ASSESSING THE IMPLEMENTATION OF MARKET-SEGMENTATION IN RETAIL FINANCIAL SERVICES

Market segmentation is widely regarded as a panacea for a variety of m arketing ailments. Yet research in the financial services market highl ights a number of significant barriers to the implementation of segmen tation schemes. These barriers range from weaknesses in customer data and inappropriate organisational structure, to lack of marketing orien tation and difficulties in obtaining a fit within the existing distrib ution structure. While the marketing literature acknowledges that thes e difficulties exist, there has been little formal analysis to capture the characteristics of these barriers. This problem is compounded by the considerable size and diversity of the sector which make it diffic ult to generalise about the implementation problems. This means that t he extent of any barriers may vary in different areas of the financial services market and even in different organisations and that this var iation may feasibly translate into different levels of segmentation us age. This research uses four short financial services case studies to examine the application of segmentation and consider the implementatio n barriers. Although the case studies cover a range of financial servi ces companies, the analysis focuses on the provision of charge/credit cards by these organisations. The growth rate and increasing importanc e of the charge/credit card business make this a particularly pertinen t area to analyse and allow a comparison with retail banking services more generally. The findings support the notion that a range of barrie rs to segmentation exists and shows how the importance of these barrie rs varies in different organisations.