Selecting a Broker or a Brokerage Firm: Segmentation of Investors in the Hong Kong Stock Market

For the purpose of this research investors are treated as consumers and criteria are established for their selection of particular brokers or brokerage firms, thereby providing criteria on which investors in the stock market can also be segmented. This information should aid a better understanding of investor behaviour and requirements and improve the quality of services offered by brokers or brokerage firms. Conversely improved services should encourage more investment. The research included a study of investors′ selection criteria, for example prompt and efficient service, integrity and experience. Initially a sample of 200 investors and 25 brokerage firms were used and interviews and research by questionnaire was undertaken. From this, four segments emerged for types of investor, indicating that they seek different benefits according to their demographic and psychographic backgrounds. These could provide target markets and guidelines for attracting new customers.