Define demographics, psychographics, and market segmentation.
Using the scenario as an example, identify and analyze (at a summary level) 2 potential target segments using demographics and psychographics that may meet the bank’s high-level strategic goals.
Select 1 segment, and illustrate why this is the best segment to select based on a detailed discussion of needs, wants, and psychographics of that segment and how they align with achieving the bank’s long-term strategic goals.
The dictionary defines demographics as “the statistical data of a population, especially those showing average age, income, education, etc” (Dictionary, 2017). Psychographics is “the use of demographics to determine the attitudes and tastes of a particular segment of a population, as in marketing studies” (Dictionary, 2017). And marketing segmentation is “the division of a market into identifiable groups, esp. to improve the effectiveness of a marketing strategy” Dictionary, 2017). Each of these definitions make up a major part of marketing. Together they are extremely effective when used properly.
In the scenario of the bank, one of their biggest issues is they are providing products and services that do not appeal to their current demographic. They currently have consumers who are a much older generation. They more than likely need to reach other to an audience that is 18 years old to 40 years old. This younger demographic population are the main ones buying homes, cars, and taking out loans for other services. They are also the main ones seeking financial stability products and services that the bank is looking to provide. The bank has already begun to use psychographics when choosing a target audience, but they are using it towards the wrong demographic. They acknowledged the need to have e-commerce and other faceless around the clock services that would give their consumers more of them without the bankers physically being there. This is important because it shows that if nothing else the bank realizes how important of a role technology is today and that they are current in their marketing and business handling desires.
It seems to me that the best segment would be the working young adults again ranging from age 18 years old to 40 years old. It is important to keep the loyal customers satisfied still, but the bank has to keep on mind that they need to make money in order to stay around and stay relevant. It would be smart to reach other to the group of people who are still figuring out what to do with their money versus the group that has become settled with where their money is. The bank is looking to expand and bring in more revenue, which the new young crowd can help do just that. When the current customers are long gone the bank will still have the new demographic to grow with. And that does not mean that the new comers will automatically stay a customer forever, but the chances are highly likely if they receive the great and loyal services that got the current customers to stay. The benefit is that the new customers will have so much left to achieve financially and that opens up many avenues for the bank to be a part of their family and do business with them.
Dictionary.com. (2017). the definition of demographics. [online] Available at: http://www.dictionary.com/browse/demographics?s=t [Accessed 27 Nov. 2017].
Dictionary.com. (2017). the definition of psychographics. [online] Available at: http://www.dictionary.com/browse/psychographics?s=t [Accessed 27 Nov. 2017].
Dictionary.com. (2017). the definition of market segmentation. [online] Available at: http://www.dictionary.com/browse/marketsegmentation?s=t [Accessed 27 Nov. 2017].
Duncan, A. (2017, February 17). What Are Demographics, And How Are They Used? Retrieved November 24, 2017, from https://www.thebalance.com/what-are-demographics-and-how-are-they-used-38513
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