Marketing segmentation strategies as a source of competitive advantage at East African breweries limited

Abstract

Organizations aspiring to meet the challenges of today’s rapidly changing markets and increasing competition require strategic marketing decisions to be founded on well-conceived strategies. For instance to be successful, firms have go to a market in substantially different ways depending on which market segment each service or product is competing in. Market segmentation is an adaptive strategy. The objective of the study was to establish the role marketing segmentation strategies as a source of competitive advantage at East African Breweries Limited. The study adopted a case study research design while the targeted interviewees were the managers in customer service, marketing, business development and finance. The study found that the company adopts different market segmentation strategies depending on the market niche that is targeted but the common segmentation strategies are demographic, geographical, behavioral and psychographic. It was further found that through market segmentation, the firm has been able to come up with targeted promotional campaigns which facilitates a wider market reach and also reduces the cost of advertising. Market segmentation has increased the rate and level of contact with its customers through faster identification of their needs and being able to address them promptly and that all these factors shows that indeed effective market segmentation is a source of competitive advantage to a firm. In conclusion, it is noteworthy to know that a firm’s competitive advantage is dependent upon all factors that influence buyer decision and there is need for a firm not to depend on a single market segmentation strategy but rather combine them in an appropriate mix that will lead to improved financial performance and consequently competitive advantage. The study recommends that EABL reviews their segmentation strategies regularly in order to accommodate the changes in the business environment which is very dynamic in nature and highly competitive. It was further recommended that a further study that empirically tests the effect of marketing segmentation on the financial performance of firms be undertaken.