THE IMPACT OF
MARKET SEGMENTATION AND PRODUCT POSITIONING IN A SERVICE INDUSTRY
(A case study of MTN, Ahmadu Bello Way
Kaduna)
ABSTRACT
This project work titled
“The Impact of Market Segmentation and Product Positioning In Service Industry”
with reference to MTN Ahmadu Bello way Kaduna. Contains five chapters. It a
body of knowledge in the field of business, that marketing concept which are
applied in the manufacturing industry are applicable in the organisation. The
focus of this project is base on the introduction of the subject matter,
background of the subject matter, statement of the problem and the research of
the objective for the study was also made. However, the research scope,
significance of the study, including the limitation were highlighted and
clarified, also definition of terms used during the study were stated.
Literature reviews were carried out, also questionnaire were administered to
collected data from the management and staffs of the MTN and a simple
percentage was used to analyze the collected data for easy understanding.
Research population and sample size, a sample size of 12 were taken from the
population of 24 of only the management and staff of the MTN. The discussion of
the result have been carried out. The study conclusively discovered that
segmentation and product positioning is a vital tool for any business, it is
recommended that MTN should continue to segment, this is because, the net
effect will be sustainable profitability.
TABLE
OF CONTENT
Title page- – – – – – – – – – i
Declaration – – – – – – – – – ii
Approval pages – – – – – – – – iii
Dedication – – – – – – – – – iv
Acknowledgement- – – – – – – – v
Abstraction- – – – – – – – – vi
Table of content – – – – – – – – vii
CHAPTER ONE
1.0 Introduction – – – – – – – 1
1.1
Background of the study – – – – – 2
1.2
Statement of the problem – – – – – 4
1.3
Objective of the Study – – – – – – 5
1.4
Significance of the Study – – – – – 6
1.5
Research Question – – – – – – 6
1.6
Scope of the Study – – – – – – 7
1.7
Limitation of the Study – – – – – – 7
1.8
Definition of the terms – – – – – – 9
CHAPTER TWO
Literature Review
2.0
Introduction- – – – – – – – 9
2.1
Marketing segmentation- – – – – – 9
2.2
Historical
perspective/background of Peterson Zochonia 11
2.3
Importance of marketing
segmentation – – – 13
2.4
Condition for effective
segmentation – – – 13
2.5
Basis for marketing
segmentation – – – – 15
2.6
Target market – – – – – – – 21
2.7
Differentiated marketing – – – – – 23
2.8
Validity and viability of
market segmentation – – 24
2.9
Segmentation and target – – – – – 27
2.10 Segmentation
and profitability – – – – 28
2.11 Market
segment and company asset – – – 30
2.12 Benefit
of segmentation – – – – – 30
CHAPTER THREE
3.0
Introduction – – – – – – – 33
3.1
Area of study – – – – – – – 33
3.2
Research design – – – – – – – 33
3.3
Population of study- – – – – – – 34
3.4
Sample size and sampling
techniques- – – – 34
3.5
Instruments for data
collection – – – – 34
3.6
Administration of the
instrument – – – – 35
3.7
Method of data analysis and
presentation – – – 35
CHAPTER FOUR
Data Presentation and Analysis
4.0 Introduction – – – – – – – 36
4.1
Presentation and analysis
of management questionnaire 36
4.2
Presentation and analysis
of customer and distribution
questionnaire – – – – – – –
45
4.3
Discussion of the Result – – – – – 49
4.4
Proof of Hypothesis – – – – – – 51
CHAPTER FIVE
Summary,
Conclusions and Recommendations
5.0 Introduction – – – – – – – 54
5.1
Summary – – – – – – – – 54
5.2
Conclusion – – – – – – – – 54
5.3
Recommendations – – – – – – 55
Bibliography – – – – – – – 56
Appendix – – – – – – – – 57
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.