Managers' perceptions of the importance of market segmentation strategy in performance enhancement of commercial banks in Kenya
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To be competitive; financial institutions, including banks of all sizes, utilize marketing planning tools and teclmiques. To this end, the concept of service differentiation and market segmentation has been applied in varying degrees by commercial banks. Although segmentation decisions are critical for achieving differential advantage in an increasingly competitive marketplace, the empirical investigation of how segmentation decisions are actually conducted by banks particularly in a developing country like Kenya have not been carried out. The study sought to establish managers' perceptions of market segmentation used by Kenyan Commercial Banks to enhance their performance, and to determine the market segmentation strategies used by Commercial Banks in Kenya to enhance their performance. The population of study consisted of all the 44 commercial banks. The study used primary data which was obtained using semi-structured questionnaire which was administered using drop and pick method. The sample size of the study was 88 respondents. The data was analyzed using descriptive statistics.The research concludes that the demographics factor is the most significant factor that determines the market segmentation strategies adopted by banks. Geographic, behavioral and psychographic are also determinant factors. The researcher further concludes that the strategic decisions in product development are the most affected by market segmentation. The study concludes that, the success/failure of bank's overall brand image is one area in banking industry that is most influenced by market segmentation. The study recommends that for the banks to gain a competitive edge they should enhance their market segmentation strategies. The research recommends that the demographics factor is the most significant factor that should be used when designing the market segmentation strategies to be adopted by banks. The researcher further recommends that for better strategic decisions in product development banks should enhance the performance of their market segmentation strategies.