A Comparison of Alternative Approaches to Cluster-Based Market Segmentation

The common practice of factor analysing data matrices, followed by a clustering or rotated standardised factor scores has recently been questioned by several researchers in marketing.
  

A Comparison of Alternative Approaches to Cluster-based Market Segmentation

Paul E. Green andAbba M. Krieger The Wharton School, University of Pennsylvania

INTRODUCTION

Cluster analysis in marketing research has a long and active history (Green, Frank & Robinson 1967; Green & Rao 1969; Kernan 1968; Morrison 1967). An extensive marketing research bibliography by Dickinson (1990) lists over 400 entries on clustering and related topics such as latent class analysis. Two insightful reviews of cluster analysis in marketing have appeared during the past decade. Punj & Stewarts (1983) review emphasises the centrality of validation in clustering, including...

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