New Age Youth Banking Behavior an Explorative Study in the Indian Banking Sector

By Srivatsa, H. S.; Srinivasan, R. | Journal of Services Research, October-March 2008 | Go to article overview
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New Age Youth Banking Behavior an Explorative Study in the Indian Banking Sector

Srivatsa, H. S., Srinivasan, R., Journal of Services Research

The banking scenario in India has witnessed a rapid growth coupled with intense competition. This sector has witnessed rapid technological deployments, intense price wars almost leading to commoditisation of the sector, product innovations, public sector loosing their market share to private banks and ultimately an intense to win over the customers. The study deploys the use of psychographics to study the Indian retail banking customers. This paper is a result of the research conducted by in the state of Karnataka in India and is empirical by nature. The various psychographic customer segments discovered are discussed in the forthcoming sections of this paper.


There have been recent indications from the finance minister of India that Indian banks should go in for mergers in order to have a less number of larger and more efficient banks. For the retail banking scenario, it is also implicit that many banks are competing for the same customer segment and the combined resources being spent in terms of marketing and other efforts may exceed the profitability of the segment targeted at, by the banks put together. It has been observed that the challenges being faced by retail banking sectors have been in the usage of proper segmentation techniques based on customer psychographics.

Customer segmentation takes place at demographic level and at psychographic level. Psychographics in essence tries to study and profile people based on their attitudes, interests, lifestyles and values.

In India there has been a lacuna in terms of psychographic profiling of consumers. Many corporates are conducting such studies; but results are not available for the academic community. The psychographic variables of consumers are always changing and it becomes even more imperative for a continuous longitudinal study to keep track of changes and incorporate them.

Further, the entry of foreign banks that are armed with techniques to profile the customers based on psychographic attitudes may pose a tough competition for the Indian banks.

Some of the bank advertisements put out by large public sector banks in India act more or less like reminders to customers about their large and widespread networks, many products in their portfolio that are clearly a pure quantitative translation of banks strength rather than the real competitive advantage that can be derived out of strategic marketing techniques based on effective segmentation.

Hence it is imperative that psychographic study is conducted on banking customers in India for strategic marketing purposes.

The conceptual relationship between effective profiling and Strategic marketing can be best described in the Figure 1.


In the beginning, we shall introduce the concept of "Psychographics" with a classical definition by Demby (1994) who has coined the term "Psychographics".

Demby has provided a three level comprehensive definition of psychographics.

1. Generally, psychographics may be viewed as the practical application of behavioral and social sciences to marketing research.

2. More specifically, psychographics is a quantitative procedure that is indicated when demographic, socio-economic and user/non-user analysis are not sufficient to explain and predict consumer behavior

3. Most specifically, psychographics seeks to describe the human characteristics of consumers that may have bearing on their response to products, packaging, advertising and public relations efforts.

Such variables may span a spectrum from self -concept and lifestyle to attitudes, interests and opinions, as well as perceptions of products as well self concept and personality traits are used interchangeably.

People's activities, interests, opinions and attitudes, vary approximately as do their related values and this pattern fits the value-attitude-behavior hierarchy hypothesized by Homer and Kahle (1998).

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New Age Youth Banking Behavior an Explorative Study in the Indian Banking Sector


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