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Problem

Apply the nested approach to segmentation to a multinational bank.

Step-by-step solution

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Step 1/3

The nested approach to segmentation is a method of dividing a market into smaller groups of consumers with similar needs or characteristics, by first using broad criteria, then successively using more specific criteria to refine the segments.

Step 2/3

The nested approach to a multinational bank:

Step 1: Geographic Segmentation: The bank begins by dividing its customers into geographic segments, based on countries or regions.

Step 2: Demographic Segmentation: Within each geographic segment, the bank segments its customers based on demographic criteria, such as age, income, and education.

Step 3: Psychographic Segmentation: Within each demographic segment, the bank segments its customers based on psychographic criteria, such as values, attitudes, and lifestyle.

Step 4: Behavioral Segmentation: Within each psychographic segment, the bank segments its customers based on behavioral criteria, such as purchase history, brand loyalty, and usage rate.

Step 5: Response Profile Segmentation: Within each behavioral segment, the bank segments its customers based on response profile criteria, such as benefits sought and attitude toward product.

Step 3/3

By using the nested approach to segmentation, the multinational bank can gain a deeper understanding of its customers, and develop targeted marketing strategies that meet their unique needs. This approach allows the bank to better allocate its resources and reach its target customers more effectively. Effective market segmentation is an important step in creating a successful marketing strategy, as it allows a business to target its resources towards the most promising customer groups.