Cutting Edge Marketing Analytics: Real World Cases and Data Sets for Hands On Learning

3. Cluster Analysis for Segmentation

Introduction

We all understand that consumers are not all alike. This provides a challenge for the development and marketing of profitable products and services. Not every offering will be right for every customer, nor will every customer be equally responsive to your marketing efforts. Segmentation is a way of organizing customers into groups with similar traits, product preferences, or expectations. Once segments are identified, marketing messages and in many cases even products can be customized for each segment. The better the segment(s) chosen for targeting by a particular organization, the more successful the organization is assumed to be in the marketplace. Since its introduction in the late 1950s, ...