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: HajarHakimi@yahoo.com
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.
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
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