IDEAS home Printed from https://ideas.repec.org/a/ora/journl/v1y2013i1p1786-1796.html
   My bibliography  Save this article

Segmentation Of Sme Portfolio In Banking System

Author

Listed:
  • Namolosu Simona Mihaela

    (Academy of Economic Studies, Bucharest; Marketing Faculty, Marketing Faculty)

Abstract

The Small and Medium Enterprises (SMEs) represent an important target market for commercial Banks. In this respect, finding the best methods for designing and implementing the optimal marketing strategies (for this target) are a continuous concern for the marketing specialists and researchers from the banking system; the purpose is to find the most suitable service model for these companies. SME portfolio of a bank is not homogeneous, different characteristics and behaviours being identified. The current paper reveals empirical evidence about SME portfolio characteristics and segmentation methods used in banking system. Its purpose is to identify if segmentation has an impact in finding the optimal marketing strategies and service model and if this hypothesis might be applicable for any commercial bank, irrespective of country/ region. Some banks are segmenting the SME portfolio by a single criterion: the annual company (official) turnover; others are considering also profitability and other financial indicators of the company. In some cases, even the banking behaviour becomes a criterion. For all cases, creating scenarios with different thresholds and estimating the impact in profitability and volumes are two mandatory steps in establishing the final segmentation (criteria) matrix. Details about each of these segmentation methods may be found in the paper. Testing the final matrix of criteria is also detailed, with the purpose of making realistic estimations. Example for lending products is provided; the product offer is presented as responding to needs of targeted sub segment and therefore being correlated with the sub segment characteristics. Identifying key issues and trends leads to further action plan proposal. Depending on overall strategy and commercial target of the bank, the focus may shift, one or more sub segments becoming high priority (for acquisition/ activation/ retention/ cross sell/ up sell/ increase profitability etc.), while others (risky/ non-profitable etc.) may be left aside. This entire shift in strategy is considering also growth potential per sub segment. Examples are provided for different strategies considering growth potential of each sub segment.

Suggested Citation

  • Namolosu Simona Mihaela, 2013. "Segmentation Of Sme Portfolio In Banking System," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 1786-1796, July.
    • Handle: RePEc:ora:journl:v:1:y:2013:i:1:p:1786-1796
    as

    Download full text from publisher

    File URL: http://anale.steconomiceuoradea.ro/volume/2013/n1/189.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Daniela Rodica Silivestru(Popescu), 2012. "Bank Loans And Small Firm Financing In Romania," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(14), pages 1-15.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hosseini Kashkouyieh , Seyyed Mahmoud & Asadi , Gholam Hossein & Hamidizadeh , Mohammad Reza & Moqaddasi , Mohammad, 2015. "Developing a Macro-segmentation Model at Industry Level: Iranian Banking Industry," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 10(4), pages 95-123, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dan Costin NIȚESCU, 2015. "A new beginning for SMEs development?," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(604), A), pages 39-52, Autumn.
    2. Giuca Simona-Mihaela, 2014. "Identifying Product And Price Strategies For Designing Transactional Banking Packages Addressed To Smes (Considerations)," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 989-997, July.
    3. Giuca Simona-Mihaela, 2014. "Post-Launching Monitoring Activities For New Transactional Banking Products Addressed To Smes (Considerations)," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 998-1004, July.
    4. Agbemebia Akitan & Seydi Ababacar Dieng, 2020. "Bank Financing and Firms Performance in Sub-Saharan Africa: Evidence of Cameroon and Senegal," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 12(5), pages 1-42, May.
    5. repec:agr:journl:v:3(604):y:2015:i:3(604):p:39-52 is not listed on IDEAS

    More about this item

    Keywords

    SME; banking; marketing; strategy; segmentation; lending;
    All these keywords.

    JEL classification:

    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ora:journl:v:1:y:2013:i:1:p:1786-1796. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catalin ZMOLE (email available below). General contact details of provider: https://edirc.repec.org/data/feoraro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.