Use of factor analysis and cluster analysis in market segmentation and consumer typology

Date of publication: June 15, 1969

Author: Klaus Ragnitz

Abstract:

For the two segmentation models, factor analysis and cluster analysis, general assessment criteria are laid down and the marketing view-point is singled out as the most important. In particular the paper deals with the two segmentation methods with regard to the consequences for interpretation inherent in the model. A practical example in the sphere of housekeeping is used to demonstrate a way of determining attitude types using both cluster analysis and factor analysis. Three principles of type allocation are proposed. This also provides a method of estimating the proportions of the consumer population belonging to the various types. It is stressed that both methods are able to provide valuable information for marketing.

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