Researchers typically focus on the cluster analysis component of market segmentation. However, for segmentation to be successful, one must follow all of the steps of the analytic process, which include: 1) clustering, 2) statistically testing the clusters, and 3) profiling the clusters to determine if they satisfy the segmentation objectives.
Part two of this two-part series on segmentation will:
- Detail the most frequently proposed clustering procedures
- Describe methods for statistically evaluating the clusters
- Discuss the pros and cons of various clustering techniques in the context of identifying actionable segments.
If you are interested in achieving successful best practices across the entire analytical process, you need to read this white paper.