The Segmentation Bases of the Islamic Banks in Indonesia: A Qualitative Analysis

The market shares of several Muslim majority countries' Islamic banks have remained low (e.g., Malaysia, Turkey, and Indonesia) despite many Muslims. Targeted marketing can be an effective strategy to target potential customers, increase the market share, and ultimately Bank's revenue. This study firstly aims to explore potential segmentation bases for the customers of the Islamic Bank and the impact of segmentation analysis on the targeting and positioning of the Islamic Bank. This study applied an exploratory, qualitative research design. The data were collected via in-depth interviews with 30 Muslim participants using purposive sampling. The data were analyzed using inductive content analysis to find the emerged themes. The result shows that the psychographic segmentation would be more plausible to be used by the Islamic Bank than the demographic segmentation. Based on this finding, Islamic banks should consider using psychographic segmentation to target their markets.