Jan 6, 2014 ... Islamic banking in Indonesia by Adiwarman, based on qualitative research three
clusters with different ... I go to my doctor as soon as I see any ...
Proceedings of 9th International Business and Social Science Research Conference 6 - 8 January, 2014, Novotel World Trade Centre, Dubai, UAE, ISBN: 978-1-922069-41-2
Retail Banking Customer’s Market Segmentation Based on Psychological Factors: Case Study in Islamic Republic of Iran: Bank Mellat Hajar Hakimi Increased competition in the banking industry today, the banking industry has followed a focused strategy. The first step toward developing such strategies is market segmentation. Banks According to their work environment chose different metrics for segmentation. The aim of this study is to identify the best factors for segmenting retail banking markets and identifying groups of customers that have the same response to a marketing program. For data analysis, factor analysis, cluster analysis and Bartlett's test were used. Factor analysis showed among the 56 questions about various aspects of life style, 23 questions, covering all aspects and lead to the identification of seven clusters based on psychological characteristics. Diversityoriented, authoritarian, Independence-oriented, autocrats, family-oriented, fashion-oriented and satisfaction-oriented, are seven clusters identified in this study. Then each cluster was studied about their financial behavior and banking practices and Differences between groups were determined. Finally the groups were compared according to their age, education and gender.
Keywords: psychological segmentation, market segmentation, retail banking, customer satisfaction measurement.
Introduction Market segmentation is one of the most important concepts in the literature of marketing and consumer behavior. In strategic view selecting of appropriate market segment is the first step in developing a successful marketing programs]10[. Due to the increasing competition in the markets, today more than ever businesses feel the need to effectively segment their market. There are four basics for market segmentation: geographical segmentation, behavioral characteristics, demographic characteristics and psychological characteristics]10[ Geography: Urban, suburb, rural, northern, southern and etc. Demographic: age, gender, education, religion, race, class and etc. Behavior: time consuming, expected benefits, the consumer agree to serve and etc. Psychological: Lifestyle, Personality and etc. _________________________________________________ Hajar Hakimi, PhD Student, Business School Management, Tehran University, Email:
[email protected]
Proceedings of 9th International Business and Social Science Research Conference 6 - 8 January, 2014, Novotel World Trade Centre, Dubai, UAE, ISBN: 978-1-922069-41-2 The most important factor in psychological segmentation used, is lifestyle. Life style that make a comprehensive view of consumer behavior and motivation lies in consumer purchasing behavior, can be the best criteria for market segmentation ]14[ Under this approach, the target market would be segmented based on the differences between the different life styles of consumers. The term of lifestyle was first proposed by Layzr in marketing literature and quickly attracted the attention of specialists in this field. This concept has been used in marketing decisions, especially in market segmentation]16[. In past demographic characteristics of customers were examined to understand their behavior but with the advancement of marketing research, Marketers concluded that Lack of richness of consumers' demographic characteristics to understand and predict the consumer behavior and they need to be complemented by further studies]15[. The aim of market researcher and marketer from identifying consumer lifestyle to achieve better understanding of consumers and their buying decisions.
1. Market Segmentation Market segmentation is one of the fundamental principles of modern marketing, rooted in microeconomic theory, and pay particular attention to the needs of customers. In segmenting the market, the potential customers are divided into several sections with similar wants and needs. Then due to the differences in demands and needs of the different segments the organization will provide different elements of the marketing mix for each segment]13[. Market segmentation is based on the belief that a particular product is not usually appeal to all consumers. Different consumers have different goals from using a particular product. They have different product knowledge and different level of involvement that reflect in their purchasing behavior. If we consider market as a collection of consumers and potential consumers with unmet needs and enough purchasing power; Market segmentation means dividing the market into smaller groups of consumers with similar needs So that these groups are expected to have similar responses to a certain marketing strategy. Successful marketers are usually who adjust their marketing strategy to demands and needs of their target segment [7]. Dividing market into smaller segment was first suggested by two researchers named Robinson and Chamberlain was introduced in 1933 [9]. However, due to the indirect and imperfect of their suggestion, Vidal Smith was considered as the first person providing accurate and complete definition of market segmentation. In 1956, Smith pointed to inconsistencies in the demand for goods and services, based on the economic theory of imperfect competition, he defined market segmentation as: ―Segmenting the market, is looking at a heterogeneous market as a number of smaller homogeneous markets, in response to different customer preferences towards a product, among significant segments of the market ]13[‖ Market Segmentation is the core marketing strategies. Market segmentation is the process of identifying and isolating properties of buyers to select the markets that the
Proceedings of 9th International Business and Social Science Research Conference 6 - 8 January, 2014, Novotel World Trade Centre, Dubai, UAE, ISBN: 978-1-922069-41-2 organization wants to or can provide products and services and Designing products and marketing programs to meet the needs of customers [10]. In other definitions, market segmentation is defined as: Market segmentation is the choosing process in which the market is divided into groups of customers with common features and manageable needs. McDonald Defined segmentation as:"Dividing and separating current and potential customers into separate groups and different sections to as a result, customers with similar needs are placed in a segment". Market Segmentation is the process of dividing the market into distinct subsets of customers that have similar needs and behaviors. Segmentation has many advantages for organizations, including: the identification of customers’ differences is the key to successful marketing strategy so that makes the company's products and services more meet the needs of customers. Marketing Segmentation would result particular sectors, where the company can best meet the needs of all or most of the customers in that area [10]. The company can test their needs against competing firms and measure customer satisfaction and if the customer satisfaction levels is lower from competitors' products they can take advantage of this opportunity to sell their products]2[. Segmentation helps to understand the exact needs and characteristic of customers and this makes the marketing programs are designed according to the market to gain a competitive advantage now [4]. The overall benefits of market segmentation include: Facilitate the selection of target markets, increase profitability, shaping needs, Innovation, increase marketing efficiency, customer’s profitability, enduring relationships with customers and increasing market share.
2. Market Segmentation Basis As Wendell has noted: Although we were able to divided a market into homogeneous segments this segmentation will be useful when the efficiency and significance of marketing activities would change according to the market segmentation. Obviously there are many ways for segmentation, but all of them are not effective. Tips and criteria should be considered in effective market segmentation so the results of the study are valid and usable. Various authors in various aspects have expressed the relation between market segmentation and organizations strategies ]9[The most important aspects of the factors for market segmentation are: availability, accessibility, applicability and capability of making differentiation.
3. Market Segmentation Criteria There is no single way for market segmentation. Marketers must weigh segmentation variables (single or combined) to find the best way to view the market structure [7].
Proceedings of 9th International Business and Social Science Research Conference 6 - 8 January, 2014, Novotel World Trade Centre, Dubai, UAE, ISBN: 978-1-922069-41-2 Market segmentations conducted on four bases: demographic, geographic, behavioral attributes and psychological characteristics. Based on Kottler's theory includes: geographic, demographic, psychological and behavioral Geographical Segmentation Geographical segmentation, divides market to different geographical units such as nations, regions, states, counties, cities, or even neighborhoods]2[ . A company may want to be active in one or several geographic areas. Or choose the entire region, but also pay attention to the wants and needs of different geographical areas. Usually in banking, corporate banking activities through a range of geographical (regional vs. international) are specified. However, in industries like financial industries such as banking and insurance industries, cannot be distinguished in terms of location or region. Most of organization use Geographical segmentation method For example, when banks want to decide about the number and geographic location of branches and ATM will engage in geographic segmentation. However, customers expect easy and convenient financial services and banking in their areas. Bank should minimize geographical limitations and make customer service possible everywhere. Due to this, purchasing patterns and preferences for financial products and services is shown through geographical separation. In addition to the above points it is essential to consider: First, the impact of technological innovation, leads to changes in market boundaries. For example by using a bank card or telephone banking, anyone can trade without bank branches. Secondly, differences in preferences and purchasing patterns for products or financial services do not come along geographical lines, so the usefulness of geographic segmentation is removed. Demographic Segmentation Market segmentation based on demographic variables such as: Age, gender, family size, family life cycle, income, occupation, religion, ethnicity, race and nationality [2]. Even when other variables used by marketers for the first time, as expected benefits or behavioral segmentation, they must be aware of the demographic characteristics of each sector to achieve a proper estimation of the size of the target market and achieving their marketing goal. Demographic factors are the most common criteria for dividing the market into groups of customers, Because most of the demands and needs Show a significant change in the effect of demographic change and these variables are much easier to measure than other variables[2]. On the other hand, Frank (1968) found that behavioral differences between demographic segments are very small and insignificant. Many marketing managers have criticized too much focus on demographic segmentation. In Alfarensi and Sargent view Except for certain products that directly communicate to groups with certain demographic description Evidence shows that the
Proceedings of 9th International Business and Social Science Research Conference 6 - 8 January, 2014, Novotel World Trade Centre, Dubai, UAE, ISBN: 978-1-922069-41-2 demographic variables except education are not good predictor of consumer behavior [9]. Behavioral Segmentation Customer Behavioral segmenting based on usage time, usage situation, usage and loyalty will divide market in to different groups Some of these factors include: Occasion: we can segment buyers by the time of purchase and usage of a product. Segmentation based on this factor will help in establishing good habits of customers [2]. Expected benefits: dividing of buyer groups based on their expected benefits of the purchased product is one of the most effective forms of market partitioning [2]. User Status: Many markets can be segmented based on the situation. Those who did not consume the goods who formerly were goods consumer, potential consumers, who have used the products for the first time and permanent users. Although using this method give more holistic view of banking customers than expected benefit segmentation and has recently been used widely in research on this issue, but as more similar banking products become, higher education, public awareness of the financial and banking services, and the increasing use of electronic services; that does not seem to be efficient criteria for bank market segmentation. Psychological Segmentation In psychological segmentation, customers would divide into different groups based on their lifestyle, personality, interests and expected benefits. Research shows that people in similar demographic groups, have very different psychological profile. Other factors used in this section, in Kottler view are: social class, personality and life style. The most reason to criticize this method of segmentation is lack of methods and models in defining life style, although in recent years, extensive research on lifestyle and personal identification has been conducted and provides valuable models in all over world. Identifying consumer lifestyle to achieve better understanding of consumers and their buying decisions are the main goal in lifestyle segmentation."Market segmentation based on lifestyle" is a useful concept for marketing and advertising programs]16[. Market Segmentation in banks traditionally focuses on geographic areas, where a range of banking products offered to customers [5]. Demographic factors mostly used by bank for market segmentation, and research shows there is no logical relation between the financial behavior of individuals and their demographic characteristics Banks seek to use other factors in order to effectively segmenting customers. Chanon suggests product-centric approach has been the most popular method in bank Market Segmentation [5].
Proceedings of 9th International Business and Social Science Research Conference 6 - 8 January, 2014, Novotel World Trade Centre, Dubai, UAE, ISBN: 978-1-922069-41-2 MacDonald was the first one using new method in Market Segmentation. He studied customer’s satisfaction from banking services in different groups. Many variables have been used for psychological segmentation, lifestyle has been the most important one, particularly in retail banking and in retail credit, lifestyle plays an important role in consumer behavior [12].
5. Lifestyle The term "lifestyle‖ After the first Layzr was introduced in 1936, was highly regarded by marketers and so quickly became and effective marketing tools especially in market segmentation. Layzr considers lifestyle as people’s shared goals and ways to achieve them[6]. Lifestyle is a person's life Outer appearance that reflects the perception of one's own life His choices in life and in everyday life. Lifestyle has formed from life experience, current position and essential characteristics and features and affects all aspects of consumer behavior. Lifestyle is Function of the genetic and personal characteristics of a person shape from Interaction with the social environment and through the various stages of the life cycle [6]. An interest lifestyle consequently influence needs, desires, shopping behavior and consumer behavior and determines many of his decisions, which in turn can have an impact on a person's lifestyle and to enhance or modify it. Lifestyle consist of products that one buys, how to take his mind about the product and feeling that the product contains. Another definition of life is a demonstration of their individual sense of themselves [8]. Lifestyle shows the overall picture of himself in an individual's mind. The picture generally shape in the socialization process of one's own culture, on the other hand lifestyle is outside view of someone’s understanding about him in mind. The family Lifestyle is affected from person lifestyle and vice versa [6]. Abraham Hajiyani believes that the concept of lifestyles is able to alternative, many of the words like social class And be able to better represent the cultural and social realities of complex behaviors and attitudes of people. He believes that lifestyle can be extracted through someone’s leisure, sexual behavior, interests, profession, occupation, mode of dress, interests, art, literary, sports, language and etc. He believes the most important indicator for measuring lifestyle is leisure and someone’s entertainment because people usually choose their entertainment freely or voluntarily According to their personality. Thus, during leisure time people have opportunity to determine their cultural values, interests, hidden attitudes and pursue a different approach; Even if this approach contradicts to official rules set by the institutions of social control and cultural values of the community. He believes that people even can use their lifestyle for hidden resistance or struggle with typical values [1]. Zkayy describes lifestyle as well as a model of social action, the discriminator of individuals and social groups from each other. Solomon believes that life is referred to consumer buying patterns that reflect in people time consuming and the money they spend. On the other hand, in many instances, lifestyle refers to attitudes, hidden values and Attitudes underlying in behavioral patterns.
Proceedings of 9th International Business and Social Science Research Conference 6 - 8 January, 2014, Novotel World Trade Centre, Dubai, UAE, ISBN: 978-1-922069-41-2 Solomon believes that every lifestyle form is unique. Buying patterns based on the life style usually have various components that among people with similar social and economic situations are common. Initial attempts by experts to evaluate a consumer’s life style are known as psychological characteristics. In fact psychological characteristics and lifestyle terms are so close that can be used instead of each other [6]. Psychological Perspectives on consumer lifestyle survey included the following points: Attitudes: means a person assessment of other people, places, ideas, products and etc Values: person deep beliefs about acceptable things or matters of his interest Activities and Interests: activities other than regular job that people spend their time and energy for them Demographic characteristics: individual characteristics such as age, gender, education, income, occupation, family structure and etc Patterns of media: means certain media that people are more visit them. Usage rate: the size or rate of consumption of a particular product Segmenting consumers usually based on the first three dimensions and other dimensions are used to complete segmentation [6]. On the other hand consumers are rarely aware of the important role of lifestyle in purchasing decisions. Lifestyle gives people Most of Tips Guide and motivations for buying to individuals but if it is done very indirect and hidden in people's minds. In other words, the lifestyle of people does not form with their decision to choose a specific product, but the unconscious and hidden forms. Studies with a focus on consumer lifestyle or activity is also useful for developing products and Companies have found that studying of population lifestyle was generally profitable for them [6]. Lifestyle Assessment Methods AIO (Activities, Interest, Opinions) One of the most common methods for lifestyle is measuring consumers' activities, interests and opinions [11]. Researches of Benjamin(1976) showed that consumers activities are classified based on what they like to do, Ways that they like to spend their leisure time, Interests, and the ways they prefer to spend their disposable income, they. So By asking questions about the following factors the lifestyle of consumers will be determined [6]. Activities: jobs, duties and hobbies Interests: Family, Career and Community beliefs: customers, people, social, political, economic and commercial Usually in marketing research (in the case of standard products which are mass consumption) AIO reports are common in nature, but in consumer’s lifestyle research about a particular product or industry, at least some of these questions will be related to
Proceedings of 9th International Business and Social Science Research Conference 6 - 8 January, 2014, Novotel World Trade Centre, Dubai, UAE, ISBN: 978-1-922069-41-2 a particular product or service [10].One of the earliest studies AIO’s dimensions, developed in 1971 by Wells, W.D. Tigert [11]. Table (2-2) - AIO Dimensions by Wales Tigert Activities Interests Opinions Demographic characteristics Work family Own age Entertainment home Social education Social events job Issues income Holidays Society Policy occupation Recreation Rest Business family size Joining the club Fashion economy geographical Local groups Food education town size Buy Success products Life stage future )Solomon, 2006, p.563( VALS روش.2-1-5 VALS™ identifies the psychological motivations that predict consumer differences. VALS uses proprietary psychometric technology to measure concepts that— researchers have proved empirically—correlate with consumer behavior. The inherent stability of VALS 20years after its development is testimony to the theories of the development team. This system was first developed by SRIC-BI consulting company in 1970 to assess values and lifestyles changes in American consumers and revised in 1989(Peter and Olson, 2005). The original VALS, which SRI International launched in 1978, was based on work by noted consumer futurist Arnold Mitchell, who wanted to explain the fragmentation of U.S. society in the 1960s and the economic and societal implications of these changes. The 1960s was also the time when the advertising industry was transforming to have an integrated marketing focus. Advertising visionaries encouraged Mitchell to enhance and extend his work into a marketing tool. Mitchell's pioneering method of applying psychographics to business management and marketing research enabled marketers to use VALS as a way—beyond demographics—to think of consumers. Nine American Lifestyles, Mitchell's 1983best-selling book, and the adoption of VALS by leading marketers led Advertising Age to cite VALS as "one of the ten top market research breakthroughs of the 1980s". Revised version VALS2 to identify values and attitudes has been classified according to the characteristics; while the old version would categorize them based on the activities and interests of consumers [10]. VALS™ evolved to explain the relationship between psychology and consumer behavior. As consumer attitudes evolved in the late 1980s, the VALS ability to predict consumer behavior on the basis of attitudes and lifestyles weakened. Recognizing that the basis of the system needed to move to a more enduring platform to remain relevant, a team from SRI International, Stanford University, and the University of California,
Proceedings of 9th International Business and Social Science Research Conference 6 - 8 January, 2014, Novotel World Trade Centre, Dubai, UAE, ISBN: 978-1-922069-41-2 Berkley, determined that psychological traits are more stable than societal trends and shared values and beliefs to explain and predict consumer behavior. Following a two-year development and validation effort, a new VALS launched in 1989. Still grounded in the philosophy that psychological traits and demographics are more powerful than demographics alone, VALS now uses psychology to describe the dynamics underlying consumer preferences and choices. VALS incorporates a resource dimension because a consumer's resources constrain or enhance the consumer's ability to express him or herself in the marketplace. VALS framework
Past researches Kucukemiroglu, Orsay used classification on the basis of the expected benefits for bank customer’s segmentation. Ramasandram survey entitled "lifestyle segmentation as the
Proceedings of 9th International Business and Social Science Research Conference 6 - 8 January, 2014, Novotel World Trade Centre, Dubai, UAE, ISBN: 978-1-922069-41-2 main factor‖ which was conducted in January 2010 in India, used lifestyle for Market Segmentation of bank customers Lifestyle studies are an attempt to reach the minds of the customers and this research shows how people spend their time in various activities, things they most value and their view about world around them. Predict someone behavior in a field will helps to predict behavior in other area. Any person lifestyle affected by his attitude, interests and activities. His segmentation was based on 12 different lifestyle; 1. optimism 2. aspirers 3. pragmatic 4. Party lover 5. systematic 6. achievers 7. Anti- credit 8. Security seeker 9. Family oriented 10. Value oriented 11. Community oriented 12. Privileged In a study designed to investigate the behavior of the customers were customers of Islamic banking in Indonesia by Adiwarman, based on qualitative research three clusters with different incentives were found[19]. Incentives resulting from different groups were as follows; 1. Product functionality 2. Product form 3. Product life-style In this study, using in-depth interviews with CEOs of 21 banks in Indonesia, three other clusters of bank customers were found: Sharieh loyalties: Those who adhere to religious principles, has encouraged them to use the services of Islamic banking. Floating market: People are in floating market do not have any major driver for Islamic banking services. Conventional loyalists: People in this category are not encouraged to use Islamic banking services because of religious motives of Only adhere to the customs of their community made them enthusiastic about it. In the same research conducted in 2004 by KBC, there factors recognized as the most important factors influencing the choice Bank: Product function Product shape Lifestyle The main difference between the groups identified is weight and importance of each factor. Product function is important for all segments although floating market have more interest in that. Product shape is an important factor for Sharieh loyalties and on the other hand floating market has no care for that. Lifestyle plays an important role in
Proceedings of 9th International Business and Social Science Research Conference 6 - 8 January, 2014, Novotel World Trade Centre, Dubai, UAE, ISBN: 978-1-922069-41-2 floating market while this is not an important factor for Sharieh loyalties. In 2001 Morgner segmented banking customers based on their expected benefits and attitudes. He believed that the customers’ classification is based on these factors, and this kind of segmentation raises Bank's ability to resolve the conflict between personal services and cost standards. In this study, using cluster analysis and different aspects of expected benefits and attitudes, a unique form of bank customers' classification were conduct. Method employed to segmentation was more personal and functional responses combined with customer needs and demographic factors. In 2005, Alice Dragoon in her paper explored how to properly segment customers for RBC Bank. In this paper, she used a model based on life stage segmentation. She believes that the use of demographic factors is useful only where they happened to be in line with customer requirements. In her model she used customer potential profitability and current profitability in addition to customer lifetime value. In this study, the data collected and has been classified and processed using SPSS software. Then with using descriptive analysis (frequency, percentage, mean, standard deviation) and inferential statistics (Pearson, exploratory factor analysis and cluster analysis) were analyzed. Based on the analysis conducted, research questions have been answered. In total, over one week to customer satisfaction questionnaire on the bank's website, 3,105 people responded to the questions. KMO Analysis Result And Bartlett Test Amount DF P KMO 0/88 Bartlett 43456/62 1540 0/000 In relation to the factors extracted in this study, principal component analysis is used to extract factors. Table 2 shows that 7 factor’s Eigen values are greater than one. In the meantime the first factor explained 34/48% of the total variance. The following factors, respectively explained, 48/24%, 58/75% and 67/53%, 75/15%, 80/95% and 85/6% of the data variance.
Proceedings of 9th International Business and Social Science Research Conference 6 - 8 January, 2014, Novotel World Trade Centre, Dubai, UAE, ISBN: 978-1-922069-41-2 Cronbach's alpha
7
factors 6 5
questions 4 3 First factor
2
1
0.65 0.65 0.56 0.73 0.55 0.52 0.51
If any of my family members got sick I will take care of them. I prefer to spend my time with my family. I have at least one meal with my family. I usually clean up my room. I go to my doctor as soon as I see any sign of sickness I am a religious person.
Second factor 0.66 0.64 0.59 0.54 0.73
0.52
0.51
0.51
I pay a lot of attention to fashion. I prefer fashion to casualty. I spend plenty of time with my friends. I like to brag about myself. I prefer to go to party rather spending time in house. I think working with computer is really complicated I think there is no problem with throwing out little garbage in to street.
Third factor 0.63 0.62 0.72
0.59 0.59 0.54
I like to travel to whole different places. I think I have high personal power. I like unexpected trips. I like challenging works. I am much more
Proceedings of 9th International Business and Social Science Research Conference 6 - 8 January, 2014, Novotel World Trade Centre, Dubai, UAE, ISBN: 978-1-922069-41-2 Cronbach's alpha
7
factors 6 5
questions 4
3
2
1 independence than most of people I know.
Forth factor 0.66 0.70
0.61 0.60 0.50
I have influence in what my friends buy. I am always consultant in my friend’s decision. I prefer to be leader in a group. Everybody calls be asking for brands.
Fifth factor 0.71
0.60
0.56
I prefer to make things rather than buying them. I fix my own stuff. Sixth factor
0.69
0.66
Working outside is more appropriate for men rather than women. I think father should be head of family
0.65
Seventh factor 0.61
0.54
0.79
Factors’ Explained Variance Eigen values Cumulative factors Percentage total percentage of variance of variance First 4.62 8.48 34.48 Second 2.2 13.75 48.24 Third 1.68 10.51 58.75 Forth 1.4 8.77 67.53 Fifth 1.21 7.61 75.15 Sixth 0.92 5.79 80.95 Seventh 0.72 4.11 85.06
I am satisfied with my current life I am worried about future
Proceedings of 9th International Business and Social Science Research Conference 6 - 8 January, 2014, Novotel World Trade Centre, Dubai, UAE, ISBN: 978-1-922069-41-2 Clustering Result clusters Error factors F Sig Mean Mean Df Df Square Square 1 87.14 6 0.462 3098 168.98 0.00 2 255.48 6 0.650 3098 393.00 0.00 3 122.62 6 0.461 3098 266.13 0.00 4 188.32 6 0.631 3098 295.86 0.00 5 500.94 6 0.695 3098 720.23 0.00 6 848.38 6 0.756 3098 1120.84 0.00 7 120.15 6 0.816 3098 147.22 0.00 According to our research findings, we were able to segment Bank Mellat retail customers on the basis of psychological characteristics into seven clusters as follows: 1. Diversity oriented: people in this cluster are interested in challenging work, and their independence is characteristically high. Surprisingly this group are concerned about their financial independence and doing their bank work through the Internet. They have no desire to communicate with branch staff. 2. Authoritarian: People in this cluster have a strong desire to patronize and like to be consultant in decision making. In terms of the financial aspects, they do most of their banking activities via the Internet and Insist on having saving for life. In contrast to the previous group, these people see going to branch as an opportunity to speak with branch staff. 3. Independence-oriented: People in this group tend to do things on their own and prefer to build things instead of buying. These people have little interest in accepting others donations and they have willingness to pay through internet. But are willing to use mobile banking services more than others segments. Another characteristic of this group is willing to buy stocks rather than having saving deposits in bank and make this group is more risky. 4. Autocrats: People in this group believe that the father is head of family, and they believe men are better for working outside than women. This group will go to bank branches on a daily basis. This group prefers transaction through banking cards. They work with more than 3 banks and have lower income in comparisons to others. 5. Family-oriented: This segment has the largest population. They like to spend time with their family and enjoy having dinner with them. They like doing things on time and have a really tied discipline in their personal life and they are religious people. They most get to know about baking products through their family members. Having lower income and lower level of education are their important characteristics. 6. Fashion-oriented: they pay a lot of attention to fashion. Most of them don’t have any academic and university education and have lower monthly income than others. They mostly d their banking business thorough branches and they prefer to save their money in other assets rather than saving in banks. 7. Satisfaction-oriented: this group according to their psychological characteristics is really optimistic about future and is really satisfied about present life. Most of these group members are men. They claim to have high knowledge about banking products and they do their banking with more than 3 banks. They relatively have higher income and prefer to have their financial transaction with banks’ card.
Proceedings of 9th International Business and Social Science Research Conference 6 - 8 January, 2014, Novotel World Trade Centre, Dubai, UAE, ISBN: 978-1-922069-41-2 Name of Cluster
% Of Total
men women
Cluster comparison Psychological age education characteristics 63% Top 25 to 34 university independence, years degrees interest in old challenging tasks
Diversity oriented
9.52% 85.2%
14.8%
Authoritarian
10.08 93% %
7%
25 to 34 years old
57% university degrees
Influence on friends, tend to patronize
14%
25 to 34 years old
50% university degrees
Personal desire to fix, to make something instead of buying it
13%
25 to 34 years old
41% university degrees Rest high school diploma
Patriarchal family, women tend to work at home
17%
Less than 25 years old
28% high school diploma and lower
Family oriented, religious
13.6%
25 to 34 years old
45% high school diploma and lower
Fashion oriented
Independence 18.2% 86% -oriented
Autocrats
Familyoriented
Fashionoriented
13%
87%
19.35 83% %
14.3% 86.4%
The most important aspect of banking services Most use of internet to perform banking, payment of goods once, payment with card and financial independence. Most use the internet for banking, the importance of savings, pay for goods at once, transfer huge funds via the Internet Top less interested in accepting donations from Others, payment through PayPal, once payment for goods, preferring stock instead of banking Depository Monthly visit to the branch, the tendency toward card services, interested in bank savings, prefer cash to check Knowledge of banking services through the family, Monthly visit to the branch, have a tendency to save and exchange money with card. tend to buy stock instead of saving in banks, many of them go every day to the bank branches, working with more than 3 banks, and the desire to introduce others to get a check
Proceedings of 9th International Business and Social Science Research Conference 6 - 8 January, 2014, Novotel World Trade Centre, Dubai, UAE, ISBN: 978-1-922069-41-2 Name of Cluster
Satisfactionoriented
% Of Total
men women
15.55 74% %
26%
age
25 to 34 years old
education
61% university degrees
Psychological characteristics Current life satisfaction and optimism about the future
The most important aspect of banking services book High awareness of banking services, willingness to exchange through banking cards tendency to have a savings
Proceedings of 9th International Business and Social Science Research Conference 6 - 8 January, 2014, Novotel World Trade Centre, Dubai, UAE, ISBN: 978-1-922069-41-2 Conclusion and Suggestion
Family-oriented, fashion-oriented and Autocrats clusters have lower education level. Satisfaction-oriented, Diversity-oriented, Independence-oriented and authoritarian have highest education level. Family-oriented, fashion-oriented and Autocrats have lowest income and satisfaction-oriented has higher income and most income belong to Diversityoriented, Independence-oriented and authoritarian. Women present are twice of their Percentage of females almost double in Satisfaction-oriented cluster, in the authoritarian cluster with 7% contribution has the lowest participation of women. Tendency of buying stock instead of having a saving account of is higher in Independence-oriented and fashion-oriented, it looks according to their monthly income fashion-oriented have this tendency because of fashion and wide spreading of it. Three segments with lower income have more tendencies to bank transaction via bank cards and they do most of their banking business with electronic banking. Most of them expressed they will be able to pay back banks’ loan. Most of them have positive tendency toward internet banking and this tendency has a positive relation with their income. Segments with lower income have more monthly visit to their branches and they prefer to do their transaction in person.
Suggestion
To improve result of this research it’d been suggested to review their financial profile and extract relation between their lifestyle and financial behavior. In now a day most of IMC (Integrated Marketing Communication) activities would be done without any attention to people lifestyle and values, and finding of the present research suggest taking lifestyle as an important factor in IMC. Designing products with attention to differences between all kind of customer lifestyle: o In developing internet banking use people in Diversity oriented and Authoritarian segments in focus group researches. o With attention to high tendency of Independence-oriented cluster banks can design products based on stock exchange, Investment Fund, Brokerage and etc. o Card based banking services continuously developed according to Authoritarian and family-oriented clusters o Developing a behavioral Balance score card to assess bank customers’ behavior especially for retail risk credit.
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