Skip to main content
Log in

Suboptimal segmentation: Assessing the use of demographics in financial services advertising

Journal of Financial Services Marketing Aims and scope Submit manuscript

Abstract

Marketers routinely make use of demographic-based segmentation as a means of targeting customers of financial services. This article builds on growing evidence that a demographic-based approach is ill-founded. Using a large sample we investigate whether demographic information is of use in segmenting customers and find little support for existing practice. Implications for researchers and managers are discussed.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Figure 1

References

  • Wind, Y. (1978) Issues and advances in segmentation research. Journal of Marketing Research 15 (8): 317–337.

    Article  Google Scholar 

  • Plummer, J.T. (1974) The concept of application of life style segmentation. Journal of Marketing 38 (1): 33–37.

    Article  Google Scholar 

  • Cravens, D. and Piercy, N.F. (2008) Strategic Marketing, 8th edn. New York: McGraw Hill.

    Google Scholar 

  • Lin, C.-F. (2002) Segmenting customer brand preference: Demographic or psychographic. Journal of Product and Brand Management 2 (4): 249–268.

    Article  Google Scholar 

  • Beane, T.P. and Ennis, D.M. (1987) Market segmentation: A review. European Journal of Marketing 21 (5): 20–42.

    Article  Google Scholar 

  • Grove, S. and Fisk, R. (1997) The impact of other customers on service experiences. Journal of Retailing 73 (1): 63–85.

    Article  Google Scholar 

  • Kotler, P., Armstrong, G., Saunders, J. and Wong, V. (1999) Principles of Marketing, 2 Euro edn. London: Prentice Hall.

    Google Scholar 

  • Blattberg, R.C., Peacock, P. and Sen, S.K. (1976) Purchasing strategies across product categories. Journal of Consumer Research 3 (3): 143–154.

    Article  Google Scholar 

  • Dutta-Bergmann, M.J. (2006) The demographic and psychographic antecedents of attitude toward advertising. Journal of Advertising Research 46 (1): 102–112.

    Article  Google Scholar 

  • Harrison, T. (1994) Mapping customer segments for personal financial services. International Journal of Bank Marketing 12 (8): 17–25.

    Article  Google Scholar 

  • Laroche, M., Rosenblatt, J.A. and Manning, T. (1986) Services used and factors considered important in selecting a bank: An investigation across diverse demographic segments. International Journal of Bank Marketing 4 (1): 35–55.

    Article  Google Scholar 

  • Stanley, T.O., Ford, J.K. and Richards, S.K. (1985) Segmentation of bank customers by age. International Journal of Bank Marketing 3 (3): 55–63.

    Article  Google Scholar 

  • Chebat, J.C., Laroche, M. and Malette, H. (1988) A cross-cultural comparison of attitudes towards and usage of credit cards. International Journal of Bank Marketing 6 (4): 42–54.

    Article  Google Scholar 

  • Fennell, G., Allenby, G., Yang, S. and Edwards, Y. (2003) The effectiveness of demographic and psychographic variables for explaining brand and product use. Quantitative Marketing and Economics 1 (2): 223–244.

    Article  Google Scholar 

  • Day, G. (1969) A two dimensional concept of brand loyalty. Journal of Advertising Research 9 (3): 29–35.

    Google Scholar 

  • Iacabucci, D. (2001) Kellogg on Marketing. New York: Wiley.

    Google Scholar 

  • Rossie, P., Mcculloch, R. and Allenby, G. (1996) The value of purchase history data in target marketing. Marketing Science 15 (4): 321–340.

    Article  Google Scholar 

  • Bucklin, R., Gupta, S. and Han, S. (1995) A brands eye view of response segmentation in consumer brand choice behavior. Journal of Marketing Research 32: 66–74.

    Article  Google Scholar 

  • Homburg, C. and Giering, A. (2001) Personal characteristics as moderators of the relationship between customer satisfaction and loyalty. Psychology and Marketing 18 (1): 43–66.

    Article  Google Scholar 

  • Dickerson, M. and Gentry, J. (1983) Characteristics of adopters and non-adopters of home computers. Journal of Consumer Research 10 (2): 225–235.

    Article  Google Scholar 

  • Modahl, M. (2000) Now or Never: How Companies Must Change to Win the Battle for Internet Consumers. New York: Harper Collins.

    Google Scholar 

  • Karjaluoto, H., Mattila, M. and Pento, T. (2002) Electronic banking in Finland: Consumer beliefs and reactions to a new delivery channel. Journal of Financial Services Marketing 5 (4): 346–361.

    Article  Google Scholar 

  • Bellman, S., Lohse, G. and Johnson, E. (1999) Predictors of online buyer behavior. Communications of the ACM 42 (12): 32–38.

    Article  Google Scholar 

  • Bhatnagar, A and Ghose, S. (2004a) A latent class segmentation analysis of e-shoppers. Journal of Business Research 57 (12): 758–767.

    Article  Google Scholar 

  • Dickson, P. and Ginter, J. (1987) Market segmentation, product differentiation and marketing strategy. Journal of Marketing 51 (2): 1–10.

    Article  Google Scholar 

  • Meidan, A. (1984) Bank Marketing Management. New York: Macmillan.

    Book  Google Scholar 

  • Machauer, A. and Morgner, S. (2001) Segmentation of bank customers by expected benefits and attitudes. International Journal of Bank Marketing 19 (1): 6–17.

    Article  Google Scholar 

  • Soper, S. (2002) The evolution of segmentation methods in financial services: Where next? Journal of Financial Services Marketing 7 (1): 67–74.

    Article  Google Scholar 

  • Piercy, N.F. (2010) Market-led Strategic Change, 4th edn. Oxford: Butterworth-Heinemann.

    Google Scholar 

  • Sheth, J., Sisodia, R. and Sharma, A. (2000) The antecedents and consequences of customer centric marketing. Journal of the Academy of Marketing Science 28 (1): 55–66.

    Article  Google Scholar 

  • McDonald, M. and Wilson, H. (2002) The New Marketing. Oxford: Butterworth Heinemann.

    Google Scholar 

  • Baker, S. (2003) New Consumer Marketing. UK: John Wiley.

    Google Scholar 

  • Brown, S. (1993) Postmodern marketing? European Journal of Marketing 27 (4): 19–34.

    Article  Google Scholar 

  • Brown, S. (1994) Marketing as multiplex: Screening postmodernism. European Journal of Marketing 28 (8/9): 27–51.

    Article  Google Scholar 

  • Kotler, P. (2001) Reflections on marketing. In: D. Iacobucci (ed.) Kellogg on Marketing. New York: Wiley.

    Google Scholar 

  • Homburg, C., Workman, J. and Jensen, O. (2000) Fundamental changes in marketing organization. Journal of the Academy of Marketing Science 28 (4): 469–478.

    Article  Google Scholar 

  • Bauman, Z. (1992) Intimations of Postmodernity. London: Routledge.

    Google Scholar 

  • Dutta, M.J. and Youn, S. (1999) Profiling healthy eating consumers: A psychographic approach to social marketing. Social Marketing Quarterly 5 (4): 5–21.

    Article  Google Scholar 

  • Townsend, B. (1987) Market segmentation: Using demographics, psychographics, and other segmentation techniques to uncover and exploit new markets. American Demographics 9 (6): 10–11.

    Google Scholar 

  • Wolberg, J. and Pokrywczynski, J. (2001) A psychographic analysis of generation Y college students. Journal of Advertising Research 12 (4): 33–52.

    Article  Google Scholar 

  • Andronikidis, A. and Dimitriadis, N. (2003) Segmentation of bank customers by utilising ethnic/cultural profile dimensions: A qualitative approach. Journal of Marketing Management 19 (5–6): 629–655.

    Article  Google Scholar 

  • Deutskens, E., Ruyter, K., Wetzels, M. and Oosterveld, P. (2004) Response rate and response quality of internet based surveys. Marketing Letters 15 (1): 21–36.

    Article  Google Scholar 

  • Gunter, B., Nicholas, D., Huntington, P. and Williams, P. (2002) Online versus offline research. Aslib Proceedings 54 (4): 229–239.

    Article  Google Scholar 

  • Tierney, P. (2002) Internet based evaluation of tourism web site effectiveness. Journal of Travel Research 39 (2): 212–219.

    Article  Google Scholar 

  • Schillewaert, N. and Meulemeester, P. (2005) Comparing response distributions of offline and online data collection methods. International Journal of Market Research 47 (2): 163–178.

    Google Scholar 

  • Hair, J., Anderson, R., Tatham, R. and Black, W. (1998) Multivariate Data Analysis, 5th edn. New Jersey: Prentice Hall International.

    Google Scholar 

  • Cohen, J. and Cohen, P. (1983) Applied Multiple Regression/Correlation Analysis for the Behavioral Sciences, 2nd edn. Hillsdale, NJ: Erlbaum.

    Google Scholar 

  • Armstrong, J. and Overton, T. (1977) Estimate nonresponse bias in mail surveys. Journal of Marketing Research. 14 (3): 396–402.

    Article  Google Scholar 

  • Pallant, J. (2003) A Step By Step Guide to Data Analysis Using SPSS for Windows. Buckingham, UK: Open University Press.

    Google Scholar 

  • Peterson, R. and Wilson, W. (1992) Measuring customer satisfaction: Fact and artefact. Journal of the Academy of Marketing Science 20 (1): 61–71.

    Article  Google Scholar 

  • Byrne, B. (2001) Structural Equation Modeling with AMOS. London: Lawrence Erlbaum Associates.

    Google Scholar 

  • Prakash, V. and Munson, J. (1985) Values, expectations from the marketing system and product expectations. Psychology and Marketing 2 (4): 279–296.

    Article  Google Scholar 

  • Belk, R. (1974) An exploratory assessment of situational effects in buyer behavior. Journal of Marketing Research 11 (2): 156–163.

    Article  Google Scholar 

  • Belk, R. (1975) Situational variables and consumer research. Journal of Consumer Research 2 (3): 157–164.

    Article  Google Scholar 

  • Silpakit, P. and Fisk, R. (1985) Participatizing the service encounter: A theoretical framework. In: T. Bloch, G. Upah and V. Zeithaml (eds.) Proceedings of the American Marketing Association Educators Conference.

  • Engel, J., Kollat, D. and Blackwell, R. (1969) Personality measures and market segmentation. Business Horizons 12 (3): 61–70.

    Article  Google Scholar 

  • Ward, S. and Robertson, T. (1973) Consumer behavior research: Promise and prospects. Cited in Belk, R. (1975). Situational variables and consumer research Journal of Consumer Research 2: 157–164.

    Google Scholar 

  • Beal, C., Quester, P. and Hawkins, D. (2002) Consumer Behavior: Implications for Marketing Strategy, 3rd edn. Australia: Mcgraw-Hill.

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Appendix

Appendix

Service items

Customers asked to state how important each item is to them when making a purchase [of online financial services] on a scale seven point Likert scale from ‘Very unimportant’ to ‘Very important’.

Website

The website has a useful search function

The website has a good user interface

I know what all my options are when I shop at this website

This site doesn’t waste my time

The site gives me enough information so that I can identify the item to the same degree as if I am in the store

The website lets me know up-front what shipping charges are

The contents of the website were concise and easy to understand

Pricing is clear and easy to understand

Trust

I felt secure giving out credit card information to this site

I feel like my privacy and personal information is protected at this site

You know exactly what you’re buying from this website

Customer Service

After sale support at the site is excellent

It is quick and easy to compete a transaction at this website

The services were delivered by the time promised

Information

The website lets me know about service availability during search

The site helps me research services

I receive an email when the service will be fulfilled

*It's easy to track the shipping and delivery items of items purchased on this website

Ease of contact

Telephone calls are answered promptly

A contact telephone number is displayed on the site so that I can talk to a ‘live’ person

No advertisements

I do not receive junk mail from being on their mailing list

There are no pop-up advertisements

Personalization

The website does a good job of guessing what kind of things I might want

The website is easy to customize

Company image

The company has a well known name

The website fits with my image of the company

Product range

There are hard to find services on this site

The website has services I can’t find on the high street

*Present in original scale. Deleted in this sample as no product tracking takes place.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Piercy, N., Campbell, C. & Heinrich, D. Suboptimal segmentation: Assessing the use of demographics in financial services advertising. J Financ Serv Mark 16, 173–182 (2011). https://doi.org/10.1057/fsm.2011.21

Download citation

  • Received:

  • Revised:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1057/fsm.2011.21

Keywords

Navigation