Customer behaviour and market segmentation

The initial studies of bank customer behaviour started with the banks’ interest in the services they offered, and the customers’ attitudes, beliefs and perceptions about those services. The questions employed in the market research tests asked six basic questions, namely: who is the customer; what does the market buy; when does the market buy; who is involved in the buying; why does the customer buy; how does the market buy? The information gained has been used to improve the design of services, relationships and bank communications. The studies highlighted the importance of factors such as the bank’s image and identified the existence of market segments. Much of the current research efforts concentrate on segmenting the market into customer groups with different needs, buying styles and responses to promotions. Strategies are then developed to appeal to the identified segments.