Abstract: Commercial banks in Kenya and globally have in the recent past faced a myriad of challenges which have eaten into their performance. As a consequence, most have been forced to reduce their work force, reduce their areas of operation or exit completely form the market. To survive, the commercial firms like any other players in a highly competitive marketing environment, have to segment their markets in order to achieve proper targeting. This paper seeks to critically review the influence of customer segmentation strategy on performance of commercial banks with a specific focus to banks in Kenyan market. Kenya has a total of 42 commercial banks, 12 microfinance banks, one mortgage finance company, eight representative offices of foreign banks, 86 foreign exchange bureaus, 14 money remittance providers as well as three credit reference bureaus. With all these financial institutions in Kenya, can we then comfortably say that Kenya is saturated with banks. Some financial experts say that Kenya is over-banked. With a population of 44 million and a total of 42 banks, the competition for customer base must be very high and this explains the disparity in terms of interest rates from one bank to the other.
Keywords: Commercial banks, customer segmentation, competitive marketing.
Title: An overview of the Influence of Customer Segmentation Strategy on Performance of Commercial Banks in Kenya
Author: Evans Silver Kwendo, Dr. Mise Jairo Kirwa, Dr. Ondoro Chairles Omondi
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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