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Banking Segmentation
Previous research in the area of financial services
segmentation can be divided into groups according to the methodology
used (for a comprehensive review see Speed and Smith, 1992).
First, qualitative approaches that seek to address the needs
of particular market segments suggesting how segments might
be identified (actionability). Quantitative approaches providing
an assessment of the characteristics of the segment (demographics,
attitudes or choice criteria are combined with recommendations).
Finally, another group of research, quantitative in nature,
recognises the relationship between independent/dependent
variables and tests the significance of the relationship between
the pre-selected dependent variable and the independent variables.
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| In retail banking, customer segmentation is still
largely limited to the use of demographic or economic criteria
(profession, age, income, wealth) as the main dimensions for
segmenting the market (Meidan, 1984; Harrison, 1994). Such a
procedure that presumes a significant correlation between external
characteristics of customers and their needs is called a priori
segmentation. However, demographic and economic criteria are
only rough indicators for the need structures and the reaction
patterns of retail customers (Machauer and Morgner, 2001). |
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Recommended Reading
