Abstract

The objective of this study is to evaluate the effect of The Effects of market segmentation on Organisational Performance in Microfinance Institutions in Buea. This study employs a descriptive research design. Data for this study was Primary data and the instrument used in collecting the data was a questionnaire.

The study employs a simple random sampling to collect data from 53 employees. The inferential statistic was used as the method of analyzing the data using multiple regression. The findings of the study result established by ANOVA Statistic are similar to that of the regression coefficient.

The result shows that the P-value obtained (i.e. 0.001) for the regression coefficient is also lower than the alpha level of significance of 5% specified in SPSS for this analysis therefore, thus, it can be inferred from this result, that the ANOVA Statistic is similar to that of the regression coefficient.

Thus, the Alternate Hypothesis will be accepted while the Null Hypothesis will be rejected, which means that there is a significant relationship between microfinance market segmentation on the performance of the microfinance industry in Buea.

CHAPTER ONE

INTRODUCTION

1.1 Back Ground of the Study

Marketing has over the years advanced from various concepts and philosophies, which include the production concept, product concepts, and selling concepts. The marketing concept is viewed from the customer’s orientation philosophy which seeks to identify unsatisfied consumer needs and wants, and this develops goods and services tailored towards filling up and satisfying such needs though not all organization practices this concept but successful firms embark on it.

Given the intense and growing competition, the global quest for profitable sites amongst marketers of goods and services, it has become mandatory for firms to adopt strategies in order to excel, grow and remain in the market in order to achieve acting organizational objectives. (Minhas &Jacobs, (2005).

Marketing strategies are developed from marketing objectives and overall organizational objectives. Marketing strategies include the marketing objective of increase in sales, higher market shares, and growing market penetration awareness ovation to mention a few. In order to achieve these goals and objectives, marketing evaluation and strategies are developed and implemented.

The increasing world population has resulted in consumers becoming numerous and diverse in the buying requirements needs and characteristics since firms cannot effectively serve all of them in a broad market. It is inevitable to identify those parts of the market that are profitable and can be served effectively give the available organizational resources and capabilities, thus this calls for the adoption of effective and segmentation of the markets.

Marketing effect and segmentation is always a customer’s oriented philosophy this consistent with the marketing concept. Market segmentation is the process of subdividing a market into distinct and meaningful sub-set of customers who require a tailored called mat during a marketing program to satisfy their needs. According to Wilkie & Cohen (2006), many firms in the past adopted the mass marketing concept as strategies for sales turnover by embarking on mass production, mass distribution, and mass promotion of a single brand of products to all buyers.

The argument for this strategy was that it creates the largest potentials markets which lead to the lowest cost, both production cost and overhead cost, and the marketing costs which in turn results to lower prices or higher margins. But in this age of intense competition, the proliferation of marketing programs, functions, and greater customer advancement in education and awareness firms no longer practice the concept of “one size fit all” marketing. Hiam & Schewe (2010)

Market segmentation goes beyond product design consideration, as it extends to price, promotion, distribution variable, and having an overall knowledge of each segment needs in order to develop a matching marketing mix.

Firm do not go into segmentation in marketing until a thorough study of customer’s behavior in the market is conducted through study of customer effective of marketing research for better understanding of their distinct and homogeneous characteristics is required (Assael & Roscoe, 2006; Blattberg & Sen, (2015); Wind, (2002).

This ensures grouping together customers of similar requirements and characteristics. Essentially, it consists of the large identifiable group with similar wants, purchasing habits, geographical location, and buying requirement thus market segmentation is an approach that should be executed by firms for success enhancement.

To a large extent, it is a process of dividing the total heterogonous market for goods and services into several segments each of which tends to be homogeneous in all significant aspects. Management thus selects one or more of these market segment as the organization target market(s) and based on the understanding of their needs and wants, a matching marketing mix is envisaged, developed and directed towards satisfying them at a profit most importantly, segmentation enables the form to its marketing efforts and resources on the most profitable target market, in order to complete efficient by in one or two segments.

To be precise it involves a lot of dimensions or approaches in terms of segmenting the market such as the geographic, demographic, geographic behavioristic, and psychographic variables in dividing the total market into different groups with similarities between them.

Increasing sales cannot be achieved without the effective evolution of segmentation of marketing as a strategy. Because of the prospect involved in adopting market segmentation, firms desiring to achieve success embark on dividing the total market into segments that can be reached and satisfied efficiently and at a profit in consideration of the role market segmentation plays in increasing sales volume.

1.2 Statement of the Problem

The quest for increasing profitable state volume is for every organization. Both markets of services and tangible seek to enhance profit and sales turnover and the objectives of profitability can only be achieved when firms properly understand and apply effectively and market segmentation strategy.

Firms are also faced with the difficulty of identifying and selecting a particular market targets and satisfying them by blending the marketing mix elements thus market segmentation recognizes that every market is made up of distinguishable segments consisting of buyers with different needs, the task of clearly understanding consumer needs and wants, identifying various homogenous customers’ characteristics according to an outlined dimension in order to group them together adequately and to effectively develop a marketing mix to match these characteristics and buying requirement. All poses fundamental marketing problems to firms.

Marketing segmentation is one among the various strategies used in evaluating of marketing programs. There by segmenting markets into subsets with aim of satisfying customers groups and equally increase sale volume and profitability for the total organization and the stakeholders is an objective and goal of every business that practices the marketing concept.

Most organization encounter the problem of determining the appropriate pricing, promotional, and distribution strategy to adopt in satisfying their numerous customers. Though some firms find 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 to customer satisfaction. The importance or not of market segmentation as a strategy for increasing sales volume has become on research problem.

1.3 Research questions

The main research question;

What effect of market segmentation affects the performance of microfinance institutions (MFI) in Buea municipality?

The specific research questions;

1. How do microfinance institutions (MFI) in Buea municipality segment their market?
2. How does market segmentation affect the performance of microfinance institutions (MFI) in Buea municipality?
3. What are the relevant characteristics of market segmentation of microfinance institutions (MFI) in Buea municipality for competitive advantage?