market segmentation on banking sector in sri lanka

1. MARKET SEGMENTATION
ON BANKING SECTOR IN
SRI LANKA

2. What is market segmentation?
Market segmentation is a process of
viewing a heterogeneous market as
consisting of a number of smaller and
more homogeneous parts, called
segments.
In its ultimate form, market
segmentation results in each customer
being served differently.

3. How a Banking Sector activities
looks, before segmentation

4. How Banking Sector activities
after Segmentation

5. Segmenting Consumer Market
Geographic
segmentation
Psychographic
segmentation
Demographic
segmentation
Behavioral
segmentation

6. How many criteria are used
to segment a market
Uni-variate segmentation, that uses
one criterion at a time
E.g., by gender, by social class, by income,
by age
Multi- variate segmentation, that
makes a combine use of criteria
E.g., geo-demographics, psychographics

7. Geography as a basis for
segmentation
Historically geography has been a useful
segmentation basis for banks( due to
large number of customers) unable to
serve an entire area.
Regional segmentation
-countries, cities, regions in a city
Size of population
Density segmentation
-There are banks located in urban,
suburban, rural

8. Demographics as a basis
for segmentation
Demographics offer a straightforward basis
for segmentation because they are based on
easy to access information and produce
classifications which are;
Straightforward
Easily interpretable
Measurable
Very useful from a marketing viewpoint

9. Gender
Usually men and women were the target
segment of Banking institutions, .
Recent societal developments (e.g. the
demise of the nuclear family, the career-
seeking woman) have made women more
knowledgeable of banking services.
However, gender based segmentation is
always useful for Banking services
marketers in order to promote their
banking activities.

10. Examples
•Peoples Bank introduce Wanitha
Wasana for Women
•NSB introduce Sthree account for
women
•BOC introduce Kantha Ran Ginuma for
women

11. Age
Individuals with similar age may
exhibit similar buying behavior and
may have similar needs for financial
services.
School children
Peoples Bank-Sisu Udana account
BOC Bank -Ran Kekulu account
NSB Bank -Hapan account
Seylan Bank-Tikiri account

12. University Students
They are often in short of cash. So,
•They may need loans(EX. Educational loans
with less interest ,loans for buying laptops)
•Overdraft facilities, Student accounts.
University students tend to form strong brand
loyalty, which can last for a life time.
Banking institutions targeting university
students want to capitalize on their future
earning power.

13. First time workers and adults
Their purchasing power
increases and their needs for
banking services evolve
•They may require less
overdraft
•They may be able to get more
credit.
•Demand for long-Term
residential loans may increase.

14. Aging population
Their needs for banking services
change due to changes in their income
and their lifestyle.
Income usually falls after retirement so
banking institutions introduce savings
accounts with high interest
eg ; peoples
bank

15. Pension and retirement plan
eg; BOC bank :BOC
Abhimana
Discretionary time increases they
may be open to travel loans

16. Psychographics as a basis for
segmentation
 Psychographics segmentation divide buyers
in to different groups based on social class,
lifestyle or personality traits .
 Lower social classes tend to favor
investments that can be easily turn into cash
and favor bank accounts that are
accompanied by some tangible evidence
 Higher social classes tend to have a savings
aspirations .

17. Behavioral segmentation
Behavioral segmentation divides buyers into
groups based on their knowledge ,attitudes
,uses or responses to a product
Benefit sought
Banking institutions Grouping buyers
according to different benefits that they seek
from a service.
Ex: Banks introduce high interest fixed
deposits and low interest loans to promote
their lending activities.

18. Loyalty status
The market can also be
segmented by customer loyalty.
Ex: Peoples bank and BOC bank
has more trustworthiness than
private banks according to their
Fitch ratings.