizations in the state and the country at large, with the useful tools for designing and accessing the efficacy of their market segmentation programmes.
This study is very significant and justifiable in that market segmentation and positioning and identification target markets by organization are part of the tools for the realization turnover ratio of organizations as well as development sales. Finally, this research in this direction thereby lagging foundation for other researchers.
1.8 DEFINITIONS OF TERMS
MARKET:- It can be defined as a geographical location where buyers and sellers transact business. It can also be seen as an aggregate demand by potential buyers of product or services. Market can also been seen as people with needs to satisfy, the money to spend and the willingness to spend it whenever it becomes necessary to do so.
MARKET SEGMENTATION:- This is the process of dividing the heterogonous market into smaller division having relatively homogenous characteristics that can be satisfied by the firms.
POSITIONING:- This is the act of establishing a viable competitive positioning of the firm and its offerings on the selected target market.
MARKET TARGET:- It is the process of selecting a segment of the total market and going after it with the company’s product or closing a selected of the market with which to deal with in relation to the firm offerings.
MARKET CONCEPT:- This is the philosophy of business which state that, the customers want for satisfaction is the economic and social justification for a firm’s existence.
