IMPACT OF MARKET SEGMENTATION ON THE

SALES OF A COMPANY’S PRODUCT: A STUDY

OF FLOUR MILLS OF NIGERIA PLC, LAGOS

MAHMUD MUHAMMED I.K.

MAT. NO: SBS/2122060049

Being a Project Submitted to the Department of

Marketing, School of Business Studies, Auchi
Polytechnic, Auchi in Partial Fulfillment of the
Requirements for the Award of Higher National
Diploma (HND) in Marketing.

DECEMBER, 2022

i
 CERTIFICATION

We certify that this project titled “Impact of Market

Segmentation on the Sales of a Company’s Product: A Study of Flour

Mills of Nigeria Plc, Lagos” was carried out by MAHMUD MUHAMMED

I.K, with Matric No. SBS/2122060049 under our supervision.

We also certify that the work is adequate both in contents and

quality, and is submitted to the Department of Marketing in partial

fulfillment of the requirements for the awards of Higher National

Diploma (HND) in Marketing.

__________________ _______________
Dr. I. A. Obomeghie Mr. A. K. Osenin
(Project Supervisor) (HOD, Marketing)

__________________ _______________
Date Date

ii
 DEDICATION

This project work is dedicated to Almighty Allah (GOD) for His

mercies and grace throughout my academic programme, and also to

my parents Mr. & Mrs. Ikharia Mahmud

iii
 ACKNOWLEDGEMENTS

I will like to use this medium to express my gratitude to Almighty

Allah on whose grace the writing of this project was made possible.

I also appreciate my project supervisor Dr. I. A. Obomeghie who

made necessary corrections and his encouragement towards the

success of this project, may Almighty Allah guide and protect you, I say

thank you sir.

I will also thank my HOD, Mr. A.K. Oseni on his encouragement

and support of the Department and to all the Lecturers in the

Department of Marketing, may Allah bless you all.

My sincere gratitude goes to my affectionate parent Mr. & Mrs.

Ikharia Mahmud for their moral and financial supports throughout my

academic pursuit, may Almighty Allah grant you long life and good

health.

My sincere gratitude goes to my beloved brothers and sisters for

their supports.

Not left out are my friends who in one way or the other

contribute to the success of my education I really love you all, may the

Almighty Allah bless you all.

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 TABLE OF CONTENTS
Page
Title page …… i
Certification ……
ii
Dedication …… iii
Acknowledgments ……
iv
Table of Contents ….. v
Abstract …… vii
CHAPTER ONE: INTRODUCTION
1.1 Background to the Study …………
1
1.2 Statement of Problem ………… 2
1.3 Objectives of the Study …………
2
1.4 Research Questions ………… 3
1.5 Statement of the Hypotheses …………
3
1.6 Scope of the Study ………… 3
1.7 Significance of the Study …………
4
1.8 Limitations of the Study …………
4
1.9 Operational Definition of Terms ………… 5

CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.1 Introduction …………
7
2.2 Conceptual Review …………
7

v
2.2.1 Market Segmentation ………… 7
2.2.2 Benefits of Market Segmentation …………
10
2.2.3 Significance of Market Segmentation …………
11
2.2.4 Criteria for Market Segmentation …………
13
2.2.5 Segmenting Consumer Market
………… 19
2.2.6 Segmenting Business Markets …………
21
2.2.7 Conditions for Effective Segmentation
………… 22
2.2.8 Framework for Conducting Market Segmentation …………
25
2.2.9 The impact of Market Segmentation on Business
Individual and the Society …………
27
2.3 Theoretical Review …………
31
2.5 Summary of the Review …………
32
CHAPTER THREE: METHODOLOGY
3.1 Introduction …………
34
3.2 Research Design ………… 34
3.3 Population of the Study ………… 34
3.4 Sample/ Sampling Techniques …………
34
3.5 Research Instrument ………… 34

vi
3.6 Method of Data Collection …………
35
3.7 Method of Data Analyses …………
36

CHAPTER FOUR: DATA PRESENTATION, ANALYSES

AND INTERPRETATIONS
4.1 Introduction …………
37
4.2 Data Presentation and Interpretation …………
37
4.3 Test of Hypotheses ………..
44
4.4 Discussion of Findings ………… 47

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND

RECOMMENDATIONS
5.1 Summary of Findings …………. 48
5.2 Conclusion ………… 48
5.3 Recommendations …………
48
Reference
Appendix

ABSTRACT

This study was conducted to examine the impact of market

segmentation on the sales of a company’s product, using Flour Mills of
Nigeria Plc, Lagos as the case study. The specific objectives of the

vii
study include: to determine the benefits derived from market
segmentation and to find out the problems associated with the
unsegmented market in the sales of products. The research design
used in this study was descriptive survey and the data gathered were
processed and analyzed using chi-square. Findings revealed that
effective market segmentation increases the sales of a firm’s products
and enhances the performance of Marketing Department of a business
organisation. It is one of the recommendations that market
segmentation should be continuously practiced since it reveals market
opportunities and enhances sales in an organisation.

viii
 CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

A market comprises of many customers with similar and different
needs, and these customers are not homogenous. Significant
differences exist on the benefits they seek in a product, the amount of
money they are able and willing to pay, the medium they use and the
quantities they buy. It therefore makes sense for marketers to
segment the market and target one or more of these segments with
specialized tailored offerings. In most markets, the need for segmented
offerings is obvious because a single product will not satisfy all the
customers. Etzel, et al (2004) believes that the essence of
segmentation is that members of each group are similar with respect
to the factors that influence demand.
The importance of market segmentation to an organisation
cannot be over emphasized because of the great effect it has on the
growth and performance of business organisations. Market consists the
buyers who are differ in many ways and who may therefore be
classified into submarkets or market segments on the basis of suitable
characteristics or variables. Assuming that such classification could be
meaningfully made the marketer then decides whether to:
a. Recognize the existence of the sub-market and design the
product features that can meet the unique need of one, some or
all of the identified segments.
b. Ignore the existence of sub-market and market one product offer
to the entire market.

1
 The term “market segmentation” is the act of dividing a market
into different groups of buyers who might require separate products
and or market mixes (Kotler, 2002). The purpose is design a marketing
mix that more precisely matches the needs of individual in selected
segment or segments. Base on this, this study tries to examine the
relevance problems of market segmentation.
1.2 Statement of the Problem
The concept objectives of most business organisations are
customers satisfaction and profit maximization. In many firms these
objectives have not been well realized because of wrong identification
of market to be served. The wrong identification of market to be
served has led to poor market segmentation, as a result, many
companies do not practice market segmentation, and they have not
been able to serve prospective target markets.
It was noticed that many organisations are not aware of the
importance of market segmentation. Why some firms believe that
market segmentation does not enhance sales in an organisation, while
hold that it is too expensive and time consuming.
Therefore, this study is conducted to investigate the impact of
market segmentation on the sales of a company’s product.
1.3 Objectives of the Study
The main purpose of this study is to examine the impact of
market segmentation on the sales of products in an organisation.
The specific objectives of the study are:
i. To examine if effective market segmentation increase the sales
volume of a company’s product.

2
ii. To investigate if market segmentation is too expensive and time
consuming.
1.4 Research Questions
i. Does effective market segmentation increase the sales volume
of a company’s product?
iii. Is market segmentation too expensive and time consuming?
1.5 Statement of the Hypotheses
The following hypotheses were formulated and tested to assist
this study:
Hypothesis I
Ho: Effective market segmentation does not increase the sales
volume of a company’s product.
Hypothesis II
Ho: Market segmentation is not expensive and time consuming.
1.6 Scope of the Study
This study is carried out on the impact of market segmentation
on the sale of an organisation. The study is limited to manufacturing
firms. In the light of this, the study is focused on the role and
importance of market segmentation, the condition for market
segmentation, conditions for effective market segmentation, theory of
market segmentation, and the impact of market segmentation.
It should be noted that this study is focused directly on Flour
Mills Nigeria Plc, Lagos.

1.7 Significance of the Study

The significance of this study to our Nigeria market situation
because it will provide an understanding of the basic influence on the

3
Nigeria consumer and provide insight into the uniqueness of each
market segment and the extent to which the will change the consumer
buying behaviour.
This study that is the place of market segmentation which an
organisation will be found useful to the marketing strategies that are
relevant to him.
The study is also relevant to the manufacturing companies and

production companies, it point out the fact that organisation in the

same industry has failed. With the help of segmentation, the need to

appreciate better market and how segmental market can serve a basis

for developing can be effective strategy through which success can be

achieved.

Conclusively, this study is essentially of significance to Flour Mills

Nigeria Plc, marketer of Golden Penny Pasta, Noodles, etc. It makes the

management of Flour Mills Nigeria Plc to know exactly those analytical

satisfactions, which want in their products.

1.8 Limitations of the Study

One of the constraints of this study was limited time t carry out a

wider study. Due to this factor, only one organisation was used as the

case study since it was not possible for the researcher to investigate

more than one organisation different States of Nigeria.

Alos, chi-square was the statistical tool used to test the

hypotheses. So, no other means was used.

4
 Despite the above limitations, the researcher still ensured that

this study meet the required standard.

1.9 Operational Definition of Terms

The following terms are defined to enhance proper
understanding in this study project.
Consumer: The ultimate consumer of a product is the ultimate users
of a product or services. Consumers are individuals and household
buying for personal consumption or use (Masoje, 2012)
Consumer Goods: These are products designed for use by the final
consumer or household buyer and in such a way that they can be used
without further processing (Michael, 2011).
Industrial Goods: They are products designed to be sold primary for
use in producing other goods or rendering services as contrasted with
goods (Stanton, 2012).
Product: According to Berkowitz and Walker J, Ezel (2011) a product
is a good services or idea consisting of that satisfy consumers and is
received in exchange for money or another unit of value.
Market: A market is the set of actual and potential buyers of a
product. The buyers’ share a particular need or want that can satisfy
through relation (Kotler & Keller, 2006).
Market Segmentation: This is the process of dividing the total
heterogeneous market for a product into several sub-marketing or
segment each of which tends to be homogeneous in all significant
aspect (Kotler, 2004).

5
Target Market: It is that part of the market segment which the firm
can serve conveniently (Adetayo, 2006).
Marketing: Kotler and Keller (2009) view marketing as societal
process by which individual and groups obtain what they need and
want through creating, offering and freely exchanging product and
services of values with others.
Product Differentiation: These involve developing and promoting
an awareness of difference between one company’s product and those
of competitors and it is also concerned with the bending of demand to
the will of supply (Kotler & Armstrong, 2010).
Brand: This is a name, term symbols or special design or some
combination of these elements that is intended to identify the goods or
services of one seller or a group of sellers, and to differentiate them
from that of their competitors (Boone & Kurtz, 2011).
Consumer Market: A consumer market consists of purchases and
individuals who intend to consume from the purchased products and
do not by products for making profit (Boone & Kurtz, 2011).
Positioning: It refers to the process of establishing the image or
identify of a brand or product so that consumer perceives it in a certain
way.

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 CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1 Introduction
This chapter deals with the review of literature related to this
study. The discussion covered the conceptual and theoretical
framework of market segmentation, segmentation of consumer and
business market, conditions for effective segmentation, the impact of
market segmentation on business, individual and the society, etc.
2.2 Conceptual Review
2.2.1 Market Segmentation
Market segmentation is the process of dividing a large and
heterogeneous market into relatively homogeneous segments that can
be reached with a distinct marketing mix. For example, an air craft firm
may segment its market into commercial, military and private
markets/consumers. Mobile phone users are divided into lowered,
middle-end and high-end users.
Market segmentation is an important basis of many successful
marketing strategies. Carefully chosen segments allow tailoring the
marketing mix to more individual customer needs. Thus, they help to
invest marketing spending more effectively. The segmentation of the
overall markets are the basis for determining any particular marketing
mix (Dagmar, 2015).
Market segmentation is necessary because in most cases, buyers
of a product or a service are no homogenous group. Actually, every
buyer has individual needs preferences, resources and behaviours.
Since it is virtually impossible to cater for every customer’s individual
characteristics, marketers group customers to market segments by

7
variables they have in common. These common characteristics allow
developing standardized marketing mix for all customers in the
segment (Dagmar, 2015).
Market segmentation is the segmentation of customer markets
into homogenous groups of customers, each of them reacting
differently to promotion, communication, pricing and other variables of
the marketing mix. Ideally, relevant differences between buyers within
each segment are as small as possible. Thus, every segment can be
addressed with an individually targeted marketing mix (Dagmar,
2015).
Market segmentation is a two steps process which are first,
naming broad product markets and secondly, segmenting these broad
product markets in order to select target market and develop suitable
marketing mixes. The first step in effective market segmentation is
naming a brand market of interest to the firm. It involves
desegregating all possible needs into some genetic marketed and
broad product markets in which the firm may be able to operate
profitably (Goetx, 1976).
Market segmentation is a strategy for selecting customers, for
differentiation customers’ needs and wants according to the way they
respond to marketing effort, for choosing among alternative market
opportunities and for tailoring marketing strategies to those distinctive
opportunities (Kotler, 2002).
Kotler (2002) defined market segmentation as the sub division of
market into distinct subset of customers, where any subset may
conceivably be selected as a target to be reached with a distinct
market wise with the intensive competition in the mass market,

8
individual, seller may prosper by developing offer for specific market
segments. Any markets segment isolated should be worth given
special attention, it is essential that a market that is already crowded
with competition throughout a research for his/her by putting into
consideration. The need of some ignored segment by other
competitors.

In market segmentation, we look into three areas, such as:

i. Competition
ii. Consumers
iii. Capabilities
i. Competition: In market segmentation, competition has a great
influence on firm product which the marketer needs to put into
consideration when segmenting a market. Competition is the outcome
of the presence of several products who have the same or similar
products (Stanton, 2002).
Shagginess (2006) posits that for the success of any business, a
business company must provide greatly customers value and
satisfaction than its competitors. Organisation should develop
strategies that will make them offer their products stronger than what
the competitor are offering to customers.
ii. Consumers: Consumers are key factors that a firm must look
into when involving in segmenting market. The division of market into
homogenous group of consumer as market segmentation that make it
possible for a firm to tailor the marketing mix for specific target
markets, thus, a better satisfying customer needs. A market should be
measurable, accessibility by communication and distribution channel,

9
different and its response to a market mix, substantial enough to be
profitable on industrial and consumer market (Belk, 1991).
iii. Capabilities: The company or firm should make sure that they
have the capability to change in order to meet the market needs,
when, segmenting the marketing. A market consist or segmentation
which can result in different group (Anderson & Belk, 1991).
These areas will help us to know how to go about segmenting the
market. Segmenting recognized sub-groups who already have certain
demands. Consumer model should come to mind when planning
market strategy. The consumer model according to Michael (1994) is
grouped into three types which include:
a. The model that assumed that they are different, and that no one
product will do.
b. The more rational model which assumes that there are differences
and similarities.
c. The model that assumes that all consumers are similar implying
that one product will satisfy everyone.
Here the general consumer group is divided into smaller segment with
similar needs and wants.
2.2.2 Benefits of Market Segmentation
According to Olayinka and Aminu (2006), market segmentation
provides the following benefits:
i. Market segmentation is a customer-oriented philosophy. It
emphasizes identification of customers’ needs within a sub-
market and satisfaction of these needs. The firm is therefore
better able to match customers’ needs.

10
ii. Enhanced Profits: Customers differ in their price sensitivities. By
segmenting the market, the market can change premium prices
and substantially enhance profits.
iii. Efficient use of Marketing Resources: This is made possible
through tailoring of marketing programmes to individual market
segments. A smaller firm with limited resources might compete
effectively in one or two market segment.
iv. Enhanced opportunities for Growth: Segmentation can build
sales. For instance, if the airlines had not segmented their
cabins, specialist airlines had not segmented their cabins,
specialist airlines and discount operators would have creamed off
the high-margin business travelers. Flour Mills has introduced its
products to attract customers who may find its popular flours
somewhat strong thereby edging competitors in the segment
into oblivion.
v. Retention of Customers: As an individual’s circumstances change
with, family circumstances and income, his or her buying
patterns change. By offering product appropriate to each stage
of the family life cycle, the marketer can retain customers who
would otherwise switch to competitive brands.
2.2.3 Significance of Market Segmentation
Kotler and Keller (2009) state that the following are the
significance of market segmentation:
1. Market segmentation facilities formation of marketing mix:
Market segmentation facilitates formation of marketing mix
which is more specific and useful for achieving marketing

11
 objectives. Segment wise approach is better and effective as
compare to integrate approached for the entire market.
2. Market segmentation facilitates introduction of suitable
marketing mix: Marketing segmentation enables a producer to
understand the needs of consumer, their behaviour and
expectations as information is collection segment wise in an
accurate manner. Such information is purposefully usable.
Decision regard four Ps bases on such information are always
effective and beneficial to consumer and the producers.
3. Facilitates introduction of effective product strategy: Due to
market segmentation product, development is compatible with
consumers need as there is effective crystallization of the specific
needs of the buyers in the target market. Market segmentation
facilitates the matching of product with consumers’ needs. This
gives satisfaction to consumers and higher sales and profit to the
marketing firms.
4. Facilitates the selective of promoting marketers: Marketer
segmentation facilitates the indemnification of those sub-markets
which can be served best with limited resources by the firm. A firm
can concentrate efforts on most productive/profitable segments of
the total market due to segmentation techniques: This market
segmentation facilitates the selection of the most suitable
markets.
5. Facilitates exploitation of better marketing opportunities: Market
segmentation helps to identify promising market opportunities. It
helps the marketing man to distinguish one customer group from
another within a giving market. This enables him to utilize the

12
 available marketing effectively as the exact target group is
identified at the initial stage only.
6. Facilitates selection of proper marketing programmes: Market
segmentation help the marketing man to develop his marketing
mix programmes on a reliable base on adequate information about
the needs of consumers in the target market is available, the
buyer are introduced to marketing programmes which is as per
their needs and expectations.
7. Provides proper direction to marketing efforts: Market
segmentation is rightly described as the strategy of dividing the
market in order to serve them better. Due to segmentation, a firm
can avoid the market which are unpredictable and irrelevant for its
marketing purpose and concentrate on certain promising segment
only.
8. Facilitates effective advertising: Advertising media can be more
effectively use because only the media that reach the segment
can be employed.
9. Product special benefits to small firms: Marketing segmentation
offer special benefits to small firms. The resources available with
them are limited as they are comparatively new in the market
such firms can select only suitable market segment and
concentrate all efforts within the segment only from better
marketing performance, such firms can compete even with large
firms by offering personal services to consumer within the
segment selected.
10. Facilitates optimum use of resources: Market segmentation
facilitates efficient use of available resources in the most efficient

13
 manner in the selected target market segment. The marketing
firms select the most promising market segment and concentrated
all attention on that segment only. This offers best result to the
firms in terms of scales, profit and consumer support as compared
to results available from spending such resources in the total
market.
2.2.4 Criteria for Market Segmentation
McDaniel (1999) has defined several criteria for a successful
segmentation which are supported by Kotler in his book on marketing
as well.
i. Typing the Segment
- Differentiation of segment from other (segment have to be
different enough to be logically divided).
- Measurability (Size and other characteristics of the
segment can be measured).
ii. Homogeneity
- Variation
- Stability (the segment are stable enough for a long run
segmentation).
iii. Usefulness
- Accessibility (the segment can be effectively reached and
served).
- Sustainability (segment can be effectively reached and
served).
iv. Strategic criteria
Potential (the segment has potential in future development and
profitability for the company).

14
 These are many other people that have made their input into the
development of the market segmentation concept and what the
researcher have being using now when doing market segment is the
outcome of their effort.
Business to business market segment: Business to business
market segmentation is an important asset for a company. It enables
the staff of manage operation more effectively and to desire result and
objectives. The degree to which segmentation is used in industrial
market can vary and it depends on the changing condition in its
environment. It also depends on the need of an organisation and types
of activities (Dagmar, 2001).
Industrial market segmentation is a decision making process that
gives a firm an opportunity to use its marketing resources correctly
and effect is vary in order to implement its marketing strategy and
overall objectives (Masoje, 2000).
Benefit of business to business market segmentation: There are
many benefits to business market segmentation for companies,
majority of benefit help in communicating correctly with the company
target sectors, help in communication product service and its value to
the customer, a competitive strategic position in a specific position in
an area of market help in planning for future growth and development
of the company. These benefits play a big role in companies’
management processes and improve communication with customer
and product positioning, selling as well as company planning
strategies.
Market segmentation Bases: According to Michael and Thomas
(2007), two major categories for business to business market

15
segmentation base are macro segmentation and macro segmentation
concentrates on the characteristics of an organisation and its situation
such as size, geographical location, operating market, industry, etc. In
other word, micro segmentation requires a lot more of detailed
information and observation about companies, such as buying decision
criteria, the importance of buying and attitude within each macro
segmentation defined.
Kotler and Keller (2009) on the other hand have their business
market even though it is petty close to what is mentioned above, it
first introduce a slightly different way of thinking Kotler and Keller
major segmentation unavailable are demography (industry, company,
size, location); operating variable (technology, user or non-user, status,
customer capabilities), purchasing approaches (power structure,
nature of existing relationship, general purchase policies, purchasing
criteria); situational factor (urgency, specific appreciation, size of
order); personal characteristics (buyer-seller similarity, attitude
towards risk, loyalty).
Macro segmentation is a common choice of companies when
doing market segmentation. Combining together the view of Kotler,
Speh and Hutt, the characteristics of an organisation can be described
by such variable.
a. Geographical Location: Geographical include such variable as
location, macro economical factors, customer concentration, etc.
it can be described by countries, states, town or own continent.
b. Organisation Size: The size of organisation can be measure by
few factors, the amount of employees to revenues. In different
economic and different market, there are different definition for

16
 small to big companies, depending on the wealth of the
economy, size of country and size of market, the amount of
employee demonstrate how complicate the operation of a
company are and how staff is required to complete all tasks,
therefore it measures the size of a company. However, the
revenue factor is more precise due to demonstrating the actual
tangible result of the company’s action. Company size is an
important variable to consider during segmentation. It shows the
level of possible consumption from a company, the bigger the
company is, the higher the rate of company investment and
consumption. It is obvious that big companies think quite often
differently from small companies, they are more experienced
and their need might be slightly different.
c. Characteristics Relevant to the Organisation: In case a
company found some other factor relates to the descriptive
characteristics of its market. It can use those factors for the
segmentation process. It can totally depend on the type of
business service and partnership history and other factor. Every
company is a unique organisation and might have specific
characteristics of its operation. An organisation can be interested
for example in the age of its customer (companies) or their
cultural background, etc.
d. Industry Classification: Industry segmentation is the first one
to do when dividing market into groups. Moreover, it is one of the
most complicated sub-ordinates, and new ones appear with time
and high technologies. One of the complications related to
industry segmentation is combined operating in many industries

17
 at the same time. Nowadays, it is quite normal to operate in
several industries and be successful in them.
e. User/Non-User Status: It is important for a company to know
who it is achiever users are interested in its services and who are
not. That will give useful insight on who was reached and who
was not; most of the companies keep track of their past activities
and past result, that is where information on segmentation upon
user/non-user can receive from. Segmentation bases for
industrial market fined by Akrani (2011) which basically cover
the one mentioned above are as follows:
i. Lalifo: Industry type, size of company (small, medium
large, base on revenue or amount of employee);
geographical location, technological base user status (non-
user, light user, moderate user, heavy user).
ii. What: End use application, volume used, price paid,
production satisfaction.
iii. Why: Production policy, buyer/seller relationship, buyer
personality, benefit sought.
f. Archetypes of Industries Market Segmentation: Market
segmentation in organisation can be classified by such variable as the
type of an organisation and customer driven approach or
organisational integration and by segmentation archetypes. Customer
driven approach or organisational integration and it demonstrate the
level of interest in customer, in the company and how important they
are. Organisational integration on the other hand is defined as that
extent to which district and interdependent organisational components
constitute a unified while unit sales based segmentation is the basic,

18
where the segmentation of the market is sales area, which do not
necessary relate directly the group of specific customer needs or
classification. This type of segmentation is driven by the sales
operation of an organisation. Structural segmentation stands for such
type of segmentation where the level of concentration on segment
divided by group of consumer is relatively small segment is mostly
defined by area of sale/operation. This type of segmentation is deeply
connected the structure of an organisation as a whole.
g. Bolt on Segmentation: The third type of segmentation, bolt of
segmentation, present such as a way of segmenting where high
attention is paid to customer, focus and characteristics for this,
the organisation uses data about customer, which is available
within the organisation and from external sources, size, location,
type, etc. The process is driven by information for customer
database, which every company has. This type of segmentation
guideline the promotion of existing product and targeting
advertising campaign in order to sell existing product; but it does
not support the development of new product or strategy in
general.
h. Strategies Segmentation: Finally, the fourth stage of all
segmentation types mention above when applying this type of
segmentation and organisation able to use their customer data for
developing a set of market segment. It sets segment across the
current product and services, so that organisation is able not only to
promote the existing offer but also to develop strategic decision
marketing, new product and services, so that organisation is able not
only to promote the existing offer but also to develop strategic decision

19
marketing, new product and market strategy it provides a general
headline/focuses for the entire operation of an organisation. The
segments are also closely connected to organisation operation and
activities, which are then connected to the needs of selected segment.
2.2.5 Segmenting Consumer Market
Dividing the total market into consumer and business segments
is a worthwhile start towards useful segmentation, but it still leaves too
broad and heterogeneous a grouping for most products. Wind (1978)
comments that, over the years, almost all variables have been used as
bases for market segmentation. Some of these variables constitute
bases for segmenting consumer market.
Bases for Segmenting Consumer Markets
The four major segmentation variables in consumer markets
include:
Geographic Segmentation: This is one of the earliest and still most
commonly used methods of segmentation. It involves dividing markets
into different geographical unites such as countries, regions, states,
cities or neighbourhoods. Few or all of these are chosen by the
markers as areas of operation. For instance, Japanese automobile
marketers produce different versions of auto for American and
European markets. “American spec” is different from “European spec”.
Nokia is currently designing rugged and easy to navigate mobile
phones for illiterate populations in rural India, working closely within
the peculiarities of these rural communities.
Demographic Segmentation: The second major method of
segmentation, and probably the one most frequently used, rests on the
assumption that markets can be subdivided into groups on the basis of

20
one or more demographic variables such as age, sex, income,
education, occupation, religion, race and so on. Examined below are
ways some of these demographic variables can be used to segment
markets.
Age: Consumer needs vary with age. For example, West African Milk
Company in addition to its premium powder and evaporated milk
recently developed a more nutritional product branded 1-2-3- for
babies between the age of 4 and 6 years.
Sex: Many products like clothes, shoes, writs watches, jewelries, wine
and coffee are either targeted at men or woman. For instance, salons
break their market into barbing salon and hair dressing salon.
Income: Income segmentation is a longstanding practice in such
product and service categories as automobiles, boats, clothing
cosmetics, travels, airlines and alcohol. Many airlines, for examples
break down the market into economy, business and first-class.
Psychographic segmentation: Buyers are divided into different
groups on the basis of lifestyle or personality and values. This is
necessary because people within the same demographic group may
exhibit different life-styles and value.
Lifestyle: The types of goods and services bought by consumers
express their life styles. Night crawlers patronize night clubs, people
who seek adventure buy tourism and sports lovers attend sport events.
Personality: Marketers endorse their products with brand
personalities that correspond to consumer personalities. For instance,
MTN has used high style personalities as people who achieve what
they want to achieve. Sunny Ade, the popular Nigerian musician has
been used to endorse Glo mobile Premium.

21
Value: Some marketers segment by core values, the belief systems
that underlie consumer attitudes and behaviours. For instance, Coca
Cola promotes sharing value among families with its 1 litre Coke.
Behavioural Segmentation: Buyers are divided into groups on the
basis of their knowledge of, attitude to and usage of product. variables
under consideration include: occasions, beliefs, user-status, usage
rate, loyalty status and so on. Some of these are discussed below:
Occasion: Buyers can be isolated on the basis of the occasion they
develop a need, purchase a product or use a product. Attendance
at cinemas theatres, musical shows and other events in Nigeria,
for example, usually takes place on Sundays, public holidays or
festive periods.
Benefits: Buyers can be segmented according to the benefits they
seek. Glomobile the high flying Nigerian GSM provider touts itself
as the pioneer of pay-by-the second billing system. Also, buyers of
toothpaste seek any of these benefits economy, oral hygiene peer
acceptance and taste as benefits.
User Status: Markets can be segmented into non-users, ex-users,
potential users, first-time users and regular users of a product.
Blood banks, for example, must not rely only on regular donors to
supply blood. They must result new first time donours and contact
ex-donors.
Usage Rate: Market can be segmented into light, medium, and
heavy product users. Bournvita has three sizes, Big, medium and
small sizes, with big size targeted at heavy users.
2.2.6 Segmenting Business Markets

22
 Although most of the work in recent years on segmentation has
been applied to consumer markets, segmentation is becoming more
and more important in the industrial market too. The following
segmentation variables are used for business markets.
Demographic Variables: Classification by industry, by type and size
of customer and by location. For instance, Funman Juice is sold to
Hotels (Sheraton Hotels and Towers, Transcorp Hilton Abuja) and
Airlines (Chan Changi Airlines).
Operating Variables: Segmenting by principal form of technology
which the customers use, user status (high, medium, lower, user),
customer capabilities (broad or narrow range of needs).
Purchasing Approaches: Classifying markets by buying critical
(quality service or price), buying policies (purchase, lease, lowest bid),
current relationship (new or existing customers).
Situational Factors: Urgency (speed of delivery), size of order (large
or small), applications (general or specific).
Personal characteristics: Loyalty, attitude to risk, organisational
culture and status of the buyer in the organisation can be used as
variables to segment markets.
Cardoso identifies four dimensions which can be used either separately
or collectively to classify organisational buying situations:
1. Familiarity with the buying task and in particular whether it is new
task, modified rebuy or straight rebuy.
2. The type of product and the degree of standardization.
3. The significance of the purchase to the buying organisation.
4. The level of uncertainty in the purchase situation.
2.2.7 Conditions for Effective Segmentation

23
 To be effective according to Maina (2015) market segments must
be:
i. Measurable: The size, purchasing power, attitude and
characteristics of the segments can be measured.
ii. Substantial: The segments are large and profitable enough to
serve.
iii. Accessible: The segments can be effectively reached and served
with a distinct market mix.
iv. Differentiable: The segments are conceptually distinguishable and
respond differently to different marketing mix elements and
programmes.
v. Actionable: Effective marketing programmes can be formulated to
attract and serve the segments.
Diversity in Marketing Segmentation
Consumer diversity is growing quickly and organisations have
prolonged how to make a distinction between their products and
services and that of the competition. This is where marketing
segmentation plays a key role. The United States will undergo a major
transportation in its cultural and ethnic composition over the next 20
years. Economic factors will be cause of these charges. Today’s
shrinking labour market is mostly comprised of low to middle class
citizens. This creates a slower responding consumer market than if it
was made up of upper class workers. However, the organisation that is
willing to begin segmenting and targeting the right products and
services to match all of today’s diverse cultures will create a
competitive edge over their competitors.
Consumer Market Segmentations

24
 Consumer market segmentations include:
 Geographical
 Demographical
 Behavour
 Psychographical
Geographical Segmentation for Consumers
The geographical segmentation signifies a market divided by
location. Geographical segmentation is based on the belief that
consumers who live in the same region share some related wants and
needs and those wants and needs could be very different from the
consumers who are living in other regions of the world. For example,
some products and services have high demand in one region but not
demanded in other regions. Despite its meaning, geographical
segmentation may differ from area to area. Geographical bases may
depend on the different brands available. In a number of areas, one
brand may be very well liked and accepted but it may not be known by
a majority of the consumers.
Demographical Segmentation
Demographical segmentation consists of demographic factors
such as age, ethnicity, nationality, occupation, etc. Therefore, with
these variables in mind, an organisation dealing with the younger
generation will have to target the consumers between the ages of 18
and 45 years, while an organisation dealing with older generation will
have to concentrate on consumers between 46 and up. Demographic
segmentation aids an organisation in understanding its and satisfying
their wants and needs. In today’s global market, competition is driven

25
by a strong competition causing demographic marketing analysis to be
great advantage to any organisation.
Behaviour Segmentation
A variety of strategies for segmentation is available. However,
previous studies show recommendations that behaviour based
strategies work well for most organisations. Segmentation based on
consumer behaviour variable normally included a sub-segment of
consumer segmentation. Organisation often collect this data to see
that the segment that best fits their consumer behaviour. Behavioural
segmentation can be the answer for a great deal of organisation on
where to lavish their next marketing dollar.

Psychographic Segmentation
Psychographic segmentation was developed by marketing
researchers to correlate personality with brands. Psychographics is
classified as the “study of personality, values, attitudes, interests and
lifestyle”. Organisations need to know their own consumers habits to
effectively connect with them and for the consumer to identify the
organisation’s products or services. Psychographic segmentation acts
on the psychology of the prospective consumer and helps the
merchant decide how he or she must manage their consumer that
belongs to specific segment.
Business Segmentation
Business segmentation includes:
Geographical segmentation
Customer type
Buyer behaviour

26
Geographical Segmentation for Business
Geographical segmentation is a marketing tactic in which
prospective consumers are divided on the basis of geographical units,
such as cities, states, countries, etc. The critical intent of any
organisation is to make a profit. To accomplish this goal, an ideal
marketing tactics is necessary. Marketing is a broad concept which
entails various actions, like studying the buyer’s behaviour, needs and
personal preferences. Promoting and selling any product and services
using a variety of techniques is exceptionally important. It is also vital
that markets recognize the diversity of each consumer and identifies
their needs by the different segment of markets.
2.2.8 Framework for Conducting Market Segmentation
From market segmentation to marketing planning, Literature
suggests the following steps from market segmentation to marketing
planning.

Fig. 1: Steps from market segmentation to market planning

Market Segmentation Positioning

1.Identification of customers’ 5.Identification of differential advantages in each segment.
needs and market segments.
6.Development and selection of positioning concepts.
2.Develop profiles of resulting
market segments.

Identification of target Market Marketing Planning

3.Evaluation of attractively of each segment..
7.Development of a marketing mix for each segment accord
4.Selection of target segments .

27
Source: Maina, S. (2015). The impact of market segmentation on the sales
volume of a company’s product or service. European Journal of Business
and Management, 7(1), 35-41.

Criteria for Market Segmentation

There are a huge number of variables that could be used for
market segmentation in theory. They comprise easy to determine
demographic factors as well as variables on user behaviour or
customer preferences. In addition, there are difference between
private customers and business. The following shows the best known
example but is not exhaustive:
i. Customer Markets:
Geographic-
- Land or region
- Rural or metropolitan
Demographic-
- Age, Sex, Marital Status
- Income, Occupation, Education
- Religion, Nationality, Ethnical group
Psychographic-
- Social status
- Lifestyle type
- Personal type
Behaviour-
- Intensity of product use
- Brand loyalty
- User behaviours
- Price sensitivity
- Technology adoption (according to diffusion of innovation
theory)
ii. Industrial Markets/B2B Markets:

28
 - Industry
- Intermediary or final consumer
- Type of corporation (public or private sector)
- Size of corporation
- Geographical location
- Intensity of product use
- Organisation of purchasing function
- Centralized or decentralized
- Purchasing policies, rules and criteria.
2.2.9 The impact of Market Segmentation on Business
Individual and the Society
As already stated, segmentation is the basis for developing
targeted market and effective marketing plans. Furthermore, analysis
of market segments enables about intensity of marketing activities in
particular segments. A segment oriented marketing approach
generally offers a range of advantage for both businesses and
consumers.
i. Better service customers’ needs and wants: It is possible to
satisfy a variety of customers’ needs with a limited product range by
using different forms, bundles, incentives and promotional activities.
The pricing models of many web based services are a good example.
They often includes a free plan to attract undecided first time
customers (reducing uncertainty and concerns, initiation customer lock
in). In addition, there normally is a moderately priced plan for light
users like individuals and small businesses as well as a more expensive
plan for heavy users. The paid plans include more features and
functions as well as higher service levels. The underlying product or

29
service is basically one and the same. It is only slightly adjusted to
meet the needs of different market segments.
ii. Up-selling across the customer journey: The above example of
well-based services with different pricing plans illustrates that market
segments enables business to target customers according to their life
cycle phase. As users get used to the services and grow their business,
they can easily change to the next higher plan or to supplementary
services. The service bundle evolves across the customer journey.
Thus, segment specific product bundles increase chances for up selling
and cross selling.
iii. Absorption of purchasing power by price differentiation: It is
often difficult to increase prices for the whole market. Nevertheless, it
is possible to develop premium segments in which customers accept a
higher price level. Such segments could be distinguished from the
mass market by features like additional services, exclusive points of
sale, product variations and the like. A typical segment based price
variation is by region. The generally higher price level in big cities is
evidence for this. When differentiating prices by segments,
organisations have to take care that there is no chance for
cannibalization between high priced products with high margins and
budget offers in different segments. This risk is the higher; the less
distinguished the segments are the theoretical concept behind this
price differentiation is price elasticity. In mass markets, business often
competes mainly on price. This is because the products are
comparable and may have a high level of price elasticity. A thorough
knowledge about customer’s preference enables businesses to develop
more distinguishable offers for particular market segments. Demand

30
for differentiated products that offer a particular and perceivable value
to customers often has a lower level of price elasticity. Hence, such
products can sustain a higher price level and higher margins.
iv. Attract additional customer groups: Targeted marketing plans for
particular segments allow to individually approach customer groups
that otherwise would look out for specialized niche players. By
segmenting markets, organisations can create their own niche
products and this attracts additional customer groups. Moreover, a
segmentation strategy that is based on customer loyalty offers the
chance to attract new customers with starter products and to move
these customers on the premium products and to move these
customers on to premium products.
v. Sustainable customer relationship in all phases of customer life
cycle: Customers change their preferences and patterns of behaviour
over time organisations that serve different segments along a
customer’s life cycle can guide their customers from stage to stage by
always offering them a special solution for their particular needs. For
example, many car manufacturers offer a product range that caters for
the needs of all phases of a customer life cycle first car for early
twenties, fun-car for young professionals, family car for young families,
etc. skin care cosmetics brands often offer special series for babies,
teens, normal skin, and elder skin.
vi. Targeted Communication: It is necessary to communicate in a
segment specific ways even if product features and brand identify are
identical in all market segments. Such a targeted communications
allows highlighting those criteria that are most relevant for each
particular segment (e.g. price vs. reliability vs. prestige).

31
vii. Stimulating Innovation: An undifferentiated marketing strategy
that target at all customers in the total market necessarily reduces
customers’ preference to the smallest common basis. Segmentations
provide information about smaller unites in the total market that share
particular needs [bett tweet = “An undifferentiated marketing reduces
customer’s preferences to the smallest common basis”] only the
identification of these needs enables a planned development of new or
improved products that better meet the wishes of these customer
groups. If a product meets and exceeds a customer’s expectations by
adding superior value, the customers normally is willing to pay a
higher price for that product. Thus, profit margins and profitability of
the innovating organisations increase. In addition, businesses may pay
particular attention to the customer segments of innovators and early
adapters (according to diffusion of innovation theory). By carefully
analyzing these customer groups they can plan valuable insights about
new trends that provide direction to their innovation activities.
viii. Higher Market Shares: The above points have already highlighted
that market segmentation is an ideas basis for pursuing additional
growth opportunities. This translates in higher market shares in many
cases. In contrast to an undifferentiated marketing strategy,
segmentation supports the development of niche strategies. Thus,
marketing activities can be targeted at highly attractive market
segments in the beginning. Market leadership is selected segments
improves the competitive position of the whole organisation in its
relationship with suppliers, channel partners and customers. It
strengthens the brand and ensures profitability. On that basis,
organisations have better chances to increase their market shares in
the overall market.

32
2.3 Theoretical Review
Market Segmentation Theory
The market segmentation theory is the assumption that both
short-term and long-term interest rates have no correlation
whatsoever. Addition, the theory states that the interest rates for each
different maturity segment vary (Jason, 2021). Note that this depends
on demand and supply as well as demand and risk related to security.
How does Market Segmentation Theory Work?
According to this theory, behaviours are analyzed separately.
This, therefore, means that a change in one behaviour does not in any
way cause the other to change. Basically, market segmentation theory
assumes that each of the bond maturities market segment is mainly
made of investors, who in this case, prefer to invest in securities that
have specific durations such as short-term, long-term or intermediate.
In addition, the theory asserts that buyers and sellers who make up
short-term securities market have distinct features and motivations
compared to buyers and sellers of long-term as well as intermediate
maturity securities.
The theory partly applies to various types of institutional
investors and their investment behaviours. Such institutions include
insurance and banking institutions. Note that when it comes to
securities, banks prefer investing in short-term securities while
insurance institutions prefer to invest in securities that are long-term.
Generally, when it comes to investing in fixed-income securities, this
theory holds that there is a preference for particular yields among
borrowers and investors. It is this preference that causes the smaller
markets each to have supply and demand that is unique to each other.

33
Since each yield is as a result of factors related to demand and supply
depending on each maturity length, it makes bonds with different
maturities not be interchangeable.
History behind Market Segmentation Theory
Market segmentation theory was first introduced in 1957 by John
Mathew Culbertson an American economists. Culbertson wrote the
paper known as, “The Term Structure of Interest Rates”, where he
disagreed with Irving Fishers term structures model-driven
expectations, which prompted him to come up with his own theory to
explain how the market sets a price on fixed income securities.
2.4 Summary of the Review
Market segmentation is the process of dividing a large and
heterogeneous market into relatively homogeneous segments that can
be reached with a distinct marketing mix.
Market segmentation is necessary because in most cases, buyers
of a product are inhomogeneous group. Every buyer has individual
needs, preferences, resources and behaviours. Since it is virtually
impossible to cater for every customer’s individual characteristics,
marketers, group customers to market segments by variables they
have in common. These common characteristics allow developing
standardized marketing mix for all customers in the segment (Dagmar,
2015).
According to Olayinka and Aminu (2006), market segmentation
provides the following benefits: Market segmentation is a
customer-oriented philosophy, enhances profits, efficient use of
marketing resources, enhances opportunities for growth, and retention
of customers.

34
 As already stated, segmentation is the basis for developing
targeted market and effective marketing plans. Furthermore, analysis
of market segments enhances marketing activities in particular
segments. A segment oriented marketing approach generally offers a
range of advantage for both businesses and consumers, such as:
Better serving customers’ needs and wants, Up-selling across the
customer journey, Absorption of purchasing power by price
differentiation, Attract additional customer groups, Sustainable
customer relationship in all phases of customer life cycle, targeted
Communication, Stimulating Innovation.

35
 CHAPTER THREE
METHODOLOGY
3.1 Introduction
This chapter focused on research design, population of the study,
sampling and sampling technique, instrumentation used for data
collection, method of data collection and analysis.
3.2 Research Design
The study was undertaken to ascertain the impact of market
segmentation on the sales of a company’s product. Due to the nature
of the study, descriptive survey method was used for the study.
3.3 Population of the Study
This refers to the total area the research work is spread over for

the purpose of a research. The staff of Sales Department in Flour Mills

Nigeria Plc, Lagos were taken as the population of the study. The size

of this population is estimated to be one hundred (100) staff.

3.4 Sample and Sampling Technique

Simple random sampling was used to select twenty five (25)

respondents as the sample size, which represents 25% of the

population. This technique used is considered appropriate because of

the fact that every member of the population has equal and

independent chance of being selected.

3.5 Instrumentation

Questionnaire was the major instrument used for this study. This

instrument was designed in the conformity with the research

questions. The researcher ensured that test validity, content and face

36
construction were observed in the construction of the questionnaire.

This instrument was given to a lecturer in Department of Business

Administration and Management, and the Supervisor to make

corrections and input and to affirm it validity before it was

administered.

3.6 Method of Data Collection

For the purpose of this study, relevant data were gathered within
and outside the organisation under study (Flour Mills Nigeria Plc,
Lagos). The data were collected from two main sources: the primary
and secondary sources.
a. Primary Sources: The sources used in obtaining primary data
were as follows:
i. Personal interview
ii. The use of well structure questionnaires.
Personal interview from the look of things, it because
evident that questionnaire method of information research
will not provide adequate information, hence this is the
need to include more personal interview as a source of
data. The questionnaires were designed in a manner to
cover all aspects of importance of market segmentation of
Flour Mills Nigeria Plc. Besides, the purpose for which this
research method was used is to ensure quick and adequate
information from the respondents.
b. Secondary data: The need for secondary sources for this
research is to get the theoretical background of the study,

37
 data obtained from this sources comprises mostly
information from textbooks, magazines and past project.

3.7 Method of Data Analysis

In order to analyzed and determine the findings from the data
and information gathered from different respondents, statistical
tabulation was done, using percentage. This was used because of its
simplicity with a view of determining the relationship between the
respondents and for clear understanding. Also, Chi-square was used to
test the hypotheses formatted for this study.
( o – fe ) 2
The formula: = 2 = ∑
fe
Decision Rule
The decision rule states that the null hypothesis (Ho) should be
rejected if the calculated value is greater than the table value and
accepted the alternative (Hi) hypothesis, on the other hand if the
calculated value is less than the table value, the null hypothesis (Ho)
should be accepted and reject the alternative hypothesis (Hi).

38
 CHAPTER FOUR
DATA ANALYSIS AND INTERPRETATION AND DISCUSSION
4.1 Introduction
This chapter deals with data presentation, analysis of the data
collected, hypotheses testing and interpretation as well as the
discussion of findings. Twenty five (25) questionnaire were
administered to the respondents and all were completed and retrieved.
4.2 Data Presentation and Analysis
The analyses of responses of the respondents are as follows:
Table 4.1: Does your company practice market segmentation?
Variables No. of Percentage
Respondents (%)
Yes 25 100
No - -
Total 25 100%
Source: Field Survey, 2022

From the above table, 25 respondents representing 100% of the

respondents agreed that the company practice market segmentation.

Table 4.2: Do you agree that segmentation of the market result in

penetration of the market?

Variables No. of Percentage

Respondents (%)
Yes 23 92
No 2 8
Total 25 100%
Source: Field Survey, 2022

From the above table, 23 respondents representing 92% agreed that

segmentation results in greater penetration of the market. While 2
respondents representing 8% of the respondents disagreed that
segmentation does not result in greater penetration of the market.

39
Table 4.3: Do you think that segmentation increases sales volume?

Variables No. of Percentage

Respondents (%)
Yes 24 96
No 1 4
Total 25 100%
Source: Field Survey, 2022

From table 4.3 above, 24 respondents representing 96% of the

respondents agreed that segmentation increases sales volume while 1
respondents representing 4% did not agree that segmentation
increases sales volume.
Table 4.4: In your opinion, which of the following would you say you
have achieved through market segmentation.
Variables No. of Percentage
Respondents (%)
Greater market share 13 52
Increase in sales volume 10 40
Good public image 1 4
All of the above 1 4
Total 25 100%
Source: Field Survey, 2022

From the above table, 13 respondents representing 52% of the

respondents agreed that the company have achieved greater market
share through segmentation while 13 respondents representing 40% of
the respondents agreed that the company have achieved increased in
sale volume while 1 respondents agreed that the company have
achieved all through segmentation. Of the respondents, 52% of the
respondents agreed that the company have achieved greater market
share through segmentation, while 13 respondents representing 40%
of the respondents agreed that the company have achieved increase in
sales volume while 1 respondents agreed that the company have
agreed that the company have achieved good public image, while

40
another respondents agreed that the company have achieved all
through segmentation.
Table 4.5: Which among these geographical zones serve as your
target market?
Variables No. of Percentage
Respondents (%)
Western zone 3 12
Easter zone 9 36
Northern zone - -
Southern zone 1 4
All of the above 12 48
Total 25 100%
Source: Field Survey, 2022

From the above table, 3 respondents representing 12% of the

respondents agreed that only western zone serves as the company’s
target market, while 9 respondents, representing 36% of the
respondents agreed that only eastern zones that serve as the
company’s target market only 1 respondent representing 4% of the
respondents agreed that southern zone serves as the company’s
target market while 12 respondents representing 48% of the
respondents say all the geographical zones serve as the company’s
target market.
Table 4.6: In selecting your target market, which factor influences
each decision?
Variables No. of Percentage
Respondents (%)
Demographic 2 8
Geographic 3 12
Psychographic 2 8
Buyer behaviour 5 20
All of the above 13 52
Total 25 100%
Source: Field Survey, 2022

From the above table, 2 respondents representing 8% of the

respondents says that demographic is the factor that influence each
decision in selecting a target market, while 3 respondents representing

41
12% of the respondents agreed that is only geographic factor, another
2 respondents agreed that is only influenced by psychographic factor,
while 5 respondents representing 20% of the respondents agreed that
it is only buyer behaviour that influences it buying behaviour, while 13
respondents representing 52% of the respondents agree that it is
influenced by all the factors in selecting target market.
Table 4.7: Is it true that market segmentation reveal market
opportunities?
Variables No. of Percentage
Respondents (%)
Yes 25 100
No - -
Total 25 100%
Source: Field Survey, 2022

From the table above, it shows that 25 respondents representing

100% of the respondents agreed that market segmentation reveal
market opportunities.

Table 4.8: In respect of the question above (11) to what extent as

that contributed to the effective coverage of your market?
Variables No. of Percentage
Respondents (%)
Very great extent 13 52
A great extent 9 36
To some extent 3 12
Total 25 100%
Source: Field Survey, 2022

From the above table, 13 respondents representing 52%

percentage of respondents agreed that segmentation has contributed
a very great extent while 3 respondents representing 12% of the
respondents says it has contributed to some extent.

42
Table 4.9: Is financial constraints lay serious problem in practicing
segmentation?
Variables No. of Percentage
Respondents (%)
Yes 17 68
No 8 32
Total 25 100%
Source: Field Survey, 2022

From the above table, 17 respondents representing 68% of the

respondents agreed that is financial segmentation, while 8
respondents representing 32% agreed that financial constraint is not a
serious problem in practicing segmentation.
Table 4.10: Does your company produce for specific age group?

Variables No. of Percentage

Respondents (%)
Yes 15 60
No 10 40
Total 25 100%
Source: Field Survey, 2022

From the above table, 15 respondents representing 60\% of the

respondents agreed that company produces for a specific age group
while 10 respondents representing 40% of the respondents says that
the company does not produce for specific age.
Table 4.11: If yes to the question above, specify such age group
Variables No. of Percentage
Respondents (%)
16 – 25 years 1 4
26 – 49 years 6 24
50 – 60 years - -
All of the above 18 72
Total 25 100%
Source: Field Survey, 2022

43
 From the table above, only 1 respondent representing 4% of the
respondents agreed the company produces for the ages of 16 – 25
years while 6 respondents representing 24% of the respondents says it
is between the age of 25 – 49 years while 18 respondents representing
72% of the respondents agreed that the company produces for all the
age from the age of 16 – 60 years.

Table 4.12: Does effective market segmentation increases the sales of

firm’s product?
Variables No. of Percentage
Respondents (%)
Yes 20 80
No 5 20
Total 25 100%
Source: Field Survey, 2022

From the above table, 20 respondents representing 80% of the

respondents agreed that effective market segmentation increases the
sales of a firm’s product while 5 respondents representing 20% says
effective market segmentation does not increases the sales of a firm’s
product.
Table 4.13: Which among the following factors influences the demand
for our beer?
Variables No. of Percentage
Respondent (%)
s
Income level of customers 11 44

Climatic differences among 2 8

geographical region and religions

Educational level of individual 1 4

customer.
11 44
All of the above
Total 25 100%
Source: Field Survey, 2022

44
 From the table above, 11 respondents representing 44% of the
respondents agreed that the income level of customer is the factor
that influences the demand for beer while 2 respondents representing
8% of the respondents says it is climatic differences among
geographical region and religions while respondent representing 4% of
the respondents says it is being influenced by the educational level of
individual customer, another 11 respondents representing 44% says
that demand for beer is being influenced by all the variables.
Table 4.14: How often do you carry out customer research?

Variables No. of Percentage

Respondents (%)
3 months 15 60
6 months 8 32
1 year 2 8
Not at all - -
Total 25 100%
Source: Field Survey, 2022

From table 4.14 above, 15 respondents representing 60% of the

respondents agreed that customer’s research is being done every 3
months, while 8 of the respondents said it is being done every 6
months, 2 of the respondents representing 8% said it is usually carried
out yearly.

Table 4.15: Is segmentation expensive and time consuming?

Variables No. of Percentage

Respondents (%)
Yes 21 84
No 4 16
Total 25 100%
Source: Field Survey, 2022

From the above table, 21 respondents representing 84% of the

respondents agreed that segmentation is expensive and time

45
consuming, while 4 respondents representing 16% respondents
disagreed.
Table 4.16: How successful has the practices of market segmentation

been in your company?

Variables No. of Percentage

Respondents (%)
Very successful 23 92
Fairly successful 2 8
Not successful - -
Total 25 100%
Source: Field Survey, 2022

From the above table, 23 respondents representing 92% of the

respondents says that market segmentation has been very successful
in their company while 2 respondents says it is fairly successful.

4.3 Test of Hypotheses

The hypotheses formulated for this study were tested and interpreted
as follows:
Hypothesis I
Ho: Effective market segmentation does not increase the sales
volume of a company’s product.
Hi: Effective market segmentation increase the sales volume of a
company’s product.
In testing this hypothesis, responses to question 16 was used from the
questionnaire administered.
Variables No. of Percentage
Respondents (%)
Yes 20 12.5
No 5 12.5
Total 25 100%
Source: Field Survey, 2022

46
Interpretation of formula:

Chi-square (2)

( fo−fe ) 2
2 = ∑
fe

Where:
Fo = the frequency actually observed in the field
Fe = the expected frequency
∑ = Summation of the observed and expected frequency.
( 20−12.5 ) 2 ( 5−12.5 ) 2
2 = 2 =
12.5 12.5

( 7.5 ) 2 (−7.5 ) 2
2 = 2 =
12.5 12.5

56.3 56.3
2 = 2 =
12.5 12.5

= 4.5 + 4.5

= 9

The degree of freedom is row 1 = 2 – 1 = 1

Our level of significance = .84

Since the calculated result is higher than the table result, then

the null hypothesis will be rejected (Ho) which says that effective

market segmentation reduces the sales of a firm’s product while the

alternative hypothesis will be accepted which is (Hi) which says that

effective market segmentation increases the sales of a firm’s product.

47
Hypothesis II
Ho: Market segmentation is not expensive and time consuming.
Hi: Market segmentation is expensive and time consuming.
In testing this hypothesis, responses to question 19 was used from the
questionnaire administered to the respondents.
Variables No. of Percentage
Respondents (%)
Yes 21 12.5
No 4 12.5
Total 25 100%
Source: Field Survey, 2022

( fo−fe ) 2
Formula: 2 = ∑
fe

( 21−12.5 ) 2 ( 4−12.5 ) 2
2 = 2 =
12.5 12.5

( 8.5 ) 2 (−8.5 ) 2
2 = 2 =
12.5 12.5

72.25 72.25
2 = 2 =
12.5 12.5

= 5.74 + 5.78

= 11.56 - 11.6

The value given 00.5 or 5% the degree of freedom = (R – 1)

=2–1=1

Out level of significance = 3.84

48
 Since the calculated result is higher than the table value, then

the null hypothesis will be rejected which says that segmentation is not

expensive and time consuming. While the alternative hypothesis will

be accepted which says that segmentation is expensive and time

consuming.

4.4 Discussion of Findings

In the course of this study, it was discovered that effective

market segmentation increases the sales of a firm’s product and the

profitability of an organisation. This was also confirm by the result of

the hypothesis tested. Also, from the information gathered, it was

revealed that segmentation is expensive and time consuming, but

despite that, it is still very important to business organisations.

49
 CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Findings
The study was conducted to examine the impact of market
segmentation on the sales of a business organisation. The following
were the major findings achieved at the end of the study.
i. It was discovered that effective market segmentation increases
the sales volumes of a company’s product.
ii. In the course of the study, it was also revealed that market
segmentation is expensive and time consuming.
5.2 Conclusion
From the findings of this study, the researcher drew the following
conclusion:
Market segmentation is the process of dividing a large and
heterogeneous market into relatively homogeneous segments that can
be reached with a distinct marketing mix. Market segmentation
enhances customers service, creates large market share, enhances
profits, efficient use of marketing resources, creates opportunities for
growth and retention of customers, enhances marketing activities in
particular segments and the overall performance of an organisation.
5.3 Recommendations
Based on the findings of this study, the researcher recommends
the following:
1. Since market segmentation enhances sales volume and the
overall performance of an organisation, manufacturing firms
should conduct market segmentation efficiently and effectively.

50
2. Management of business organisations should continue to invest
in research and development so as to meet the changing needs
of consumers, adjusting the overall organisational effort towards
meeting their demands of each market segment developed.
3. Sales promotion should be directed vigorously to market
segment to arouse the interest of the consumers. Firms should
conduct sales promotion, consumer promotion, trade fair
exhibition and shows. Consumer promotion should take the form
of free sample coupons, price off premium, demonstration,
seasonal discount prices. This will go a long way to retain and
increase customers in market segmentation.

51
 REFERENCES

Adetayo, J.O. (2006). Marketing Concepts and Applications: Ile-Ife:

Akin’s Printing Press.

Angel, L. (1972). Market Segmentation: Concept and Applications, New

Jersey: Prentice Hall.

Crofts, M. (1994). Marketing Segmentation, New York: McGraw-Hill

Books.

Dagmar, R. (2001). Why Segmentation, Johannesburg: Heinemann Pub.

Goetx, J. (1976). Effective Control of the Market Sector, Ohio: Chagman

Press.

Hamid, T., Neda, P. and Masound, V. (2017). Assessing the impact of

marketing mix on brand equity. International Journal of Scientific
Study, 5(4), 102-107.
Jason, G. (2021). Market segmentation theory (Finance)- explained.
The Business. Retrieved on 4th November, 2021 from
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financing.

Kotler, P. & Keller, K. (2006). Marketing Management (12th Ed.), New

York: Prentice Hall.

Kotler, P. (2002). Marketing Management Analysis: Planning,

Implication and Control, India: Prentice Hall.

Kotler, P. and Armstrong, G. (2010). Principles and Practice of

Marketing, New Delhi: Darling Kindersley/PVT Ltd and Pearson
Education.

Maina, S. (2015). The impact of market segmentation on the sales

volume of a company’s product or service. European Journal of
Business and Management, 7(1), 35-41.

Masoje, E.O. (2000). Principles and Practice of Marketing, London:

Prentice Hall.

McCarthy, J. I. (2001). Basic Marketing, Homewood Union: Richard Irwin

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McDaniel, C. (1999). Marketing, South Africa: South Western College

Pub.

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Michael, H. and Thomas, S. (2007). Business Marketing Management,
London: MacMillan

Olayinka, K.A. and Aminu, S.A. (2006). Marketing Management,

Planning and Control, Lagos: Sunduley Press.

Princel, M.W. (2000). Marketing: Basic Concepts and Decision, New

Jersey: Houghton Mifflin Company.

Shagginess, P. (2006). Marketing Strategy, United Kingdom:

Heinemann Publication.

Stanton, W.C. (2002). Fundamental of Marketing (6th Ed.), New York:

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Macmillan Press.

53
 APPENDIX 1

Department of Marketing,
School of Business Studies,
Auchi Polytechnic,
P.M.B. 13,
Auchi,
Edo State.

5th September, 2022

Dear Sir/Madam,

QUESTIONNAIRE ON THE SIGNIFICANCE OF MARKET

SEGMENTATION ON THE SALES OF A COMPANY’S PRODUCT

I am a final year student of the Department of Marketing, Auchi

Polytechnic, Auchi, Edo State.

As a partial fulfillment of the requirements for the award of

Higher National Diploma (HND) in Marketing, I am undertaking a
research on the impact of market segmentation on the sales of a
company’s product.

I wish to assure you that the information supplied will be treated

in strict confidence and the information required is purely for academic
purpose.

Thanks for your anticipated cooperation.

Yours faithfully,

MAHMUD MUHAMMED I.K.

Researcher.

54
 APPENDIX II

QUESTIONNAIRE

Instruction: Please mark () in the box corresponding to your

answer.

1. Which department are you?

a. Marketing [ ] b. Production [ ]
c. Personnel/Admin. [ ] d. Account [ ]

2. State your position in the company:

3. What is your sex?

a. Male [ ] b. Female [ ]

4. Marital Status:
a. Single [ ] b. Married [ ] c. Divorced [ ]

5. Does your company practice market segmentation?

a. Yes [ ] b. No [ ]

6. Do you agree that segmentation of the market result in greater

penetration of the market?
a. Yes [ ] b. No [ ]

7. Do you think market segmentation increases sales volume?

a. Yes [ ] b. No [ ]

8. In your opinion which of the following would you say you have
achieved through market segmentation?
a. Greater market store [ ]
b. Increase in sales volume [ ]
c. Good public image [ ]

9. Which among these geographical zone serves on your target

market? a. Western zone [ ] b. Easter zone [ ]
c. Northern zone [ ] d. Southern zone [ ] e All of the above [
]

10. In selecting your target market, which factor influences each

decision?
a. Demographic [ ] b. Geographic [ ] c. Psychographic
[ ]
e. All of the above [ ]

55
11. Is it true that segmentation reveals market opportunities?
a. Yes [ ] b. No [ ]

12. In respect of (11) above, to what extent has that contributed to

the effective coverage of your market?
a. Very great extent [ ] b. A great extent [ ]
c. To some extent [ ]

13. Is financial constraint any serious problem to practice market

segmentation?
a. Yes [ ] b. No [ ]

14. Does your company produce for specific age group?

a. Yes [ ] b. No [ ]

15. If yes to the question above, please specify such age below
a. 16 – 25 years [ ] b. 26 – 49 years [ ]
c. 50 – 60 years [ ] d. All of the above [ ]

16. Does effective market segmentation increases the sales of your

products? a. Yes [ ] b. No [ ]

17. Which among the following factor influences the demand for your
beer?
a. Income level customer [ ]
b. Climate difference among geographic region and religion [ ]
c. Educational level or individual customer [ ]
d. All of the above [ ]

18. How often do you carry out customer research?

a. 3 months [ ] b. 6 months [ ]
c. 1 year [ ] d. Not all above [ ]

19. Is segmentation expensive and time consuming?

a. Yes [ ] b. No [ ]

20. How successful has the practice of marketing segmentation been

in your company?
a. Very successful [ ]
b. Fairly successful [ ]
c. Not successful [ ]

56
IMPACT OF MARKET SEGMENTATION ON THE
SALES OF A COMPANY’S PRODUCT: A STUDY
OF FLOUR MILLS OF NIGERIA PLC, LAGOS

MAHMUD MUHAMMED I.K

MAT. NO: SBS/2122060049

DECEMBER, 2022

57