CHAPTER ONE

INTRODUCTION

1.0     BACKGROUND TO THE STUDY

The impact and effect of market segmentation with the view of globalization throughout the world 'be it developed or developing economy, the supremacy being. accord the free market system cannot be over emphasized, that is achieving economic efficiency which ultimately leads to economic growth is free competitive market system otherwise refers to as the capitalist system.

Market segmentation is one of the steps into defining and target specific markets. It is the process of dividing a market into a distinct groups of buyers that require different products or marketing mixes.

A key factors to success in today's market place is finding subtle differences to give a business the marketing edge.

Businesses that target specialty markets will promotes its products and services more effectively than a business aiming at the "average" customer.

Segmentation is so important that Kotler (2004) described the heart of modern strategic marketing as segmenting, targeting and positioning (STP). Since no marketer can satisfactorily satisfy the whole market or industry, it is therefore imperative that the market is segmented. Segmentation is also precipitated by the fact that the market is heterogeneous­ made up of different consumers with different needs and wants.

He also viewed market segmentation as an act of identifying d profiling distinct groups of buyers who might require different products and/or marketing mix.

Opportunities in marketing increase when segmented groups of clients and customers with varying needs and wants are recognized.

Market can be segmented or targeted using a variety of factors. The bases for segmenting consumers markets include:

·       Demographical bases (age, family size, life cycle)

·       Geographical bases (state, regions, countries)

·       Behavior bases (product knowledge, usage attitudes,

·       response)

·       Psycho graphical bases (life style, values, personality)

Today, it could be generally agreed that almost all the manufacturing industries especially breweries, practice market segmentation due to tremendous benefit derived from it.

1.1     STATEMENT OF THE PROBLEM

Today, it has been noted that many organizations in our country are declining for the fact that, Nigerian business environment is unstable, couple with price fluctuations in the business cycle as a result of market homogeneity and this necessitated the concept of market segmentation. This can be simplified through the following points.

a)    Problems arising out of price fluctuations, low market and even closure of some firms.

b)    Monotony in production arouse from manufacturer engaging in the mass production and mass distribution of single brand of product which do not enhance profit maximization.

c)    Poor visionary management team or marketing personnel failure to identify the segmentation variables. For example how to identify customers want, standard and acceptable quality. (Market variations).

d)    Failure to identify marketing mix (price, product, promotion and place) and targeting market.

e)    Inconsistency in production output and decline in product delivery.

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