Financial Service Strategies: Neglected Niches

Abstract

Companies cannot realize their growth and profit objectives if they fail to fine‐tune their offerings to the needs of neglected market segments. Because market penetration is the least expensive growth strategy, increased efforts directed towards existing customers are on target, but often key implementation activities have been amiss. Some companies have lost sight of the basic tenet of the marketing concept – failing to understand their customers′ unmet needs. Such firms may think they know their customers so well they can simply increase their offerings without examining the unique needs of various customer subsegments. In the retail financial service industry, providers have implemented growth strategies by focusing on their current customer base, which included women and customers over 50 years of age. However, providers failed to recognize the value of these subsegments and did not develop specific tactics to address their financial perceptions and needs. The increased importance of women as financial decision makers along with the proportion of financial assets controlled by consumers over 50 years of age are critical to future growth for the financial services industry. Outlines strategic guidelines for capitalizing on these profitable subsegments and examines implications for organizations which have failed to fine‐tune their strategies.

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