Abstract: State-owned commercial banks are very strong, especially the vigorous vitality brought by the shareholding system reform, which forms a great contrast with the inherent insufficient strength of rural credit cooperatives, thus creating a large gap. Optimizing market segmentation, scientifically defining target markets, and accurately positioning the market have become inevitable choices for rural credit cooperatives to expand their survival space.
Keywords: Market Segmentation; Target Market; Market Positioning
Article Number: 1003-4625(2006)12-0044-02 Classification Number: F832.35 Document Identifier: A
I. Necessity of Target Market Marketing for Rural Credit Cooperatives
(A) The Connotation of Target Market Marketing
Target market marketing refers to enterprises identifying various different buyer groups, selecting one or several as target markets, applying appropriate marketing mixes, concentrating resources to serve the target market, and meeting its needs. Target market marketing proceeds in three steps: first, market segmentation; second, target market selection; third, market positioning. The key is market segmentation. Market segmentation refers to the process where companies divide different consumers into different consumer groups based on differences in consumer needs. Each group after division is a homogeneous segmented market or sub-market. Market segmentation is the prerequisite and foundation for target market selection and market positioning.
(B) Necessity of Target Market Marketing for Rural Credit Cooperatives
Firstly, rural credit cooperatives operate in fragmented blocks and cannot connect their scattered business outlets across the country into an integrated network. Funds cannot be aggregated on a larger scale, and the channels for fund transfers and allocations are not smooth, leading to inherent competitiveness deficiencies. Secondly, effective market segmentation helps rural credit cooperatives know themselves and their competitors. Thirdly, target market selection helps rural credit cooperatives determine their own direction and conduct targeted marketing. Lastly, scientific market positioning clearly positions rural credit cooperatives within the rural financial market.
II. Operational Process of Rural Credit Cooperatives Segmenting the Rural Financial Market
(A) Formulating Market Segmentation Variables
Segmentation variables are the factors that lead to differences in consumer needs, also known as segmentation bases or standards. In market segmentation, segmentation variables are diverse, but not all segmentations are effective. They must be measured in terms of measurability, accessibility, profitability, and feasibility, and a scientific combination of segmentation variables must be chosen to perform market segmentation.
1. Population Density Variable: Population density is the most important component of the market. It is closely related to customer needs for financial products, preferences, usage characteristics, and frequency.
2. Geographic Variable: There are differences in natural, social, and economic conditions between urban and rural areas, which lead to significant differences in financial product choices.
3. Income Variable: Income is a habitual variable for consumer market segmentation, applicable to almost all service industries, including finance. According to the income status of customers in the rural financial market, high, medium, and low tiers can be established.
4. Occupational Variable: A person's occupation can influence their spending patterns. Important occupational types in the rural financial market include farmers, administrative staff, township enterprises, and individual merchants.
5. Educational Level Variable: Different knowledge levels result in different financial awareness and personalized and selective needs for financial services. Rural credit cooperatives should provide personalized and tailored financial services for them.
6. Age Variable: Different age groups have different spending patterns.
7. Lifestyle Variable: Lifestyle refers to specific habits and preferences regarding consumption, work, and entertainment. People pursuing different lifestyles will have different preferences and needs for financial products.
8. Opportunity Variable: Different opportunities create different funding needs, and customer needs for funds have temporal regularities.
9. Benefit Variable: Customers seek different benefits when using financial products.
(B) Determining Market Segmentation Method
There are many methods of market segmentation. Common ones include: dominant factor enumeration method, single factor method, multi-factor enumeration method, and series factor method. The single factor method involves selecting only one factor to segment the market, suitable for markets where a need is significantly influenced by one factor. The dominant factor enumeration method refers to finding and confirming the dominant factor among numerous influencing factors when segmenting the market with two or more factors, then organically linking it with other factors to determine the segmented market. The multi-factor enumeration method is used when the market is influenced by multiple factors and it's difficult to identify the dominant factor. The series factor method is suitable when there are two or more factors, following a certain order to sequentially segment the market. First, segment according to the most important factor, then based on that, segment according to the second influential factor, and so on until an appropriate market is segmented. Clearly, the series factor method is more suitable for rural credit cooperatives segmenting the rural financial market.
(C) Implementing Market Segmentation
According to the series factor method, we analyze each segmentation variable based on its importance to find sub-markets suitable for rural credit cooperatives. Below is a detailed segmentation variable table:
From the above table, we can analyze as follows: Based on urban and rural variables, the rural financial market can be divided...
This article originates from the concept of job planning.