| dc.description.abstract | Strategic management seeks to coordinate and integrate the activities of the various
functional areas of a business in order to achieve long-term organizational objectives.
Segmentation is central to strategy because different customer groups imply the need
for different marketing mixes. The technique of segmenting a market also reveals
profit and strategic opportunities for new competitors to challenge established market
leaders. Several approaches to market segmentation are useful to locate and describe
target segments and influence a company’s strategy. Knowing consumers’ level of
interest in alternative benefits is important in shaping, and perhaps changing, a
company’s product portfolio. Well defined market segmentation strategy enables
better products and services for the customer and will win you a reputation of being
the 'customer's marketer. As competition in the banking markets intensifies, financial
service institutions have increasingly adopted a strategy based on sophisticated forms
of segmentation.
The objective of the study was to investigate how commercial banks in Kenya used
market segmentation as a strategic management tool. The researcher adopted a
descriptive cross-sectional survey and focused on all the 43 commercial banks in
Kenya. The study collected primary data by use of self-administered questionnaire.
Quantitative data collected was analyzed by the use of descriptive statistics using
SPSS and presented through percentages, means, standard deviations and frequencies.
The information was displayed by use of bar charts, graphs and pie charts and in
prose-form.
The study concludes that banks employ geographic, demographic, psychographic and
behavioral segmentations as their strategic management tool. The study also
recommends that it is of significant importance that banks should focus on
consumers’ changing needs and preferences at different stages during their life in
order to not fail to benefit from their customers. | en |
