Market segmentation in the Indonesian banking sector: the relationship between demographics and desired customer benefits

The recent economic turmoil in Indonesia has hit the financial service sector hard. Consumer confidence in banks is low and institutions are having to work harder than ever to recruit and retain their customers. In this article the potential for banks to utilize benefit segmentation to assist them in this context is explored. It will be argued that for benefit segmentation to offer any real utility in this context, a link must be found between benefits and general observable characteristics, such as demographics. To ascertain whether such a link exists, a primary study of 1,000 individuals was conducted in the city of Bengkulu, Southwest Sumatra. As the results will show, while discrete bundles of benefits were identified, they would appear generally unrelated to consumer demographics.