Clustering by product usage

Date of publication: September 1, 1974

Abstract:

Segmentation is one of several multivariate analysis methods which can be applied to market research data; it can be carried out in several ways. This paper discusses briefly some of the possible techniques. The purposes of segmentation which we have experience of are the practical ones of defining marketing objectives, planning campaigns and briefing creatives. We are not interested in statistical 'explanation' as such, but in helping people, often enumerate, to take better decisions. We find segmentation can do this successfully. In discussing techniques we concentrate not on mathematics or programming but on input strategy. We have used clusters created in four different ways, depending on whether we use the whole sample or a special group, and on whether we input descriptive or product data. The example given is from the UK convenience food market, where product data was used on a large sample to create nine clusters. These are described with examples and the use of such data is discussed.

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