Segmentation, targeting, and positioning are broad terms that are commonly used in marketing in the banking industry. In other words, these three-terms are summary of a broad framework made to simplify the overall process of market segmentation in the banking industry. Banking Marketing segmentation can be defined as the process by which banking groups within a given market are divided and profiled concerning a range of variables that help in the determination of market characteristics and tendencies. The segmentation, targeting, and positioning tend to be part of the chronological order for the market segmentation. Segmentation is defined as the process of identifying the market that needs to be segmented, selecting an application of basics that will be used in the course of segmentation as well as developing profiles.
On the other hand, targeting means identification of the most pleasing segments from the segmentation stages and these are always the most profitable options for the banks. Lastly, positioning is the last process, and it’s more business oriented. It involves assessment of a company’s or organizations own competitive advantage and positioning itself as well in the minds of its consumer to remain the most valuable option. This report aims to explain the segmenting, targeting and positioning practices by a banking institution concerning CIMB bank in Malaysia.
CIMB is a full-service Malaysian based bank with other association in Southeast Asian nations as well. The bank offers services like commercial banking, Islamic banking services, asset management of products and services, consumer banking and investment banking. Most of this company’s income is generated from net interest income they get from their services. The vast majority of the CIMB bank earning assets are informed of loans, loan, and salary advances and financing.
Moreover, its portfolios of financial investments are made up of the next most substantial portion. The CIMB bank works on a specific strategy that aims at cost control together with digital banking. The company’s vision to be the leading ASEAN Company while its mission statement to provide universal banking services as a high performing, standardized and integrated company located in ASEAN and key markets beyond, and to champion the acceleration of ASEAN integration and the region’s links to the rest of the world. The bank work under a range of value which guides every stakeholder actions in pursuit of the common vision. These include the following.
Product and market orientation is a very important aspect of market segmentation. It’s a factor that market players in a banking industry should be aware of and always put into practice. A market-oriented organization or company always organize their activities, products, and service around the wants and also the needs being presented by its customers. The CIMB bank is one of the company’s that adhere to product and market orientation term. The bank has its major focus on its banking services and the skills, knowledge and all system that supports the banking services. Product and service orientation plays a major role in maintaining an emphasis on quality, safety, and investment with the changing digital world. The bank has over 850 retail branches in Malaysia, Indonesia, Singapore, Thailand, and Cambodia.
The bank offers the following: personal banking services concerning product and market orientation; savings account service, daily banking, investments, financing its needy customers, credit card services and insurance provisions. It also offers services such a portfolio advisory, wealth management training and bespoke investment solution to all willing and able customers. To successful arrive at product/service and market orientation, the CIMB services have engaged several terms of partnership with several leading companies that include principal financial group, sun life financial company and Allianz insurance company to complement the bank’s services. In this report, it shall be more specific on the personal banking services. (Appannan, 2013)
As the banking industry market is drastically changing, so has the way the CIMB group has been dealing with its potential markets. The CIMB group concept on market orientation is concerned with the techniques the company has been applying while targeting its market. Just like most of the institutions in the banking industry, CIMB group has been trying to increase its service provision despite the customer demand. The company practices more of product orientation more than market orientation. It gives the true applicability of the principle of the “as the productivity levels increase, the cost of production decreases, and due to that their customers will be in a position to purchase their services at a relatively cheaper rate which in turn will accelerate the sales of the initially discussed banking services. The bank is product oriented, and this is evidenced by the way its customers have always being accessing the bank’s services.
The CIMB bank practices value proposition and differentiation that makes them enjoy the benefits of customer loyalty. The company has been able to differentiate itself from the rest of organizations in the banking industry with its concentration on personal or individual banking services although any other bank practices such services, this company has been able to differentiate itself by adding better services and incentives to their customers. One of the major areas that can be used to explain product/service differentiation for this bank is the introduction of a new feature under special preferred customer privileges. The company launched a special service for preferred customers who deposit $50000 or above that limit according to the head of strategy and finance Heng.
When a customer banks their savings and deposits this bank, they are entitled to exclusive services and incentives and both local and regional benefits. Some of the differentiated services for such customers include a stronger and dedicated relationship manager, free access to airport lounges for accommodation in ASEAN, can be able to open CIMB bank accounts in Asian countries before their arrival. Moreover, they will be enjoying the advantages of special discounts at the quality, and five stars rated hotels, classy shops and restaurants in ASEAN and lastly they can access similar recognition at all CIMB branches in ASEAN among many other minor added advantages. With this service differentiation, customers fulfilling the set requirement on set deposit target will be served differently from the rest of customers in all CIMB centers like be served first and have privileged customer rates. This idea was made to target the affluent of people in the marketplace and encourage people even in different countries to open accounts with CIMB and have large amounts of deposits. The other key aspect of service differentiation practiced by the bank is their multi-local business model they have applied. The model Is very different from other models applied by other banks in that, it enables the bank to completely leverage the target and scale of the southeast Asian platform while preserving aspects which have been identifying the bank to the local society and population.
As per the banking landscape, to facilitate personal banking services, all banks have been using ATM. But for the CIMB group, they have tried something new by bringing wealth management product in Cambodia for regional leverage in ASEAN where all ATMs in the five countries, Cambodia, Malaysia, Singapore, Thailand, and Indonesia have been linked. With this special and differentiated ATM service, this banks customers can be in a position to access more than 5000 ATMs within the five covered countries with no transaction charge and of more important is that they can access this amounts in their local currencies. This differentiated service is very beneficial to the bank since customers can access cash in different currency through ATMs and enjoy the low rates of currency conversion than over the counter method. (Becker, 2013)
In business logic, need is defined as that motivating force that calls for satisfaction. Needs are variable, and they range from basic needs that can be satisfied by necessities to social needs that are satisfied by necessaries.
On the other hand, want is that desire to possess or do a certain thing. The difference between need and want is that needs are always finite but in contrast but wants are always boundless. Demand is defined as the claim for certain good or service that is necessary or required. (Business dictionary, 2018) The CIMB group has been in the frontline is satisfying the Malaysian and ASEAN customers banking needs. Some of the trendy and common needs and wants include the following:
Considering the above outlines three needs and wants that are common for the Malaysian and ASEAN banking customers, it’s evident that the CIMB service delivery after positioning and differentiation has been able to fulfill them as expected. (Arkan, 2018)The use of the digitalized model of ATM that are linked within the five counties facilitates the anticipation of one of their needs as well as ensuring the banking services like cash withdrawal and deposits are quickly, simplified and easily and readily available. In addition to that, the company has fulfilled their customers’ needs and want for personalized pricing by coming up with special incentive and treatment for all those customers attaining a $50000 deposits and above. Some of the personalized pricing for such customer is their ability to get discounts for hotels, restaurant and airport lounge, unlike other customers. (Conrad, 2016) From statistics, the demand for the CIMB services is very high. The company has over 180 branches now, and this is a clear indication that the bank is fast growing with the increasing demand for its services.
Segmentation and targeting are the very important aspect of marketing. In a competitive industry like the banking industry, it’s very important a bank to segment its customers based on factors like demography, geographic and behavioral form of segmentation. The CIMB bank has achieved this by segmenting its markets basing on two factors, which include demographic and psychographic segmentation. The customers to this bank are only those who need Islamic and internet or online banking services. In this case, the target market for the CIMB bank is made up of all consumers who make use of banking and finance services
The CIMB bank concentrates on the provision of innovative and value-adding banking and financial services to its Malaysian customer as well as to its ASEAN customers. They have designed these services to cater for the many and different banking and financial needs for their customers.
The following are the factors that will and have been affecting the CIMB consumer behaviors.
CIMB bank operated under a competitive nature of competition with other few but large firms that offer banking, financial products and services, and services for personal use and business use. It operates under competitive oligopolistic market competition. (LEE, 2004) The company is competing in such a market structure due to its choice of market segmentation and product positioning. Some of its direct and indirect competitors include the following, the kingfish group, kenanga, AmBank group, and Ken trade bank. (Owler, 2018)
Conclusion
It is recommended for CIMB Bank to invest more in research and development (R&D) to ensure that it can continuously provide improved and enhanced banking and finance products/services to its customers. It must also ensure that it comes up with new and innovative products and services which can satisfy the new and contemporary needs of its customers. This would ensure that it can stay ahead of its competition in ASEAN markets.
References
Appannan, S. B. (2013). Customer perception of service quality of commercial banks: A Case Study in CIMB, Malaysia.” . Academic research, 4(5), 459.
Arkan, C. (2018, Dec 5). MICROSOFT IN FINANCIAL SERVICES. Retrieved from Microsoft: https://cloudblogs.microsoft.com/industry-blog/industry/financial-services/the-top-five-things-a-customer-needs-from-their-bank/
Becker, S. A. (2013). CIMB features special preferred customer privileges. The phnom penh, 1-12.
Business dictionary. (2018). Business terms . Business dictionary.
Conrad, J. (2016). trends banks need to know about today’s customers. Foresee, 1-19.
LEE, K. P. (2004). CIMB welcomes competition. The star, 7.
Owler. (2018, Dec 4). CIMB’s Competitors, Revenue, Number of Employees, Funding and Acquisitions. Retrieved from Owler: https://www.owler.com/company/cimb
Seshaiah, V., & Narender, V. (2007). “Factors Affecting Customers’ Choice of Retail Banking. The IUP Journal of Bank Management, IUP Publications, , 34-46.
Smith, C. (2018). What Do Customers Want From Their Banks? Banking.
Segmentation, targeting, and positioning are broad terms that are commonly used in marketing in the banking industry. In other words, these three-terms are summary of a broad framework made to simplify the overall process of market segmentation in the banking industry. Banking Marketing segmentation can be defined as the process by which banking groups within a given market are divided and profiled concerning a range of variables that help in the determination of market characteristics and tendencies. The segmentation, targeting, and positioning tend to be part of the chronological order for the market segmentation. Segmentation is defined as the process of identifying the market that needs to be segmented, selecting an application of basics that will be used in the course of segmentation as well as developing profiles.
On the other hand, targeting means identification of the most pleasing segments from the segmentation stages and these are always the most profitable options for the banks. Lastly, positioning is the last process, and it’s more business oriented. It involves assessment of a company’s or organizations own competitive advantage and positioning itself as well in the minds of its consumer to remain the most valuable option. This report aims to explain the segmenting, targeting and positioning practices by a banking institution concerning CIMB bank in Malaysia.
CIMB is a full-service Malaysian based bank with other association in Southeast Asian nations as well. The bank offers services like commercial banking, Islamic banking services, asset management of products and services, consumer banking and investment banking. Most of this company’s income is generated from net interest income they get from their services. The vast majority of the CIMB bank earning assets are informed of loans, loan, and salary advances and financing.
Moreover, its portfolios of financial investments are made up of the next most substantial portion. The CIMB bank works on a specific strategy that aims at cost control together with digital banking. The company’s vision to be the leading ASEAN Company while its mission statement to provide universal banking services as a high performing, standardized and integrated company located in ASEAN and key markets beyond, and to champion the acceleration of ASEAN integration and the region’s links to the rest of the world. The bank work under a range of value which guides every stakeholder actions in pursuit of the common vision. These include the following.
Product and market orientation is a very important aspect of market segmentation. It’s a factor that market players in a banking industry should be aware of and always put into practice. A market-oriented organization or company always organize their activities, products, and service around the wants and also the needs being presented by its customers. The CIMB bank is one of the company’s that adhere to product and market orientation term. The bank has its major focus on its banking services and the skills, knowledge and all system that supports the banking services. Product and service orientation plays a major role in maintaining an emphasis on quality, safety, and investment with the changing digital world. The bank has over 850 retail branches in Malaysia, Indonesia, Singapore, Thailand, and Cambodia.
The bank offers the following: personal banking services concerning product and market orientation; savings account service, daily banking, investments, financing its needy customers, credit card services and insurance provisions. It also offers services such a portfolio advisory, wealth management training and bespoke investment solution to all willing and able customers. To successful arrive at product/service and market orientation, the CIMB services have engaged several terms of partnership with several leading companies that include principal financial group, sun life financial company and Allianz insurance company to complement the bank’s services. In this report, it shall be more specific on the personal banking services. (Appannan, 2013)
As the banking industry market is drastically changing, so has the way the CIMB group has been dealing with its potential markets. The CIMB group concept on market orientation is concerned with the techniques the company has been applying while targeting its market. Just like most of the institutions in the banking industry, CIMB group has been trying to increase its service provision despite the customer demand. The company practices more of product orientation more than market orientation. It gives the true applicability of the principle of the “as the productivity levels increase, the cost of production decreases, and due to that their customers will be in a position to purchase their services at a relatively cheaper rate which in turn will accelerate the sales of the initially discussed banking services. The bank is product oriented, and this is evidenced by the way its customers have always being accessing the bank’s services.
The CIMB bank practices value proposition and differentiation that makes them enjoy the benefits of customer loyalty. The company has been able to differentiate itself from the rest of organizations in the banking industry with its concentration on personal or individual banking services although any other bank practices such services, this company has been able to differentiate itself by adding better services and incentives to their customers. One of the major areas that can be used to explain product/service differentiation for this bank is the introduction of a new feature under special preferred customer privileges. The company launched a special service for preferred customers who deposit $50000 or above that limit according to the head of strategy and finance Heng.
When a customer banks their savings and deposits this bank, they are entitled to exclusive services and incentives and both local and regional benefits. Some of the differentiated services for such customers include a stronger and dedicated relationship manager, free access to airport lounges for accommodation in ASEAN, can be able to open CIMB bank accounts in Asian countries before their arrival. Moreover, they will be enjoying the advantages of special discounts at the quality, and five stars rated hotels, classy shops and restaurants in ASEAN and lastly they can access similar recognition at all CIMB branches in ASEAN among many other minor added advantages. With this service differentiation, customers fulfilling the set requirement on set deposit target will be served differently from the rest of customers in all CIMB centers like be served first and have privileged customer rates. This idea was made to target the affluent of people in the marketplace and encourage people even in different countries to open accounts with CIMB and have large amounts of deposits. The other key aspect of service differentiation practiced by the bank is their multi-local business model they have applied. The model Is very different from other models applied by other banks in that, it enables the bank to completely leverage the target and scale of the southeast Asian platform while preserving aspects which have been identifying the bank to the local society and population.
As per the banking landscape, to facilitate personal banking services, all banks have been using ATM. But for the CIMB group, they have tried something new by bringing wealth management product in Cambodia for regional leverage in ASEAN where all ATMs in the five countries, Cambodia, Malaysia, Singapore, Thailand, and Indonesia have been linked. With this special and differentiated ATM service, this banks customers can be in a position to access more than 5000 ATMs within the five covered countries with no transaction charge and of more important is that they can access this amounts in their local currencies. This differentiated service is very beneficial to the bank since customers can access cash in different currency through ATMs and enjoy the low rates of currency conversion than over the counter method. (Becker, 2013)
In business logic, need is defined as that motivating force that calls for satisfaction. Needs are variable, and they range from basic needs that can be satisfied by necessities to social needs that are satisfied by necessaries.
On the other hand, want is that desire to possess or do a certain thing. The difference between need and want is that needs are always finite but in contrast but wants are always boundless. Demand is defined as the claim for certain good or service that is necessary or required. (Business dictionary, 2018) The CIMB group has been in the frontline is satisfying the Malaysian and ASEAN customers banking needs. Some of the trendy and common needs and wants include the following:
Considering the above outlines three needs and wants that are common for the Malaysian and ASEAN banking customers, it’s evident that the CIMB service delivery after positioning and differentiation has been able to fulfill them as expected. (Arkan, 2018)The use of the digitalized model of ATM that are linked within the five counties facilitates the anticipation of one of their needs as well as ensuring the banking services like cash withdrawal and deposits are quickly, simplified and easily and readily available. In addition to that, the company has fulfilled their customers’ needs and want for personalized pricing by coming up with special incentive and treatment for all those customers attaining a $50000 deposits and above. Some of the personalized pricing for such customer is their ability to get discounts for hotels, restaurant and airport lounge, unlike other customers. (Conrad, 2016) From statistics, the demand for the CIMB services is very high. The company has over 180 branches now, and this is a clear indication that the bank is fast growing with the increasing demand for its services.
Segmentation and targeting are the very important aspect of marketing. In a competitive industry like the banking industry, it’s very important a bank to segment its customers based on factors like demography, geographic and behavioral form of segmentation. The CIMB bank has achieved this by segmenting its markets basing on two factors, which include demographic and psychographic segmentation. The customers to this bank are only those who need Islamic and internet or online banking services. In this case, the target market for the CIMB bank is made up of all consumers who make use of banking and finance services
The CIMB bank concentrates on the provision of innovative and value-adding banking and financial services to its Malaysian customer as well as to its ASEAN customers. They have designed these services to cater for the many and different banking and financial needs for their customers.
The following are the factors that will and have been affecting the CIMB consumer behaviors.
CIMB bank operated under a competitive nature of competition with other few but large firms that offer banking, financial products and services, and services for personal use and business use. It operates under competitive oligopolistic market competition. (LEE, 2004) The company is competing in such a market structure due to its choice of market segmentation and product positioning. Some of its direct and indirect competitors include the following, the kingfish group, kenanga, AmBank group, and Ken trade bank. (Owler, 2018)
Conclusion
It is recommended for CIMB Bank to invest more in research and development (R&D) to ensure that it can continuously provide improved and enhanced banking and finance products/services to its customers. It must also ensure that it comes up with new and innovative products and services which can satisfy the new and contemporary needs of its customers. This would ensure that it can stay ahead of its competition in ASEAN markets.
References
Appannan, S. B. (2013). Customer perception of service quality of commercial banks: A Case Study in CIMB, Malaysia.” . Academic research, 4(5), 459.
Arkan, C. (2018, Dec 5). MICROSOFT IN FINANCIAL SERVICES. Retrieved from Microsoft: https://cloudblogs.microsoft.com/industry-blog/industry/financial-services/the-top-five-things-a-customer-needs-from-their-bank/
Becker, S. A. (2013). CIMB features special preferred customer privileges. The phnom penh, 1-12.
Business dictionary. (2018). Business terms . Business dictionary.
Conrad, J. (2016). trends banks need to know about today’s customers. Foresee, 1-19.
LEE, K. P. (2004). CIMB welcomes competition. The star, 7.
Owler. (2018, Dec 4). CIMB’s Competitors, Revenue, Number of Employees, Funding and Acquisitions. Retrieved from Owler: https://www.owler.com/company/cimb
Seshaiah, V., & Narender, V. (2007). “Factors Affecting Customers’ Choice of Retail Banking. The IUP Journal of Bank Management, IUP Publications, , 34-46.
Smith, C. (2018). What Do Customers Want From Their Banks? Banking.
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