Assessment of Market Segmentation Practice in the Private Banking Sector of Ethiopia

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Addis Ababa University


Amid of the recent economical growth, many private local financial institutions are increasingly joining the sector with a high encouragement from the government side as its means of consolidating the market economy. Because of these conducive factor coupled with increased people's awareness of banks importance, many private banks are becoming in to being to use the opportunity in the sector. To design, a winning marketing strategy the marketing manager first decide who it will serve (target market) and then should answer how can we serve these customers best (value proposition). It does this by dividing the market in to segments of customers and selecting which segments it will go after. This is so, because marketing mangers know that they cannot retain their entire customer loyal in a long-term. By trying to serve all customers, they may not serve any customer well. Therefore, this paper is aimed at assessing the market segmentation practices in the private banking sector of Ethiopia and its impact on Cl1.stomer satisfaction. For the successful accomplishment of this paper's objective a survey method of research is used. Thus five private banks are selected and questionnaires were designed for each of banks head quarter marketing managers and further five branch managers are surveyed from each bank to be a total of 25 branches to be covered under the study. From the investigation a large majorities which account for 60%did not segment the market and appeal to all customers. The remaining 20% of them uses language and geography as bases for segmenting the market. And another 20%of them use language, occupation and geography as variables to divide up the market. It would be helpful to segment the market for the banks to satisfy/ delight their customers and further using multiple variables should be used in combination to deliver superior-customer-value services.



Market Segmentation Practice