Master thesis market segmentation

items Master thesis in Business and Informatics Market segmentation is becoming very familiar and essential to every marketer in the process of designing.
Table of contents

In the area of financial services alone, Harrison pointed out that ; not all services are intangible and man financial services contain tangible elements. In addition to intangibility, Zeithaml, Parasuraman, and Berry put forward inseparability concept as the second distinctive characteristics between goods and services. They pointed out that in most of the services production and consumption process took place simultaneously in an inseparable manner.

To support their ideas about inseparability concept they cited several authors like Regan , Carmen and Langeard and Upah They asserted that as Regan told goods are first produced, then sold and then consumed but services are first sold, then produced and consumed simultaneously. According to Harrison , for financial services, characteristics of inseparability may only apply to a few financial products.

As a third distinctive concept between goods and services, Zeithaml, Parasuraman, and Berry analyzed heterogeneity concept and related studies to this concept. They defined heterogeneity as variability and claimed that heterogeneity can be a problem for labor intensive services since the quality of a service can vary from producer to producer, from customer to customer, and from day to day.

They added that; as Langeard et al. Mckechnie added 2 more distinctive characteristics for services sector which are specific to financial services; fiduciary responsibility and two-way information flows. This section will both review the literature for market segmentation on general basis and also deal with the studies presented under the segmentation in financial services subject.

Goal of the segmentation was defined as solving the conflict between the intentions to satisfy customer needs as individually as possible but also to allocate marketing resources as economically as possible Wind, Within the literature, authors proposed variety of different criteria that should be met in order to talk about market segmentation.

These different approaches bunched in 6 criteria by Alfansi and Sargeant after reviewing several studies that had been presented about market segmentation Frank et al. These 6 criteria are identifiability, substantiality, accessibility, stability, responsiveness; and actionability. Another popular topic that has been discussed by the scholars is the basis of segmentation.

Alot of reseach has been made on this topic and alot of variables have put forward by academicians. Alfansi and Sargeant followed Frank et al. Frank et al. In observable general bases; variables such as gender Dickens and Chappell, ; Frank, , position in the family life cycle Wells and Gubar, ; Lansing and Kish, ; Reading, ; Jonak, , culture Joy et al.

In the financial service context, number of studies had found differences in purchase behavior between different demographics Stafford, ; Bobinski and Assar, Alfansi and Sargeant told that despite the criticisms about demographics, this concept is a popular basis for segmentation because of 2 reasons; first of all, there is an easy conjunction possibility with demographic variables with the other variables and secondly, demographic variables can easily be obtained.

Among financial services sector, when banking sector is the issue; according to Machauer and Sebastian , customer segmentation is largely limited to categories of corporate and retail customers. Within these categories; corporate customers are distinguished by their geographic range of activities regional versus international or by their sector that they are involved and being affected. In personal retail banking, demographic criteria such as profession, age, income or wealth are often being preferred for basis of segmentation Meidan, ; Harrison, In observable — product-specific bases, variables such as user status Khermouch, ; Spotts and Mahoney, , usage rate Twedt, ; Goldsmith et al.


  • genocide in rwanda essay!
  • Erasmus University Thesis Repository: Marketing, New Media and Consumer Segmentation.
  • university of alabama admissions essay.
  • critical thinking includes which of the following questions.
  • hunting research paper.
  • proquest digital dissertations database.
  • Mobile customer segmentation based on smartphone measurement;

Most of the studies confirmed the utility of this segmentation variable when marketing the financial services. Jain et al. In unobservable — general bases, variables such as personality Evans ; Koponen ; Massy et al. In Unobservable product-specific bases, variables such as as product-specific psychographics Dhalla and Mahatoo, , product benefits Haley, ; Miller and Granzin, ; Brown, , brand attitudes Yankelovich, ; Frank et al. Of these, the importance of benefit segmentation is perhaps most well established in the literature Tynan and Drayton, ; Loker and Perdue, ; McDougall and Levesque, ; Minhas and Jacobs, and benefit segmentation has proved its usefulness in services markets Calantone and Sawyer, ; Soutar and McNeil, Benefit segmentation has also been studied in financial services context, for instance, McDougall and Levesque applied benefit segmentation in their study to retail banking and performed a cluster analysis.

They identified two customer segments: a performance segment and a convenience segment. In this part main characteristics of financial services will be presented and then segmentation in financial services will be taken into account. Financial services deals with money management. Most important sector which is providing financial service is the banking sector.


  • 1. Introduction!
  • simple english essay for upsr.
  • edexcel a level coursework!
  • Fruit and veg business plan template.
  • Master Thesis Market Segmentation - Market Segmentation and 4 Ps.
  • cosmetic dentistry - research paper.

In addition to banking sector activities related to insurance, investment, leasing, factoring and etc… are also located in financial services concept. As it was mentioned in literature review section of the study; according to Harrison financial services can be considered as a part of services sector and conveys similar characteristics with services sector. In addition to the 4 basic differences between goods and services which are intangibility, inseparability, heterogeneity, and perishability, Mckechnie mentioned about 2 more characteristics which are specific to financial services; fiduciary responsibility and two-way information flows.

About inseparability concept, it can be told that; since the basic premise of this concept is service is produced and consumed simultaneously in services sector, when financial transaction like saving account basically putting money on a bank and taking the money with an interest paid after a certain maturity is considered, the premise of inseparability concept vanishes Mcgoldric and Greenland, Since most of the customers chose to interact with the tellers in the branches, it can be told that financial services are people-based and this characteristic increases the variation of the service standard in a financial institution.

But also when the technology that is being used in financial services sector is taken into account, it can be told that financial services are also equipment-based and this characteristic decreases the variation of the service standard and provides more standardized service quality through different channels like ATM, online branch and etc… Another concept that should be analyzed is perishability. Although there are several transactions occurred in financial system which must be considered as perishable, there are also examples which show that not all of the financial services are perishable.

In addition to these 4 common characteristics with services, financial services have 2 more characteristics according to McKechnie and Harrison ; fiduciary responsibility and two-way information flows. Also when such processes like visiting branch, using ATMs and etc… are taken into account, it can be asserted that financial services transactions take place in a two-way form.

Related eJournals

Institutions can use this factor on their advantage by collection information, data and feedbacks through these two-way interactions. As Harrison implied; to sustain systemic stability, to maintain the safety and soundness of financial institutions and to protect the consumer regulation is applied to financial services. Secondly, when the prices of products and services are compared, it can be told that pricing in financial services is more complex than regular services sector.

Ehrlich and Fanelli considered financial services as both goods and services. When separability many financial products can be separated from their consumption , lack of perishability Unlike a dinner reservation, a credit card will be there when the customer wants one and mass production some financial services like college savings accounts can be mass-produced and mass-marketed are taken into account, financial services can be considered as goods. At the same time, when low cost of entry There is little or no cost to manufacture to create a new financial product , speed to market after structuring the financial services, they can be distributed as soon as the ink is dry on the offering plan and lack of exclusivity financial services can be duplicated easily production are taken into account, financial services can be considered as services.

Since there are several unique characteristics that financial services involve, marketing of financial services is a unique and highly specialized branch of marketing and involves unique characteristics. For instance, constructing the marketing mix is much harder in financial services marketing compared other forms of goods and services marketing.

In consumer goods marketing, a marketer can easily target consumers and position the brand with the confidence that all samples of their products are manufactured to be the same. However in financial services marketing, a marketer cannot assume the same and since the experience that customers have differ from employee to employee and from day to day Ehrlich and Fanelli, Marketers may face several unique problems in positioning and promoting financial services offerings because these offerings are intangible Kanuk and Schiffman, Furthermore, because of the specialization and customization in the sector, in order to meet the needs of customers, financial services marketing started to be more complex and challenging, comparing to other forms of goods and services marketing.

In addition to these unique characteristics Ehrlich and Fanelli put forward some more key aspects that financial services marketing involves as the followings:.

From all of the key aspects above most of the contemporary financial services marketers are dealing with the increasing competition and need of customization in the financial services industry. Thus, clustering customers in other words segmentation have been a critical issue among financial services market thinkers and doers. Market segmentation can be defined as a process of viewing a heterogeneous market as consisting of a number of smaller and more homogeneous parts, called segments Harrison, Utopia of segmentation is serving each customer differently which can be also considered as individual marketing.

Financial services apply segmentation process for the following benefits of segmentation process Harrison, :.

McDonald's market segmentation strategy

In addition to these benefits, segmentation can also provide to foresee the changes in the buying behavior of target market and to respond it with new promotions and offerings. Also as a result of segmentation, segments that are small in number but have large potential i.

Market segmentation in hospitality research: no longer a sequential process

There are variables that shape buying decisions of customers in each sector. These variables are; individual differences, consumer resources, knowledge, attitudes, motivation, personality, learning, values and lifestyle, environmental influences, culture, social class, reference groups, family and etc… Schiffman and Kanuk, These variables are important since the aim of segmentation is to group individuals into segments accordingly to their differences and similarities in product needs Harrison, Wind suggested some preferred bases for segmentation like benefits sought, needs and product usage patterns.

Bases of segmentation can be analyzed 5 major categories as; geographic, demographic, socio economic, geodemographic and psychographic Harrison, Most of the marketers believe that they say more about lifestyle than traditional demographics Whitehead, Segmentation Strategies for Financial Services Marketing. Segmentation varies from one financial institution to another one because of different strategies. According to Abell and Kotler there are 5 different strategies for the selecting and targeting the market segments;.

In this section, definition, general characteristics, bases and strategies of segmentation in financial services were analyzed. In personal retail banking, demographic criteria such as profession, age, income or wealth are often being preferred for basis of segmentation. Next section of the study will deal with personal retail banking category and its most precious segment i.

Private Banking which is obtained after a segmentation that is based on personal wealth. Private banking constitutes the upper side of the retail banking when a value based segmentation is taken into account. It can be defined as high quality of financial services that are offered to wealthy clients. Type of services provided by private banking departments vary from bank to bank, nation to nation and customer to customer.

Most popular type of services providers by private bakers are; portfolio management, investment advisory, real estate advisory, tax advice, art consultancy and etc…. As it is told before; private banking clients are already clustered and chosen customers from the retail clients of the banks. In most cases private banking clients are segmented by geography, demographics, wealth, income, asset class holdings and preferences, domicile, and so on… Maude and Molyneux, In addition to these factors; risk preferences of clients and their professionalism, in other words, sophistication level of their needs are also taken account as bases for re-segmentation Molyneux and Omarini, They proposed a combination of segmentation approach by taking into account both these factors and other factors, and presented a segmentation strategy based on a combination of factors including;.

When re-segmentation is the issue there are infinite numbers of variables that can be applied on segmentation process. Variables like past purchase behaviors about investment products, type of needs and lifestyle can be evaluated as efficient variables for this re-segmentation. Past purchase behaviors about investment products is important because this determines the risk appetite of the private banking clients and provide valuable information to the private banker in order to contribute the product tailoring process for clients with similar risk appetites.

Type of needs can also be considered as an important variable for private banking re-segmentation because grouping clients with the similar needs provide advantage in managing these clients and thus, efficiency and customer satisfaction rises. Finally, since private bankers are aiming to provide exclusive and premium services to their customers they should cluster them according to their lifestyles and construct their marketing strategies like promotions, service channels, pricing and etc… by taking into account their lifestyles.

Paper examined the main characteristics and key aspects of services marketing, financial services marketing, segmentation in financial services marketing, private banking and re-segmentation in private banking. Services marketing were handled by analyzing the differences of services marketing and goods marketing.

Study also pointed out that; when financial services are the issue, some more unique characteristics like fiduciary responsibility, two-way information flows, extensive regulation and product complexity should also be considered as key aspects of financial services which provide discrimination between financial services and other form of products and services sectors. Study also examined the segmentation concept both in broader perspective and special for financial services sector.

Recommend to a friend

While dealing with segmentation concept; benefits for segmentation, bases for segmentation and segmentation strategies were presented. From infinite number of segmentation variables; 5 of them evaluated as major bases for segmentation which are geographic, demographic, socio economic, geodemographic and psychographic variables. Also from different segmentation approaches, study took into account such strategies like single segment concentration, selective specialisation, product specialisation, market specialisation and full market coverage.

Finally study analyzed the private banking sector as the most precious segment of banking industry. After observing main characteristics of the sector it was asserted that although private banking is consisting of clients that are already segmented, for a better quality of service and customization on more individual basis, a re-segmentation process is needed.

While performing this re-segmentation process multi-segmentation approach should be applied. Since variables that should be used in re-segmentation may vary from nation to nation, variables like; past-purchase behaviors especially for investment products , level of sophistication regarding their needs and lifestyle were presented as main suitable re-segmentation variables in order to increase client satisfaction, service quality and bank efficiency. Author: Z. Abell, D.

Segmentation in Financial Services Marketing

Defining the business: The starting point of strategic planning. Alfansi, L. Allt, B. Baker, M. Bartels, R. Bateson, J. Bessom, R. Journal of Retailing , Bobinski, G. Brown, J.