Abstract

Marketing segmentation is widely used for targeting a smaller group of market in consumer product industry, and is useful for decision makers to effectively focus on their consumers’ purchasing behavior based on one marketing mix. In order to have a better understanding of the relationship between marketing segmentation in conventional business field and data science field, marketing segmentation is introduced from the perspectives of business and data science in this paper. In addition, on the basis of the introduction of both methods, conclusion can be drawn that data science methods are used in marketing segmentation as an assistance to present more precise output, based on the theory generated in business practice.

Highlights

  • Consumers have their own behavior patterns with different demands

  • There are specific factors like age, reactions toward discount and regions, which can divide those customers into different groups, later marketers can partition market based on those factors, and this is the prototype of marketing segmentation

  • Data science methods such as machine learning methods are widely used in business field, the results can be more precise, and the money and human resources can be saved and reallocated

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Summary

INTRODUCTION

Consumers have their own behavior patterns with different demands. Market segmentation can be described as the process of partitioning a large market into the smaller groups or clusters of customers [2]. Each group gathers consumers with similar behaviors and marketing segmentation strategy can be cultivated through business and data science method. Consumer market segmentation divides market into small groups by using different variables, including geographical, demographic, behavior, psychographic variables. To better fit a business oriented market segmentation, market can be divided through three variables, namely geography, consumer type and buyer behavior. There is no doubt that market segmentation can increase the efficiency and specificity for business. The actions taken after market segmentation can let consumers realize the importance that businesses attach to them

Geographical segmentation
Demographic segmentation
Behavior segmentation
Psychographic segmentation
Business Oriented Market Segmentation
MARKET SEGMENTATION BY USING ALGORITHMS
Decision Tree
K-means Clustering
DISCUSSION
CONCLUSION

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