Assessment of Market Segmentation Practice in the Private Banking Sector of Ethiopia
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Date
2011
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Addis Ababa University
Abstract
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.
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Keywords
Market Segmentation Practice