Posted by admin | Posted in Marketing Segmentation | Posted on 10-02-2012
Cluster analysis and marketing segmentation are two methods used while researching complex markets. As the words mention, both of them are about segregating markets into phases and then taking each as it comes. These techniques help study parts in depth, which can then be put together for a complete inference.
Know first what cluster analysis marketing and marketing segmentation are.
Clustering involves grouping similar objects including cases, points, observations, examples, members, customers, patients and locations. The process involves a set of data-driven partitioning techniques designed to group a collection of objects into clusters. The parameters on which clusters are formed are the degree of association or similarity between members of the same clusters and different clusters as well.
Clustering involves data exploration conducted in repetitive fashion. It is not single grouping, but a cumulative process of getting well interpretable groups of objects under consideration.
Misinterpreting supervised classification, discriminant analysis, segmentation by specialty and response rate and results of a query for cluster analysis marketing would be improper.
Marketing Segmentation is one of the most fundamental strategic marketing concepts. It helps group people given their similarity in several dimensions related to a particular product under consideration. Segmenting markets helps predict the needs of customers and improve profitability.
Together, cluster analysis marketing and marketing segmentation help serve many a common purpose.
Marketing professional and researchers use them to discover distinct groups in their customer bases and use the given knowledge to develop targeted marketing programs. The techniques help identify groups of respondents to minimize differences among members of the same group besides maximizing differences between dissimilar groups.
Cluster analysis is the technique used to club similar variables and dissimilar variables under their own separate categories. Marketing segmentation is used for segmenting different and similar variables.
Both are different. Yet both serve a common purpose, helping divide complicated markets into simple structures.