market segmentation in banking sector

8/18/2019 Market Segmentation in Banking Sector

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• THE CONCEPT – BANK MARKETING

In this chapter we are going to see an Overview of Bank Marketing Concept .it’s

features, strategies and approach in the Indian perception.

• We define Bank Marketing as follows

“Bank Marketing is the aggregate of functions, directed at providing services

to satisfy customers’ financial and other related! needs and wants, more effectively

and efficiently that the competitors keeping in view the organi"ational o#$ectives of

the #ank%.

Bank Marketing activity. &his aggregate of functions is the sum total of all

individual activities consisting of an integrated effort to discover, create, arouse and

satisfy customer needs. &his means, without e'ception, that each individual working

in the #ank is a marketing person who contri#utes to the total satisfaction to customers

and the #ank should ultimately develop customer orientation among all the personnel

of the #ank. (ifferent #anks offer different #enefits #y offering various schemes

which can take care of the wants of the customers.

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• W!at is Bank Marketing"

#er$k We$er of Bar%la$s Bank call it “* process, consisting of identifying

the most profita#le markets now and in future+ assessing the present and the future

needs of the customers+ setting #usiness development goals and making plans to meet

them+ and managing various services and promoting them to achieve the plans all in

the conte't of a changing environment in the market%.

• W!$ Bank Marketing"

• Awareness a&ong C'sto&ers

Modern technology has made customers aware of the developments in the

economic environment, which includes the financial system. -inancial needs of the

customers have grown multifold into various forms like uick cash accessi#ility,

money transfer, asset security, increased return on surplus funds, financial advice,

deferred payments etc. /ith a wide network of #ranches, even in a dissimilar #anking

scenario, customers e'pect the #anks to offer a more and #etter service to match their

demands and this has compelled #anks to take up marketing in right earnest.

• ('alit$ as a Ke$ )a%tor

/ith the opening up of the economy, fast change has #een e'perienced in

every activity, and #anking has #een no e'emption. 0uality is the watchword in the

competitive world, which is market driven and #anks have had to face up to this

emerging scenario. In fact, it may not #e out of place to reiterate that uality will in

future #e the sole determinant of successful #anking ventures and marketing has to

focus on this most crucial need of the hour.

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• Growing Co&*etition

Increased completion is #eing faced #y the Indian #anking industry from

within the system with other agencies #oth, local and foreign, offering value added

services. Competition is no more confined to resource mo#ili"ation #ut also to lending

and other areas of #anking activity. &he foreign commercial #ank with their superior

technology, speed in operations and imaginative positioning of their services has also

provided the necessary impetus to the Indian #anks to innovate and complete in the

market place.

• Te%!nologi%al Ad+an%es

&echnological innovation has resulted in financial product development

especially in the international and investment #anking areas. &he western e'perience

has demonstrated that technology has not only made e'ecution of work faster #ut has

also resulted in greater availa#ility of manpower for customer contact.

• Marketing A**roa%! in Banks

/ith the need for marketing in #anks having evolved out of the changing

environment and constant interplay of various interdependent factors, the importance

of a systematic approach to marketing cannot #e overstressed. &he application of a

marketing approach in #anks will therefore involve2

a. Identifying customers’ financial needs and wants+

#. (eveloping appropriate #anking services to meet these needs+

c. 3ricing for the services so developed+

d. 4etting up suita#le outsells 5 #anks #ranches+

e. *dvertising to promote the services to the e'isting as well as

prospective customers.

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,*e%ial )eat'res of Bank Marketing

• Banking product cannot #e seen or touched like manufactured products

intangi#ility!

• In marketing #anking products, the product and the seller are in separa#le+ they

together define the #anking product insepara#ility!

• Banking products are products and delivered at the same time+ they cannot #e

stored and inspected #efore delivering’ perisha#ility!

• 4tandardi"ation of #anking product is difficult varia#ility!

&he #ank marketing is than an approach to market the services profita#ility. It is a

device to maintain commercial via#ility. &he changing perception

of #ank marketing has made it a social process. &he significant properties of the

holistic concept of management has made #ank marketing a device to esta#lish a

#alance #etween the commercial and social considerations, often considered to the

two opposite wings. * compendium of two words #anks and marketing thus focuses

our attention on the following2

• Bank marketing is a managerial approach to the market services.

• It is a social process to su# serve social interests.

• It is a fair way of making profits

• It is an art to make possi#le performance7orientation.

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• It is a professionally tested skill to e'cel competition.

• Bank Marketing In t!e Indian Pers*e%ti+e

&he formulation of policies is su#stantially influenced #y the emerging trends

in the national and international #usiness conditions. &he level of income,

e'pectation, and the rate of literacy the geographic and demographic considerations,

the rural or ur#an orientation, the chances in economic systems the freuent use of

technologies are some of the key factors governing the development plan of an

organi"ation.

In the development sensitive welfare economy, the formulation of a sound

marketing mi' is found a difficult task. &he nationali"ation of the 9eserve Bank of

India is a landmark in the development of Indian Banking system which in a true

sense paved avenues for ualitative7cum uantities improvements. &his makes it

essential that the reserve Bank of India and the policy makers of the pu#lic sector

commercial #anks think in favor of conceptuali"ing modern marketing which would

#ring a radical change in the process of uality up gradation.

&he first task #efore the pu#lic sector commercial Banks is to formulate the

marketing mi' which suits the national socio7economic reuirements. &o #e more

specific the peripheral services need freuent innovations, since this would #e helpful

in e'celling competition. &he designing of a product portfolio is found significant to

maintain the commercial via#ility of the pu#lic sector #anks. &he #anks professionals

need to assign due weightage to their physical properties. &hey are supposed to look

smart active and attractive.

• Bank Marketing ,trategies

&he marketing research considered #eing a systematic gathering, recordingand analysis of data makes ways for making and innovation the marketing decisions.

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&he information collected from the e'ternal sources #y conducting surveys helps #ank

professional in different wants.

In the #ank services, the formulation of overall marketing strategies is

considered significant with the view point of tapping the potentials, e'panding the

#usiness and increasing the marketing share. &he increasing domination and gaining

popularity #anks, the popularity #anks, the profita#le schemes of the non7#anking

organi"ation mounting cra"e among the customers for private #anks have made the

task of influencing the impulse of customers a #it difficult.

&he marketing research simplifies the task of studying the magnitude of

competition #y opinion surveys and the feed #ack customers, the multi7dimensional

changes in the services mi' can #e made productive if it is #ased on marketing

research.

It is su#mitted that the #anking system is on the threshold of a momentous era

of change and continuity in growth and development, of individual customer needs

and corporate practices, technology and competitions. &he role of marketing in the

#anking industry continues to change. -or many years the primary focus of marketing

was pu#lic returns. &hen the focus shifted to advertising and sales promotion. &hat

was followed #y a focus on the development of a sales culture. ;ow the focus is on

the individual customer meeting and even anticipating his or needs and developing

trusting, long7term relationships #y delivering high uality personali"ed service.

Marketing #oth as a philosophy and an activity+ is e'pected to contri#ute immensely

to the reali"ation of goals #oth immediate and future. *ll though all the elements of

the marketing concept customer satisfaction, profit integrated framework and social

responsi#ility must receive the greatest emphasis in the years a head.


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&hey must #e guided #y the dictum of Ma!at&a Gand!i-

“* customer is the most important visitor in our promises. =e is most

dependent on us. /e are depending on him. =e is not an interruption on our work. =e

is the purpose of it. =e is not an outsider on our #usiness. =e is part of it. /e are not

doing him a favour #y serving him. =e is doing as a favour #y giving as an

opportunity%.

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• MARKETING CONCEPT, – IT., APP/ICATION

TO BANKING

W!at is Marketing"

&here are many definitions of marketing. &he #etter definitions are focused

upon customer orientation and satisfaction of customer needs.

“Marketing is the social process #y which individuals and groups o#tain what

they need and want through creating and e'changing products and value with others.%

-Kotler.

“Marketing is not only much #roader than selling, it is not a speciali"ed

activity at all It encompasses the entire #usiness. It is the whole #usiness seen from

the point of view of the final result, that is, from the customer?s point of view.

Concern and responsi#ility for marketing must therefore permeate all areas of the

enterprise.%

-Drucker.

/hen we apply marketing to the #anking industry, the #ank marketing

strategy can #e said to include the following2

* very clear definition of target customers. &he (evelopment of marketing

mi' to satisfy customers at a profit for the #ank. 3lanning for each of the @source’

markets and each of the @user’ markets * #ank needs to #e dou#ly market oriented

its has to attract funds as well as users of funds and services!.Organi"ation and

*dministration.

In an age of electronic #anking, the concept of #ank marketing is reuired to

#e reviewed. * num#er of e'perts agreed with this view that marketing is unavoida#ly

a social concern. &hus a change in the concept of marketing paved the ways for a

change in the concept of #ank marketing. It is right to say that #ank marketing isrelated to the product, promotion, place, pricing and people decision of the #anking

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)or&'lating

and

Inno+ating

t!e Mi0es

E0%elling

%o&*etition

,atisf$ing

t!e

%'sto&ers

1nderstandi

ng t!e

%'sto&ers

2'stifi%ation

for a**l$ing

t!e

Marketing in

Banks

organi"ation which simplifies the task of restructuring or revamping their decisions in

tune with the changing #usiness environment.

T!e following arg'&ents 3'stif$ t!e a**li%ation of &arketing *ro%ess to

4anking-

-ig.)

application of marketing process to #anking.


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Marketing helps in achieving the organi"ational o#$ectives of the #ank. Indian

#anks have duel organi"ational o#$ective commercial o#$ective to make profit and

social o#$ective which is a developmental role, particularly in the rural area.

Marketing concept is essentially a#out the following few thing which

contri#ute towards Banks’ success2

)! &he #ank cannot e'ist without the customers.

1! &he purpose of the #ank is to create, win, and keep a customer.

6! &he customer is and should #e the central focus of everything the #anks does.

8! It is also a way of organi"ing the #ank. &he starting point for organi"ational

design should #e the customer and the #ank should ensure that the services are

performed and delivered in the most effective way. 4ervice facilities also

should #e designed for customers’ convenience.

:! ltimate aim of a #ank is to deliver total satisfaction to the customer.

#ank.

*ll the techniues and strategies of marketing are used so that ultimately they

induce the people to do #usiness with a particular #ank. Marketing is an

organi"ational philosophy. &his philosophy demands the satisfaction of customers

needs as the pre7reuisite for the e'istence and survival of the #ank. &he first and

most important step in applying the marketing concept is to have a whole hearted

commitment to customer orientation #y all the employees. Marketing is an attitude of

mind. &his means that the central focus of all the activities of a #ank is customer.

Marketing is not a separate function for #anks. &he marketing function in Indian Bank

is reuired to #e integrated with operation.

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Marketing is much more than $ust advertising and promotion+ it is a #asic part

of total #usiness operation. /hat is reuired for the #ank is the market orientation and

customer consciousness among all the personal of the #ank. -or developing marketing

philosophy and marketing culture, a #ank may reuire a marketing coordinator or

integrator at the head office reporting directly to the Chief E'ecutive for effective

coordination of different functions, such as marketed research, training, pu#lic

relations, advertising, and #usiness development, to ensure customer satisfaction.

&he E'ecutive (irector is the most suita#le person to do this coordination

work effectively in the Indian pu#lic sector #anks, though ultimately the Chief

E'ecutive is responsi#le for the total marketing function.

=ence, the total marketing function involves the following2

a! Market research i.e. identification of customer’s financial needs

and wants and forecasting and researching future

financial market needs and competitors’

activities.

#! 3roduct (evelopment i.e. appropriate products to meet consumers’

financial needs.

c! 3ricing of the service i.e., promotional activities and distri#ution

system in accordance with the guidelines and

rules of the 9eserve Bank of India and at the

same time looking for opportunities to satisfy

the customers #etter.

d! (eveloping market i.e., marketing culture among all the customer7

consciousness @3ersonnel’ of the #ank through

training.

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&hus, it is important to recogni"e the fundamentally different functions that

#ank marketing has to perform. 4ince the #anks have to attract deposits and attract

users of funds and other services, marketing pro#lems are more comple' in #anks

than in other commercial concerns.

Indian #anking is at cross roads today. /ith the deregulation and li#erali"ation

process in full swing, the conseuent policy changes introduced in the Indian financial

system in general and #anking in particular are effecting unprecedented changes in its

functioning. /ith the emerging changes did spring up new challenges of commercial

via#ility, cost effectiveness, effective marketing strategy, etc. Market oriented policies

also gave #irth to new players like foreign and private sector #anks and su#sidiaries

offering varied high tech and cost effective 4ervice. &here was an a#solute shift from

sellers into #uyers’ market, esta#lishing the @consumer’ as the key factor in the

market. &he dictum “as the #ank e'ists #ecause of its customers, has #ecome more

pronounced and relevant in the present conte't%. &hus, marketing constitutes the key

strategy for #anks to retain good customers and also anticipate their future demands.

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• Introd'%tion of Market ,eg&entation

*n organi"ation cannot satisfy the needs and wants of all consumers.

&o do so may result in a massive drain in company resources. 4egmentation is simply

the process of dividing a particular market into sections, which display similar

characteristics or #ehaviour. &here are a num#er of segmentation varia#les that allow

an organi"ation to divide their market into homogenous groups.

&he identification of market occupies a place of outstanding significance in

the #anking industry. &his helps in transforming the plans into action or turning the

dreams into realities. &he concept Market 4egmentation #ased on the principle of

(ivide and 9ule. 4ince the very #eginning of the marketing, the market segmentation

has #een practiced to get the productive result. 4egmentation makes possi#le tailoring

of products and marketing programmes uniuely suita#le for each segment.

4egmentation is a method of dividing and su#7dividing the markets into

different small segment. By segmenting, #y dividing, #anks find it convenient to

identify and thus #anks succeed in understanding the changing needs and

reuirements, likes and dislikes and the #ehavioural profile of customers. Of course,

no two #uyers are found identical in all respects. =owever there are certain

characteristics shared #y the large groups. &he segmentation is thus a process of

understanding the market in aright perspective which simplifies the task of

formulating a creating marketing strategy.

• #efinition 5

* num#er of e'perts have e'pressed their views regarding segmentation.

3hilip Fotler says, “Market segmentation is the su#division of market into

homogeneous su#sets of customers where any su#set may conceiva#ly #e selected on

a market target to #e reached with a distinct marketing mi'.%

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4tanton opines, “market segmentation consist of taking the total heterogeneous

market for a product and dividing into several su# markets or segments each of which

tend to #e homogeneous in all significant aspect.%

In view of the aforesaid views of different marketing e'perts, it is o#served

that market segmentation is the grouping or division or su# division of markets. It is a

device to help marketers in formulating a sound marketing mi' which gets a positive

response.

-ig ).

&he concept of segmentation can #e made clear with the help of a#ove figures27

• T!e Traditional A**roa%! to Market ,eg&entation

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=istorically, the traditional approach to segmentation attempts to segment the

market using one or more! of four schemes.

&he first scheme attempts to segment the market #ased on how customers and

prospects #ehave #ehavioral segmentation!.

&he second scheme attempts to segment the market #ased on who they are

demographic or life7phase segmentation!.

&he third scheme attempts to segment the market #ased on how much worth

they potentially hold for the organi"ation profita#ility or current value segmentation!.

&he fourth scheme attempts to segment the market #ased on what customers

think a#out the features of the product or service in uestion attitudinal

segmentation!.

Each of these four approaches to segmentation contri#utes an important piece

in understanding the market, yet, each of these approaches displays significant

limitations.

• W!$ ,eg&entation"

/hen it comes to marketing strategies, most people spontaneously think a#out

the 83’s 3roduct, 3rice, 3lace, 3romotion! e'tended #y three more 3s for

marketing services 3eople, 3rocesses, 3hysical Evidence!.

Market segmentation and the identification of target markets, however, are an

important element of each marketing strategy. &hey are the #asis for determining any

particular marketing mi'. Giterature suggests the following steps2

):


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-ig.)

&he importance of market segmentation results from the fact that the #uyers of

a product or a service are no homogenous group. *ctually, every #uyer has individual

needs, preferences, resources and #ehaviors. 4ince it is virtually impossi#le to cater

for every customer’s individual characteristics, marketers group customers to market

segments #y varia#les they have in common. &hese common characteristics allow

developing a standardi"ed marketing mi' for all customers in this segment.

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• Market seg&entation in 4anks

In #anking services the #anks are e'pected to satisfy all type of customers like,

rural customers, ur#an customers, high earning and low earning customers, small

scale and large scale entrepreneurs and so on.

=ence segmentation of market if considered to #e important in #anking

industry. 4ince #ank have to deal with different types on customers from field and

localities so #anking industry need segmentation. * marketing plan or product launch

cannot #e successful without proper segmentation. Market segmentation is perhaps

the most difficult and comple' decision a #ank must make when deciding its market

strategy.

)ollowing is t!e ta4le s!owing seg&entation in 4anks

,e%tors ,'4seg&ent

6- *gricultural 4ector a. )D acre Ha#ove #. : to )D acre

c. 1 acre H #elow

d. Gandless

1. =ousehold 4ector Incomes 2 a. a#ove 9s.) lack 3.*

#. 9s.:DDDD to 9s.)DDDDD

c. 9s.1:DDD to 9s.:DDDD

d. #elow 1:DDD e. a#ove 9s.:DDD

f. 9s.:DDD to #elow 9s.1DDD

6. Institutional 4ector a. 9eligious

#. Educational

c. Charita#le and clu#s

8. 4ervice 4ector a. -inancial 4ervices

#. ;on7financial 4ervices

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7- &rade and Commerce a. /holesalers

#. 9etailers

c. Merchant E'porters

8- Industrial 4ector a- 3rivate 4ector

#. 3u#lic 4ector

c. Co7operative 4ector

d. Garge74cale 4ector

e. 4mall 4cale 4ector

f. &iny 4ector

• I&*ortan%e of &arket seg&entation to t!e 4anking

ser+i%e 5

Gike other goods manufacturing and service generating organi"ation, #anks

find segmentation of market important to the development the #anking organi"ation.

If the segmentation done in a right way, the #anks finds it easier to formulate a

strategic marketing plan. &he following facts testify the instrumentality of

segmentation in the #anking services.

6 - Instr'&ental in e0*loring o**ort'nities 5

It is right to mention that segmentation is very much effective in e'ploring

profita#le and untapped or non7optimally tapped opportunities. It is wellknow that

while segmenting, the market is divided into different small group and su#7groups and

this simplified the tack of studying and knowing the market in a right prospective. If

#anks know a#out the rural segment, the opportunities are e'plored in the rural areas.

&hus #anks divide the market and so they know a#out the market which makes it

easier to identify the opportunities.

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9 - A%ti+e in for&'lating a so'nd &arketing strateg$ 5

&he market segmentation helps the #anks in formulating a sound marketingstrategy. &he formulation of a strategy is found significant and the #ank policy makers

and senior e'ecutives find it possi#le to develop the package in the face of changing

level of e'pectation. 3ackage is a com#ination of num#er of services 5 schemes

keeping in view the changing needs and reuirements of a particular segment.

4ince the #anks are found in a position to know the hierarchy of needs of a particular

segment, the product strategy can #e formulated. In addition the promotional

measures can also finali"ed in the face of the receiving capacity of that segment.

: - Hel*f'l to *oli%$ *lanners 5

/hatever the policy are formulated should have a close link with the emerging

trends in the #usiness environment. &he task of formulating plan is found challenging.

&he #anks need sufficient information a#out the different segments, so that they

succeed in formulating a strategic plan for future marketing. It helps the #anks in

getting the desired information for incorporating necessary improvements. &he

development of personnel, installation of sophisticated information technologies,

innovation in the service mi', etc. take more time and reuire adeuate finance.

7 - Enri%!ing t!e &arketing reso'r%es 5

&he setting of a target the particular segment, there is no meaning when #anks

lack marketing resources. 4ince the market is competitive and foreign #anks are found

making the #usiness environment more volatile, it is essential that the #anks make

availa#le the adeuate resources to increase the market share for e'celling

competition. 4o that #anks needs due support to make the marketing resources

optimal to the changing #usiness conditions.

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• Need ; fa%tors infl'en%ing Market ,eg&entation 5

3hilip Fotler has descri#ed the dilemma of the seller especially, a seller

dealing with masses, e.g. #anks! as follows2

“=ow the seller determines which #uyer’s characteristics produce the #est

partitioning of a particular market &he seller does not want to treat all customers

alike nor does he want to treat them all differently%.

Banks deal with individuals, group of persons and corporates, all of whom

have their likes and dislikes. ;o #ank can afford to assess the needs of each and every

individual #uyer actual or potential!.

4egmentation of the market into more or less homogenous groups, in terms of

their needs and e'pectations from the #anking industry, provides a solution to this

pro#lem.

&his involves dividing the market into ma$or market segments, targeting one

or more of this segments, and developing products and marketing programs tailor7

made for these segments.

In the first segmentation, the market is divided from a unitary whole, to groups

of #uyers who might reuire separate products and marketing mi'. &he marketer

typically tries to identify different segments in the market and develop profiles of

resulting market segments.

&he second step is market targeting in which each segment’s attractiveness is

measured and a target segment is chosen #ased on its attractiveness.

&he third step is product positioning which is the act of esta#lishing a via#le

competitive position of the firm and its offer in the target segment chosen.

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In the process of segmentation, the market can #e divided into ma$or segments

which are gross slices of the market, or into smaller specially formed segments,

otherwise known as niches. ;iche customers have a specific set of needs which the

markerter tries to address. /hile a market segment attracts several competitors, a

niche attracts fewer competitors and therefore, a company should clearly define its

target segment and devise strategies to target the customer, so that it has a competitive

advantage in the segment.

&hese concepts can #e applied in personal #anking #y an Indian Bank.

&raditionally, Indian Banks have not had any conscious strategy for selecting

customers from the personal #anking area, apart from some #anks which have a

geographic concentration strategy such as concentrating on a particular region or

state. &hese #anks will have to segment the market on certain #asis, and identify

market segments or niches which they want to cater to. -or e'ample, a #ank like 4BI

may not #e a#le to cater high income groups say, managers, professional, ;9Is, etc.

who earn a#ove 9s. 8,DD,DDD p.a. and who want a higher uality of products 5 services

and who are willing to pay for them!, as the services reuired #y such a profile of

customers are entirely different from the kind of products 5 services 4BI can offer.

T!e following *oints 3'stif$ t!e need of Market seg&entation-

• Market segmentation is needed in order to concentrate attention on a specific

target market.

•&o ad$ust marketing mi' as per the need and reuirements of specific group.

• -or the introduction of strategy of divide and conuer

• It is needed as it acts as a #ase of present customer oriented marketing

philosophy. *s a result customer get #etter services

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• It is needed to create and innovate the products as per the needs and

e'pectation of customer of each market segment

• Benefits of &arket seg&entation in 4anking ser+i%e 5

a! =elps in #etter understanding of the customers’ needs and wants.

#! Better targeting and position of the product.

c! Encourages two7way communication among the potential #uyer and the #anks

d! Maintaining effective relationship with the customers.

e! 9etaining the e'isting customers and attracting new ones.

f! Improving service delivery standards.

g! 9educing cost 5 e'penses on various marketing activities and increases market

share+ resulting in higher profits.

h! Improving the marketa#ility of #anks products and services.

i! Improving #anks marketing strategies.

$! Improving #anks marketing plans.

k! Improving #anks #usiness’s marketing position.

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•/i&itations 5

• &oo much concentration of few segments is dangerous. If the market

segments are not selected properly or marketing mi' is not ad$usted properly

from time to time.

•9ational segmentation is difficult 2 7

• It is difficult to have accurate market segmentation in a vast country like India

with diversity as regards demographic ,and socio7economic factors. 4uch

segmentation is difficult, complicated and may not prove to #e accurate.

• Market segmentation strategy has special draw#acks as regards Costs and

Coverage. It increases marketing costs to reach customers of different

segment.

• npredicta#le consumer #ahaviour 2 7

• =uman #eing and his #ehaviour is unpredicta#le. &herefore market segments

may prove to #e wrong.

• Inadeuate information and data due to which rational segmentation may not

#e possi#le. (efective 5 deceptive varia#les used for segmentation may prove

to #e costly.

• Changing marketing environment makes market segmentation ineffective as

the #ank has no control on the e'ternal factors responsi#le for changes in themarket environment.

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• Conservative managements do not give much importance to the concept of

market segmentation and conduct their marketing activities as per old

methods.

Initiation of ,eg&entation in India

4tate Bank of India was the first Indian Bank to adopt the concept of market

segmentation. In )>1, it reorgani"ed itself on the #asis of ma$or market segments

dividing customers on the #asis of activity and carved out 8 ma$or market segments,

vi".

• Commercial and Institutional,

• 4mall Industries and 4mall Business 4egment,

• *griculture,

• 3ersonal and 4ervices Banking.

T!e o43e%ti+es of t!is s%!e&e were

• (eeper penetration and coverage of market #y looking outwards.

• *deuate fle'i#ility of organi"ation to accommodate growth and rapid change,

• (elegation of work for releasing senior management for more futuristic tasks.

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Market seg&entation strateg$

Market segmentation as a marketing strategy is a recent development.

4egmentation is supplementary to marketing mi'. By successfully segmenting the

market, evaluating the features of each of the segments and #y applying a fair

com#ination of marketing mi', a marketing manager is likely to get good reward in

terms of sale of products, profit, and goodwill. &he #enefits of market segmentation

will #e availa#le only when the segmentation is introduced properly. &his reuires

knowledge, e'perience and maturity and naturally this responsi#ility should #e given

to senior marketing e'ecutives. Market segmentation strategy is certainly useful to

consumers and marketing #anks.

* #ank should identify the most promising and convenient segment of

the total market and concentrate its marketing efforts on that segment for #etter

results. &his suggests that the target market must #e selected and concentrated attack

should #e made on the same through the effective use of marketing mi'. &his is

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descri#ed as segmentation strategies or market targeting strategies. &here are three

alternative marketing strategies as noted #elow 2

-ig.)

Mass ; 1ndifferentiated Marketing ,trateg$ 5

In mass marketing sale of one product 5 service to the entire market. In this

we find low cost of production since it is #ased on large scale economies

which make it possi#le to adopt a price structure which is low and uniform.

such a segmentation strategy is found suita#le to the organi"ation having a

market. &he strategy relies on mass marketing and mass advertising. *n

organi"ation practicing undifferentiated marketing typically develops an offer

aimed at the largest segments in the market. /hen we talk a#out the #anking

organi"ation, we do find this strategy effective to savings accounts in the

conte't of response and no particular marketing mi'.

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M'lti*le or #ifferentiated ,trateg$ 5

&his strategy adopted #y the organi"ations where a num#er of products and

services are sold to selected market segment in order to increase overall sales. In

differentiated strategy, the cost however higher than in mass marketing. &he

#anking services are also found differentiated into segments. In certain services

the response of the market may #e varied like term deposits of different maturities

or mi' of different deposit schemes. &he impulse #uying of a customer isinfluenced #y the silent features of the concerned services hence purchasing

power or spending power is found here insignificant. &hus in #anking services for

the undifferentiated market, we so not need a specified marketing mi' #ut for

differentiated market, we essentially need #oth depending upon the nature of

schemes. 4ince the competition is found increasing, the #anking organi"ation has

#een found launching a num#er of services5 schemes in tune with the changing

potentials and reuirements of different segments. &his strategy is thus found to

increase the market share so all that all the segments are tapped optimally.

Con%entrated or Ni%!e &arketing 5

Organi"ation concentrating on selling to a small market segment or niche is called

as a concentrated or ;iche marketing. 4ome points make it clear that segmentation,

especially for the #anking services focuses on differentiated marketing strategy. Of

late, we find a num#er of term deposits containing a good num#er of outstanding

features #ut normally all the features are not found in all the schemes. /hile

formulating a strategy for market segmentation, it is imperative that the policy

planners innovate their marketing strategies keeping in mind the segment for which

the services5schemes are to #e launched. &his simplifies the task of #ank professional,

especially while influencing the potential customers of that segment. &he motive is to

influence the profita#le segment #y innovating the marketing mi'es. In this

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concentrated marketing strategy, attention is concentrated on one specific target

market only. More attention is given to target consumers and more satisfaction is

offered to them.

Reason for Effe%ti+e Market ,eg&entation ,trateg$

*s already stated, segmentation is the #asis for developing targeted and

effective marketing plans. -urthermore, analysis of market segments ena#les

decisions a#out intensity of marketing activities in particular segments.

* segment7orientated marketing approach generally offers a range of

advantages for #oth, #anks and customers

6- Better ser+ing %'sto&ers needs and wants

It is possi#le to satisfy a variety of customer needs with a limited product

range #y using different forms, #undles, incentives and promotional activities. Many

#anks organi"e it’s products and services #y customer groups. &hey offer the same

products to all customer groups. ;evertheless, they suggest product #undles and

supporting services that are individually tailored for the needs of each particular

group. &hus, segment7specific product #undles increase chances for cross selling.

9- Hig!er Profits

It is often difficult to increase prices for the whole market. ;evertheless, it is

possi#le to develop premium segments in which customers accept a higher price level.

4uch segments could #e distinguished from the mass market #y features like

additional services, e'clusive points of sale, product variations and the like. * typical

segment7#ased price variation is #y region. &he generally higher price level in #ig

cities is evidence for this.

/hen differentiating prices #y segments, #anks have to take care that there is

no chance for canni#ali"ation #etween high7priced products with high margins and

#udget offers in different segments. &his risk is the higher, the less distinguished thesegments are.

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:- O**ort'nities for Growt!

&argeted marketing plans for particular segments allow to individually

approach customer groups that otherwise would look out for speciali"ed niche

players. By segmenting markets, #anks can create their own @niche products’ and thus

attract additional customer groups.

Moreover, a segmentation strategy that is #ased on customer loyalty, offers the

chance to attract new customers with starter products and to move these customers on

to premium products.


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*n undifferentiated marketing strategy that targets at all customers in the total

market necessarily reduces customers’ preferences to the smallest common #asis.

4egmentations provide information a#out smaller units in the total market that share

particular needs. Only the identification of these needs ena#les a planned development

of new or improved products that #etter meet the wishes of these customer groups. If

a product meets and e'ceeds a customer’s e'pectations #y adding superior value, the

customers normally is willing to pay a higher price for that product. &hus, profit

margins and profita#ility of the innovating #anks increase.

=- Hig!er Market ,!ares

In contrast to an undifferentiated marketing strategy, segmentation supportsthe development of niche strategies. &hus marketing activities can #e targeted at

highly attractive market segments in the #eginning. Market leadership in selected

segments improves the competitive position of the whole organi"ation. It strengthens

the #rand and ensures profita#ility. On that #asis, organi"ations have #etter chances to

increase their market shares in the overall market.

*s much as strategies are good, #ank should avoid using one strategy for all

products or marketing applications effective segments or marketing applications

effective segments. * strategy will vary according to what are the marketing

o#$ectives. In the case of attracting new customers who have no history with the #ank.

&he #ank will come up with a wedge product strategy where they give customers of

other #anks a chance to sample some of its products or services for the time #eing and

this will ena#le them to cross7sell more profita#le products to them and create a long

lasting relationship with them.

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Criteria for ,'%%essf'l ,eg&entation

In this chapter we are discussing a#out the which sectors, #anks are going to

segment and how su# segment .

4egmentation in a right fashion makes the ways for profita#le marketing. &his

helps policy planner in formulating and innovating the policies and at the same time

also simplifies the task of #ank professionals while formulating an innovating the

strategic decisions. &he #anking organi"ation also segment market and for the same

they are supposed to assign due weightage to the following criteria which would help

them in many ways. &he following criteria make possi#le rig segmentation.

&he #anking organi"ation need to segment and su#7segment the se'tors where

they succeed in e'ploring the #usiness potentials or say the profita#le opportunities.

*n important criterion for market segmentation the economic system in which

we find agricultural sector, industrial sector, services sector, household sector,

institutional sector and rural sector reuiring of weightage while segmenting.

6- Agri%'lt'ral ,e%tor

the agricultural sector assumes a place of outstanfing significance and the

#anking organi"ation may find profita#le opportunities if they segment this market

into different categories In the agricultural sector, there are four category rise since

the needs of all the categories cant’s #e identical.

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-ig.)!

&he mechani"ation of agriculture, the improved or scientific system of

activation, the help of nature, the magnitude of risk, the availa#ility infrastructural

facilities influence the level of e'pectations vis7J7vis the needs and reuirements. &he

#anking organi"ations are supposed to know and under stand the changing

reuirements of different categories of farmers.

9- Ind'strial ,e%tor

&he #anking organi"ations su# serves the interests of the industrial sector. &he

large7si"ed, small7si"ed co7operative and tiny industries use the services of #anks. &he

e'pectations of all the categories cants are uniform.

fig.1!

&he #anking organi"ations are supposed to have indepth knowledge of the

changing needs and reuirements of the industrial segment.

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:- ,er+i%es se%tor

It is an important sector of the economy where the #anking organi"ations get

profita#le #usiness. &he two categories of organi"ations such as profit7making and

not7for7profit making are found important in the very conte't.

fig.6!

&he #anking organi"ations need to identify the changing needs and

reuirements of the services sector. /ith the freuent use of information technologist

and with the mounting pressure of inflation and competition, we find a change in the

hierarchy of needs.


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fig.8! =ousehold 4egment

&he high income group, middle income group, low income group, su#stance

level group and marginal income group have different hierarchy of need which

influence the level of their e'pectations.

Kender 4egment2 In the gender segments, we find male and female having different

needs and reuirements. &he #anking organi"ations are supposed to identify the level

e'pectations of #oth se'es.

-ig.:!

4ome of the women are housewives and therefore they have different need and

reuirements whereas some of them are working ladies having different needs and

reuirements.

7- Profession

In the profession segments, we find different categories of professions an

therefore we find a change in their needs and reuirements.

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fig.

&he technocrats, #ureaucrats, corporate e'ecutives, intellects, white and #lue

collar employees have different needs and reuirements and therefore the #anking

organi"ations should know their e'pectations.

8- Instit'tional se%tor

Organi"ations, institutions, industries, #usiness, or say, the large7si"ed

customers is an important market segment for the #anking organi"ation. In the

following figure.> we find different su#7segments in the category institutional sector.

&his the most profita#le segment of #anking organi"ation.

4ome of the organi"ations are known as cultural organi"ations, some of them

are not for profit making, some of them are charita#le and some of them are related

to trade and commerce. &he emerging trends in the social transformation process

determine the hierarchy of needs.

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fig.>! Institutional 4egment

Markets segmentation thus simplifies the task of understanding the

customers5prospects. &he #ank professional find it convenient to formulate and

innovate the marketing mi' of world class which simplify the process of e'celling

competition.

In the Indian perspective where we find agrarian economy contri#uting

su#stantially to the transformation of national economy, it is pertinent that the #anking

organi"ations assign due weightage to the rural sector of the economy where we find

tremendous opportunities.

&he ur#ani"ation is likely to gain the momentum and villages, outskirts of #ig

towns and cities are to #e developed on a priority #asis. *lmost all the organi"ations

are to get tremendous opportunities there. &he marketing resources if of innovative

nature would make the ways for capitali"ing on the same profita#ly.

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=ence this is found essential to know the changing needs and reuirements of

the different segments. &he launching of new products and services or an overriding

priority to the innovation process cannot #e meaningful unless the #anks succeed in

rating the e'act level of e'pectation of different segments.

Bases of Market ,eg&entation

In this topic we are discussing on what #ases #anks can segregate their customers .

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/hen we divide any class or a su#$ect, it is done on certain grounds. &he #ase

is created after considering the various fields and the characteristics of students, merit

and so on. 4imilarly marketing segmentation is done on certain consistency that e'ists

within the group.

Marketers use segmentation #ases, or varia#les, which are characteristics of

individuals, groups, or organi"ations, to divide total market into segments.

Markets can #e segmented using a single varia#le, such as age group, or

several varia#les, such as age group, gender, and education. *lthough it is less

precise, single7varia#le segmentation has the advantage of #eing simpler and easier to

use than multiple7varia#le segmentation. &he disadvantages of multiple segmentation

are that it is often harder to use than single7varia#le segmentation+ usea#le secondary

data are less likely to #e availa#le+ and as the num#er of segmentation #ases increases,

the si"e of individual segments decreases. ;evertheless, the current trend is toward

using more rather than fewer varia#les to segment most markets. Multiple7varia#le

segmentation is clearly more precise than single7varia#le segmentation.

4o in order to make sure that the product, offerings reach the right consumers

and customers it is necessary that we understand the #ase of segmentation.

Geogra*!i%

;ations

4tates

9egions

Cities

/orld

M74i"e

(ensity

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Climate

#e&ogra*!i%

*ge

-amily 4i"e

-amily life cycle

Kender income

Occupation

Education

9eligion

Keneration

;ationality

4ocial Class

Ps$%!ogra*!i%

Gife 4tyles

3ersonality

Lalues

Be!a+ioral

Occasions

Benefits

ser 4tatus

sage 9ate

Goyalty 4tatus

9eadiness 4tage

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*ttitude &oward Offerings

,tages for seg&entation

/hile segmenting, it is essential that the #ank are familiar with the different

stages to #e covered for right segmentation since this would simplify the task of

sensiti"ing the marketing efforts vis7J7vis would make the #usiness profita#le. ;ow

we are going through the different stages of segmentation.

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6- Cond'%ting t!e Resear%!

&he first stage in the segmentation process is to conduct research which

analyses the market to identify the group of customers within the overall market who

share needs and have certain #ehavioural properties or features in common which

distinguish them from groups of customers. &he research is done with help of

varia#les #ases! which helps to conduct the research efficiently. &he research would

answer to the uestions and so the #anks #ear the responsi#ility of intensifying the

research.

9- Identif$ t!e Profita4le ,eg&ent

Market research would help the #anks in knowing the segments containing the

most #uyers or the most profita#le #uyers. It is most important that the most

profita#le segment should not #e too large in si"e. &he concept of market

segmentation is eually applica#le to the #anking or the other service generating

organi"ation also. &he #anking organi"ation like =ong Fong #ank and the IndusInd

#ank have #een found treating each class in the same way as the manufacturing

organi"ation treating their products. If #anks are succeed in identifying the profita#le

segment, the task of #ank professionals would #e simplified considera#ly.

:- Esta4lis!ing t!e *osition of t!eir ser+i%e ; s%!e&es

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&he third stage in the market segmentation process is to esta#lish the position

of their products 5 services 5 schemes in the market relative to those of rival #anking

organi"ations. &he product position is found different in #oth categories of #anking

organi"ation pu#lic sector commercial #anks and the private #anks. It is important

that the competing #anking organi"ation assign due weightage to the positioning

strategy adopted #y the competitors.


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8- Ado*ting t!e Rifle5 s!ot A**roa%!

If the #anks fail in motivating the prospects, they may think in favour of the

rifle7 shot approach. &his approach is related to aim the target market in such a waythat even the untapped potential customers are motivated. =ere #anks find innovating

the marketing resources essential and the innovation process should keep in mind the

reason which resulted into the failure of their efforts taken earlier.

-rom the a#ove stages we found that, the first stage occupying a place

of outstanding significant since it is the uality of #anks research determines the

magnitude of #anks success. It is due mainly to the fact that the mast profita#le

segment is found of the smallest si"e. &he profita#le segment is to #e tapped

optimally so that the marketing resources or inputs used in the process are one

hundred7 percentage productive. It is in this topic that we find a study of the different

stages of segmentation essentials.

Criteria for an Effe%ti+e ,eg&entation

In processing the marketing activities , of course there are a num#er of steps

and stages #ut of all, find segmentation significant since right segmentation simplifies

the task #anks and makes the marketing efforts sensitive. &his gravitates our attention

on effective segmentation. *n important task #efore the #anks is to have effective

segmentation which makes ways for an optimal utili"ation of the marketing resources.

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It is against this #ackground that we find effective segmentation to #e discussed in

detail. Fotler says that any worthwhile effort for market segmentation must satisfy the

following four conditions 2

Measura#ility 27

By Measura#ility in the market segmentation, the degree to which the si"e and

purchasing power of the segments can #e measured. ;o dou#t in it that there

are certain segmentation varia#les which cant help us in the measurement

process. In a true sense, this refers to the e'tent to which the si"e and

purchasing power of the segment can #e fair to a point that is measured. If

#anks fail in measuring the si"e and purchasing power of a segment, it is

natural that #anks fail to assess the #usiness potentials of that segment.

su#stantiality 2

&his is refers to the degree to which the segment are large and profita#le. It is

essential that a segment #elongs to the largest homogeneous group. If the si"eis very small even #anks find it full of potentials, the market would hardly #e

profita#le. Banks can’t negate that su#stantiality is a relative term. In the

#anking #usiness we find some the small segments with tremendous

potentials. &hus we can’t say that su#stantiality would #e an essential criterion

since #anks can develop mi' or a package even for the small segment and

make the #usiness profita#le.

*ccesssi#ility 2

&his is related to the degree to which the segments can effectively or smoothly

#e reached and served of cource, #anks find it essential consideration for

effective segmentation since even if market is profita#le and #ank can reach to

that market smoothly, the #ank professionals are found helpless to capitali"e

on the opportunities.

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*ctiona#ility 2

&his is meant the degree to which effective programmes can #e formulated for

attracting and serving the customers. =ence #anks emphasis on the potentials

of customers in uick e'pendition of the formulation process. If the #anking

organi"ation faces the pro#lem of under staffing, the actiona#ility would #e

affected adversely.

&his a#ove conditions needs to #e formulating effectively in which

marketing resources and efforts are found more sensitive.

Market seg&entation for Mo4ile Banking

It is a#solutely true that mo#ile #anking is e'perienced different from one market

to another. It is often the source of a lot of confusion when different people discuss

mo#ile #anking from different conte'ts. Before we discuss mo#ile #anking it is

therefore important to first define the markets that one target when deploying mo#ile

#anking.

&he most o#vious first segmentation of the market for mo#ile #anking is to look at

those consumers with a strong, e'isting relationship with #anks, and those that do not

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have a relationship with a #ank. &his segmentation should range from some7one

without any #anking relationship some7one that does not have a #ank7account and

also never had one!, to on the e'treme right! a sophisticated user of #anking services.

&his would typically #e some7one with a relationship with more than one #ank, have

multiple #ank accounts and5or credit cards.!. *nother dimension should #e an

indication of the degree in which a consumer is connected to other consumers. 4ome

consumers #ecause of their work or role in society have a #igger need to interact with

a more diverse group of consumers, others are much more localised in their

interaction.

In looking at the different segmentations, one would #e a#le to identify

an individual that are typically employed in a low income position or survives off

grants, pensions or money sent from family working in the city or a#road. Gife’s

routine is predicta#le for this individual with activities organised around the work and

family. &he rural citi"en would typically live in a low cost a#ode. Credit worthiness is

low with access to e'pensive micro lending as a source of lending only. *ll

transactions are in cash and almost no savings e'ist. &his is an individual that either

living in a village in some rural area or in slums in or around cities. &hese people are

the masses that turn the economy with their la#our. &heir need for #anking services is

limited to small savings, money remittance and some electronic payments. &hey

usually get access to these financial services in a very e'pensive way, often with high

risks as all of their transactions are in cash. &hey are often referred to as the #ottom of

the pyramid, #ut yet they are active in the economy and represent a large portion of

the population in many countries and can #e reached #y mo#ile #anking with the right

product or service.

*nother segment would consist of individuals that are much more affluent.

&hey are the people that always have the latest gadgets and are more e'pansive in

their e'posure to financial products. &hey typically have the latest phones, have more

than one #ank relationship and travel e'tensively for work and pleasure. &heir assets

include stocks and #onds and they use the Internet e'tensively to transact

electronically. &hey are often aware of transactional risks associated with card

transactions and the Internet and are often uncomforta#le a#out their e'posure to

fraudulent activities. In addition to providing more control and improved security,

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mo#ile #anking also delivers an alternative mechanism for the 3ower ser to pay.

&ransactions not usually availa#le can now #e performed. 4ome of the transactions

that the 3ower ser reuires and now #ecomes availa#le are person to person

payments, pro'imity payments, enhanced security for “card7not7present% transactions

to name a few. *ll of these features are availa#le in some format or another.

It is clear that different market segments would reuire vastly different mo#ile

#anking offerings.

Case st'd$

• Introd'%tion

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Barclays is a glo#al #ank. It provides a range of financial services in :<

countries. Barclays provides retail #anking services to customers, whether they are

individuals or #usinesses. It offers a #road range of financial products and services

including current accounts, savings accounts and general insurance.

/ithin the F, Barclays communications are designed to help customers @Take One

Small Step’ to managing their money #etter every day. (ifferent kinds of customers

represent distinct markets for Barclays. &he market for personal #anking services is

very competitive. 3ersonal customers have a choice of #anks on the high street or on

the we# to assist them in managing their finances. -or e'ample, they can have their

salaries paid into accounts, pay #ills through the #ank or save money to

gain interest on their savings. &here is also a competitive market for #usiness #anking

services. Businesses reuire different services such as credit management, payments

for suppliers or loans and overdrafts to help them to survive and grow. -or e'ample,

an e'panding #usiness may need a mortgage to #uy a new #uilding.

Market segments

Each market is capa#le of #eing further su#7divided into segments. * market

segment is a part of a whole customer group that shares particular characteristics.

&hese include such factors as age, life stages, geography or occupation. /ithin the

market of personal #anking, the segments could include categories such as students,

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graduates, @new to work’, mature, and families. By identifying different market

segments, organi"ations can ensure they are providing products or services to meet the

needs of these customers.

In addition to this, appropriate promotional techniues can #e used to reach

the people in the separate segments. &hrough segmentation, Barclays has #een a#le to

devise appropriate #anking offers for customers in different segments. &his approach

is helping Barclays to improve its market share of the student accounts market.

Barclays #elieves students constitute a very important market segment for the

#usiness. 4tudents may #e choosing a #ank for the first time and Barclays hopes to

retain these customers. By focusing on the specific needs of this segment, Barclays

hopes to attract more student customers and keep them in the long term. sing market

research has ena#led Barclays to identify the right product offer that will meet their

needs.

&he case study shows how market research ena#led Barclays to improve its

student account offer.

• P'r*ose of &arket resear%!

&he purpose of market research is to gather data on customers and potential

customers. &he collected data aids #usiness decision making. &his therefore reduces

the risks involved in making these decisions. In order to create a

product proposition that would attract new student accounts, Barclays needed to

understand fully the needs of this target market.

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-irstly, students provide an opportunity for developing a long7term

relationship. *s the student market segment increases each year in 4eptem#er5Octo#er

as the university term starts, Barclays has an annual opportunity to target new student

customers who need an account and who might not yet have chosen a #ank.

4econdly, the use of this data highlighted that in the years after opening their

accounts, Barclays was a#le to esta#lish a valua#le long term relationship with

students. &his meant that students could now #e seen as an e'tremely important

market segment, and attracting new student customers #ecame a significant

opportunity.

Barclays designed a programme of market research. &he purpose of this was to

esta#lish what students really needed from a #ank. In this way it

could offer appropriate products and services which would add value to students.

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• T$*es of &arket resear%!

Barclays #egan a process that involved #oth primary and secondary research.

Pri&ar$ resear%!

3rimary research involves finding out new information. It finds the answers to

specific uestions for a particular purpose. &hese enuiries may take the form of

direct uestioning. -or e'ample, it may include face7to7face surveys, postal or online

uestionnaires, telephone interviews or focus groups. &his type of direct contact with

people is valua#le as it gives specific feed#ack to the uestions asked.. *lthough

primary research can #e e'pensive and time7consuming, the up7to7date and relevant

data collected can give organisations a competitive advantage

-or e'ample, Barclays found from the uestionnaire that A) of students surveyed

held a savings account and 61 an investment savings account I4*!.

,e%ondar$ resear%!

4econdary research focuses on e'isting information. It uses pu#lished data that

previous research has already discovered. &his covers a wide range of materials, such

as2

• market research reports

• sales figures

• competitor marketing literature

• Kovernment pu#lications, e.g. national statistics.

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4econdary research may #e uicker to carry out #ut may give less specific outcomes

for the topic in uestion. &his part of Barclays research revealed that student accounts

in 1DD amounted to D.8 million out of a total market of :.8 million new accounts.

• Resear%! findings

;umeric data gives a factual #asis for planning 7 a snapshot of a situation. On

the other hand, ualitative information can find out the things that really matter to

consumers.

Resear%! o't%o&es

• 4tudents relied heavily on different forms of credit. &hese included an easily

managea#le #ank overdraft to finance their time at university

• 4tudents wanted and often needed to own high7tech gadgets and electrical

goods, such as laptops

• 4tudents wanted to have separate accounts to manage their student #orrowing

and spending

• *ny incentives offered would not alone motivate students to choose that

product. &hey were e'pected as part of any deal.

&his insight was a real help to Barclays when considering the most

attractive proposition for students. Its o#$ectives were to attract new student accounts.

It also wanted to retain students as customers for life in a profita#le relationship that

met their financial needs.

Barclays could now start to put together an offer that would em#race the main

concerns of the target market.

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• I&*le&entation and e+al'ation

In 1DD, Barclays set up a working group to oversee the setting up of the new

student proposition. It used the insight from the research to esta#lish the key features

and #enefits of the student account. &hese features are valid for the life of students’

studies2

• ;o monthly fee to keep costs down for students

• *n interest7free overdraft facility of up to N1,DDD from starting the account.

3reviously this started at N:DD in the first year and increased through the years

of study. &his e'tension helps students manage their finances.

• Mo#ile #anking and a network of local #ranches for ease of access to

accounts.

=aving developed a student #anking proposition that Barclays felt confident

would appeal, it #egan to communicate the message and promote the new student

offer. *n innovative marketing plan was launched which involved2

• a word7of7mouth campaign through @)DD voices’ which encouraged students

to share their e'periences of managing money whilst at college or university

• 3romotional literature availa#le in #ranches nationwide. &his proved useful

information for Barclays colleagues as well as for students and their parents to

take away

• online advertising through #arclays.co.uk

•

(irect mail to prospective students through the summer #efore going touniversity.

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• Con%l'sion

&he Barclays student account proposition shows how it is crucial for a

#usiness to listen to its market. &o do this effectively means targeting specific market

segments to discover their needs.

Barclays’ new student account proposition was an @insight7led’ approach.

sing carefully constructed and phased market research, the #ank was a#le to

gain an overall insight into the thinking of students. In the early stages of the research,

it was discovered that the student segment provided an opportunity to develop a long7

term relationship. It was found that students were not necessarily @here today, gone

tomorrow’. If the #ank made a valua#le and relevant offer, students were likely to

remain lifelong customers.

Barclays’ initial target was to increase the overall num#er of student accounts

#y 1:. &his target was e'ceeded with an increase of 68. *s a result, Barclays

increased its market share of the student market, moving from third to second among

the top four market leaders.

&he process of meeting customer needs is an ongoing one. Barclays has a

continuing plan for re7evaluating its student proposition to ensure it remains relevant

to the target audience.

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>I,IT REPORT

I had visited to ICICI #ank and =(-C Bank to gather the information a#out

my pro$ect Market 4egmentation. I had visited ICICI #ank at and =(-C #ank. I asked

many uestions which will help me to complete my pro$ect. I met Ms.9oshani 4alion,

#ranch manager of ICICI #ank at dom#ivali and Mr. 4ingh #ranch manager of =(-C

#ank at kalyan #ranch.

=(-C Bank is a young and dynamic #ank, with a youthful and enthusiastic

team determined to accomplish the vision of #ecoming a world7class Indian #ank.

=(-C Bank?s mission is to #e a /orld7Class Indian Bank. &he o#$ective is to #uild

sound customer franchises across distinct #usinesses so as to #e the preferred provider

of #anking services for target retail and wholesale customer segments, and to achieve

healthy growth in profita#ility, consistent with the #ank?s risk appetite.

=(-C Bank offers a wide range of commercial and transactional #anking

services and treasury products to wholesale and retail customers. &he #ank has three

key #usiness segments2 /holesale Banking 4ervices, &reasury and 9etail Banking

4ervices.

India’s second largest #ank ICICI #ank,


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ICICI #ank and =(-C #ank are now trying to target the rural customers .they

started introducing products and services for the rural people.

&his two #anks really doing good $o# #y segmenting the market. I am very

thankful to the managers who provided such an important data a#out Market

4egmentation Banks.

market segmentation in banking sector

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