IMPLEMENTING MARKET-SEGMENTATION STRATEGIES IN UK PERSONAL FINANCIAL SERVICES - PROBLEMS AND PROGRESS

Most academic research into segmentation in the financial services ind ustry has focused on alternative analytical approaches and base variab les; relatively little attention has been paid to implementation issue s, despite management's concerns about the practicality and usefulness of segmentation. Some significant barriers to effective implementatio n of segmentation have been encountered by major financial services fi rms. This paper reviews these barriers, and finds that weaknesses in c ustomer data, and the importance of a good fit with the company's dist ribution channels, can limit the range of segmentation approaches that a company can adopt, while the organisational context, structure and strategic positioning can fail to support effective segmentation. The paper also considers some of the newer entrants to the financial servi ces industry, and finds that they are making progress in all of these areas.