Consumer Market Segmentation Adoption and Its Influence on the Performance of Tanzania’s Banking Industry

Abstract

The objective of this study was to establish the influence of market segmentation sometimes referred to market partitioning as a marketing strategy on the banking industry performance, with evidence from the Tanzania Postal Bank (TPB) Bank Plc currently known as the Tanzania Commercial Bank (TCB). Structured questionnaires were used to randomly collect data from 242 Tanzania Postal bank employees. Multiple regression analysis was used to quantitatively analyse data. Findings revealed that all the four constructs of market segmentation have a positive influence of which only three namely demographic, geographic and psychographic constructs significantly influence performance of the bank. The other variable of behavioural construct had a
positive but insignificant influence on the Bank performance. From the findings, it is recommended that effort should be made to segregate markets, based on their demographic, geographic and psychographic characteristics. The banks should then tailor their marketing efforts by considering specific needs for each of the market segments based on those with most influential attributes in each of the significant constructs. This would allow for an effective alignment between Tanzanian banking products and the consumers’ needs and interests.
Keywords: Market segmentation, marketing strategy and bank performance