Market Segmentation Research Articles

Labour market segmentation and the gender wage gap in Spain

PurposeThe purpose of this study is to analyse the gender wage gap (GWG) in Spain adopting a labour market segmentation approach. Once we obtain the different labour segments (or idiosyncratic labour markets), we are able to decompose the GWG into its observed and unobserved heterogeneity components.Design/methodology/approachWe use the data from the Continuous Sample of Working Lives for the year 2021 (matched employer–employee [EE] data). Contingency tables and clustering techniques are applied to employment data to identify idiosyncratic labour markets where men and/or women of different ages tend to match/associate with different sectors of activity and occupation groups. Once this “heatmap” of labour associations is known, we can analyse its hottest areas (the idiosyncratic labour markets) from the perspective of wage discrimination by gender (Oaxaca-Blinder model).FindingsIn Spain, in general, men are paid more than women, and this is not always justified by their respective attributes. Among our results, the fact stands out that women tend to move to those idiosyncratic markets (biclusters) where the GWG (in favour of men) is smaller.Research limitations/implicationsIt has not been possible to obtain remuneration data by job-placement, but an annual EE relationship is used. Future research should attempt to analyse the GWG across the wage distribution in the different idiosyncratic markets.Practical implicationsOur combination of methodologies can be adapted to other economies and variables and provides detailed information on the labour-matching process and gender wage discrimination in segmented labour markets.Social implicationsOur contribution is very important for labour market policies, trying to reduce unfair inequalities.Originality/valueThe study of the GWG from a novel labour segmentation perspective can be interesting for other researchers, institutions and policy makers.

A novel framework for analyzing the impact of COVID-19 on entrepreneurial financial firms in Jordan

PurposeCOVID-19 has rendered many firms' business models, strategies and performance vulnerable, including entrepreneurial financials. Some managed to survive, while others drowned in the epidemic swamp. This study offers an exceptional model to fill the gap.Design/methodology/approachEmploying a rigorous qualitative design, the study utilizes a novel framework that integrates institutional theory (IT) and corporate entrepreneurial strategy (CES). Semi-structured interviews were conducted, and thematic analysis identified key themes: external environment, institutional environment and organizational response, CES and performance and survival.FindingsThe study reveals the dual nature of the external and institutional environment, acting as both facilitators and barriers for entrepreneurial financial firms (EFFs). It highlights the robust CES exhibited by these firms during the pandemic, demonstrating their adept balancing and integration of different CES components in their organizational response. The EFFs employ a mix of financial and nonfinancial indicators for performance assessment, yielding varied outcomes based on contextual factors.Practical implicationsEFFs and stakeholders are guided to adapt their business models, balance institutional pressures, implement CES and evaluate performance. It advocates collaboration within the entrepreneurial finance ecosystem and leveraging opportunities emerging from the pandemic, including new market segments, technologies, innovations and regulatory changes.Originality/valueThis topic is underexplored in many emerging economies. Fresh perspectives and rigor frameworks are developed on how EFFs navigate and capitalize on the pandemic under uncertainties.

An inversion-based clustering approach for complex clusters

BackgroundThe choice of an appropriate similarity measure plays a pivotal role in the effectiveness of clustering algorithms. However, many conventional measures rely solely on feature values to evaluate the similarity between objects to be clustered. Furthermore, the assumption of feature independence, while valid in certain scenarios, does not hold true for all real-world problems. Hence, considering alternative similarity measures that account for inter-dependencies among features can enhance the effectiveness of clustering in various applications.MethodsIn this paper, we present the Inv measure, a novel similarity measure founded on the concept of inversion. The Inv measure considers the significance of features, the values of all object features, and the feature values of other objects, leading to a comprehensive and precise evaluation of similarity. To assess the performance of our proposed clustering approach that incorporates the Inv measure, we evaluate it on simulated data using the adjusted Rand index.ResultsThe simulation results strongly indicate that inversion-based clustering outperforms other methods in scenarios where clusters are complex, i.e., apparently highly overlapped. This showcases the practicality and effectiveness of the proposed approach, making it a valuable choice for applications that involve complex clusters across various domains.ConclusionsThe inversion-based clustering approach may hold significant value in the healthcare industry, offering possible benefits in tasks like hospital ranking, treatment improvement, and high-risk patient identification. In social media analysis, it may prove valuable for trend detection, sentiment analysis, and user profiling. E-commerce may be able to utilize the approach for product recommendation and customer segmentation. The manufacturing sector may benefit from improved quality control, process optimization, and predictive maintenance. Additionally, the approach may be applied to traffic management and fleet optimization in the transportation domain. Its versatility and effectiveness make it a promising solution for diverse fields, providing valuable insights and optimization opportunities for complex and dynamic data analysis tasks.

Customer Classification by Past Purchase Data Analysis

Customer categorization is an essential strategy for companies seeking to maximize their advertising spend. Businesses can boost client involvement and sales rates of conversion substantially by identifying specific customer segments, tailoring products or services to their preferences, minimizing the hassle of irrelevant advertisements, and increasing customer satisfaction, resulting in improved long-term interactions with clients. This paper presents a classification model that uses Keras and support vector machine stacked classification passed on to a meta-learner to predict the customer segment, and RFM analysis is performed to identify the customer segment. This focused strategy lowers marketing costs and boosts income, increasing the business's efficiency. Temporal mining helps us predict the next purchase of a customer using a time series model.

Harnessing artificial intelligence to develop strategic marketing goals

In today's rapidly evolving business landscape, harnessing artificial intelligence (AI) has become imperative for organizations striving to remain competitive. This concept paper explores the integration of AI in developing strategic marketing goals, aiming to provide a comprehensive framework for leveraging AI's capabilities effectively. The paper begins by outlining the current state of AI in marketing, highlighting its transformative potential across various facets such as customer segmentation, personalized targeting, predictive analytics, and automation. It underscores the necessity for businesses to embrace AI-driven approaches to stay ahead in an increasingly data-driven marketplace. Moreover, the concept paper delves into the strategic implications of AI adoption in marketing. It emphasizes the need for alignment between AI initiatives and overarching business objectives, emphasizing the role of AI in enhancing customer experience, optimizing resource allocation, and driving revenue growth. Furthermore, the paper addresses key considerations and challenges associated with integrating AI into marketing strategies, including data privacy concerns, ethical implications, and organizational readiness. It advocates for a structured approach to AI implementation, encompassing robust data governance, talent acquisition, and continuous monitoring to mitigate risks effectively. Drawing upon industry best practices and case studies, the concept paper elucidates practical methodologies for leveraging AI in setting strategic marketing goals. It emphasizes the importance of data-driven decision-making, iterative experimentation, and agile adaptation to capitalize on AI's potential for driving innovation and competitive advantage. In conclusion, the concept paper advocates for a proactive stance towards embracing AI in marketing strategy formulation. By strategically harnessing AI's capabilities, organizations can not only enhance their marketing effectiveness but also cultivate long-term sustainable growth in today's dynamic business environment. Keywords: AI, Strategic, Marketing, Environment, Goals, Business.

Penerapan Strategi Pemasaran Pada Produk UKM Keripik Pare di Kecamatan Pasekan Kabupaten Indramayu

The need for healthy food is increasing along with population growth and increasingly limited agricultural land. However, many snack foods on the market contain additional ingredients that can be harmful to health. Therefore, healthy and nutritious snack products are increasingly needed. One interesting alternative is bitter melon chips, which are a snack product made from bitter melon, a plant that has high nutritional value. In an effort to publicize and market bitter melon chips, a business called Keripik Pare was founded by a group in West Java. The business proposal includes business ideas, capital, production planning, and marketing strategies to increase product competitiveness and business profitability and uses structured and effective implementation methods to produce quality products. By implementing SWOT analysis and the canvas business model, it is hoped that you will be able to identify business strengths, weaknesses, opportunities and threats, and design the right business strategy. In addition, the marketing strategy used includes market segmentation, determining market targets, and appropriate product placement. Through this effort, it is hoped that it can increase public awareness of the importance of consuming healthy food, create new jobs, and increase the income of local farmers.

Compensating Service Failures: The Moderating Role of Customers’ Political Ideology

When service failure occurs, the service provide often dispenses compensation to manage customer relations. However, little research has studied who accepts larger or smaller compensation amounts. Presently, we use political ideology as a basis to segment customers. Drawing on prior work on System Justification Theory, we hypothesize that politically conservative customers accept a lower amount of compensation than liberals as conservative customers more likely believe that whatever amount the service provider offers is just and fair. Importantly, we propose that the effects are specific to economic conservatives, not social conservatives. The findings are consistent with our predictions, with (economic) conservatives’ customers’ system justification beliefs serving as a mechanism. Theoretically, our work is the first to examine who accepts different levels of compensation while also broadly suggesting that political ideology is an important customer segmentation basis in the tourism and hospitality sectors. Our work also contributes to the literature on political ideology by being one of the first to empirically tease apart the distinct effects of economic and social conservatism.

Examining the impact of pharmacist professionalism and celebrity endorsers on dietary supplement purchase intention: the moderating role of product knowledge

Purpose This study aims to explore how consumers’ purchase intentions concerning dietary supplements are affected by two pivotal factors: pharmacist professionalism and celebrity endorser attractiveness. In addition, this study investigates the moderating role of consumers’ awareness of product knowledge about dietary supplements in the relationship between brand trust and purchase intention. Design/methodology/approach The research data was collected through online questionnaires from a convenience sample of 340 individuals residing in Taiwan. The research model, consisting of four hypotheses, was formulated based on a literature review. The partial least squares structural equation modeling technique was used for data analysis. Findings The findings indicate positive effects of both pharmacist professionalism and celebrity endorser attractiveness on dietary supplement brand trust. The results also suggest a significant impact of brand trust on purchase intention. Finally, product knowledge significantly moderates the relationship between brand trust and purchase intention. Practical implications The findings from this study provide valuable insights for marketers, pharmacists and practitioners about the drivers of consumers’ dietary supplement purchase behavior. It will enable marketers to develop better strategies for the dietary supplement market segment. Originality/value This paper has made a significant contribution to the understanding of consumer buying intentions toward dietary supplements, addressing a gap in the literature. First, unlike previous research, this study considers both pharmacist professionalism and celebrity endorser attractiveness in the research model, effectively bridging this gap. Furthermore, this study identifies the pivotal role of brand trust as a critical factor in enhancing consumers’ purchase intentions toward dietary supplements, offering valuable insights for dietary supplement companies regarding consumer purchase decision-making.

Serving the unserved: a market segmentation, price discrimination based customer-centeric approach to home loans in india

The housing finance sector in India has witnessed remarkable growth in recent years, yet a significant portion of the population remains excluded from accessing formal home loan facilities. This master thesis report aims to address this gap by proposing a customer-centric approach to home loans, utilizing market segmentation and price discrimination strategies to serve the unserved segment of the market effectively. The study begins by identifying the need to bridge the gap in home loan accessibility and explores the reasons behind the exclusion of certain demographic groups. Through a comprehensive literature review, the report examines existing research on home loans, market segmentation, price discrimination, and customer-centric approaches in the financial services industry. The research methodology employed in this study utilizes a mixed-methods approach, combining qualitative and quantitative techniques to gather insights into the preferences, challenges, and perceptions of potential home loan borrowers. A carefully designed sampling plan ensures the representativeness and reliability of the data collected. Data analysis reveals patterns and trends within the home loan market, shedding light on the effectiveness of different segmentation and pricing strategies in reaching the unserved population. The questionnaire used for data collection is provided in the report, along with a discussion of the limitations, challenges, and barriers encountered during the research process. In conclusion, the report summarizes key findings and recommends strategies for policymakers, financial institutions, and other stakeholders to enhance inclusivity and efficiency in the home loan sector. By adopting a customer-centric approach and leveraging market segmentation and price discrimination techniques, the goal of serving the unserved can be achieved, contributing to greater financial inclusion and societal welfare.

Challenges and Recommendations for the Pension Tourism Market in the Era of Internet Plus

With the rise of "Internet Plus", the integration of the pension industry and the tourism market is facing unprecedented challenges while also presenting boundless opportunities. This study aims to explore the underlying motivations, analyze the difficulties encountered in the development of the pension tourism market, and put forward countermeasures. Moreover, the operation mode and promotion mode of the pension tourism market in the era of the "Internet Plus" are analyzed in this research through the combination of supply-demand analysis, literature review, and case analysis. The result shows that the changes in Internet technology and market demand pose challenges to the traditional pension tourism market; however, they also provide new opportunities for industry integration and market segmentation. Our research conclusion emphasizes that the industry needs to cultivate talent, introduce intelligent management, strengthen personalized services, simplify service processes, and protect information security to adapt to the changes in the Internet era so as to achieve sustainable development.

Understanding Hotel Employees’ Perceptions of Guests with Disabilities in Ho Chi Minh City, Vietnam

While previous research has mainly concentrated on understanding the requirements of guests with disabilities, there is a notable gap in exploring the perspectives held by hotel employees. This study endeavors to address this research gap by investigating how hotel employees in Ho Chi Minh City (HCMC) perceive guests with disabilities. Employing a mixed-methods approach, this research seeks to uncover employee attitudes and knowledge, their roles in fostering inclusivity, and the significance of communication between management and staff in elevating service quality. Notably, the study’s key findings underscore a significant link between employee contentment and customer satisfaction within hotels in HCMC, underscoring the pivotal role of effective communication in enhancing service quality. The research’s most prominent discovery indicates that a substantial proportion of hotel staff (88.5%) strongly agree on the importance of providing accessibility for guests with disabilities, as evident from the outcomes of the online survey. This outcome demonstrates a commendable high level of awareness among hotel employees concerning the specific needs of customers with disabilities. In terms of hotels’ overarching outlook towards guests with disabilities, a majority of managers voiced the perspective that hotels do not actively focus on disabled guests as a distinct market segment. These findings provide invaluable insights that can guide hotel managers and employees, contributing to a more comprehensive comprehension of how to establish an inclusive environment within the hospitality industry.

Life cycle assessment of the production of an extruded dog food in Brazil

Sustainability is the current focus of the scientific community, governments, and companies in various market segments, such as pet food. Pet food production has increased rapidly in recent years, with a trend toward the development of environmentally friendly products and processes. The first step in creating strategies for mitigating environmental impacts is to assess key points in manufacturing processes. Given this, this study aimed to perform a life cycle assessment (LCA) to estimate the environmental impacts associated with the formulation, production, and distribution phases of an extruded dog food produced in Brazil. System boundaries were from cradle-to-gate, encompassing extraction of raw materials, transportation, processing, production, packaging, and distribution. Estimates were based on the amount of food required to meet the energy requirements for maintenance of a 10 kg dog (functional unit = 2.59 MJ day−1, reference flow = 177.3 g day−1). Environmental impacts were calculated by the environmental footprint method (EF 3.0 v. 1.00) using SimaPro software (v. 9.1.1.1). Product ingredients and packaging materials were modeled under Brazilian conditions using ecoinvent 3.7.1 and Agri-footprint 5.0 databases. Data regarding transportation, processing, distribution, electric and thermal power generation, water usage, and waste generation were obtained from the company's records (2019–2020). In this study, as expected, formulation was the most relevant factor, accounting for 70%–90% of the total environmental impacts. The main impact categories were terrestrial and marine eutrophication, acidification, particulate matter, and climate change (80% of total impacts). Production of the evaluated dog food was associated with the emission of 88.73 kg CO2 eq year−1 or 1.37 kg CO2 eq kg−1 distributed food. The use of animal meals (poultry by-product meal and meat and bone meal) and vegetable by-products (wheat bran and rice bran) contributed to reducing environmental impacts. Therefore, in this study, ingredient selection was considered the most important factor in mitigating the environmental impacts of pet foods. As the overall impact of the formulation depends on data on the use stage, such as nutrient excretion after consumption, future studies should adopt a cradle-to-grave approach for a better comprehension of the feasibility of applying animal and vegetable by-products in the eco-design of pet food products.

Analysis of Consumer Buying Behavior for Beauty Brands in Amravati City

This research report sought to understand the process by which consumers select cosmetic products. In order to gather information for this study, which was carried out in Amravati City, 100 respondents were surveyed. The personal care industry has enormous unrealized potential and is vital to the country's economy. One of the biggest consumer industries in the nation is the personal care industry. Large companies have established themselves in this market over the past few years as a result of the Indian consumer's rising purchasing power and disposable income, which has driven the industry's phenomenal growth. During the data analysis phase, it was discovered that the majority of respondents were female and that the majority of them had purchased beauty items to apply on their faces. It was discovered that the majority of respondents had chosen different brands of cosmetics and it was discovered that the price aspect was what drove consumers to purchase their cosmetic items. It was observed that the Permanent Store was where the responders were buying their cosmetics. To increase sales, the business should concentrate on serving housewives and professionals and draw in more customers, the company should expand its line of male beauty products, boost the amount of herbal ingredients, and run aggressive advertisements including celebrity endorsements. A corporation should evaluate its historical financial performance and develop marketing and business plans to strengthen its brand and expand its market segments in accordance with consumer demands. Thus, this study contributes to our understanding of the constantly shifting preferences and buying habits of the female market for beauty products. We can therefore conclude that in order to encourage female clients to purchase beauty products, retailers need specifically target them.

Charting the Sustainable Course: Navigating the Saudi Arabia Medical and Wellness Tourism Roadmap with Business Model Canvas (BMC)

Medical and wellness tourism has emerged as a pivotal sector with significant economic implications globally, especially after the COVID-19 pandemic. This study delves into the landscape of Saudi Arabia’s medical and wellness tourism, recognizing its importance as a key player in the tourism industry. The study aims to elevate this sector to new heights on the global stage by employing the Business Model Canvas (BMC) as a strategic tool. BMC allows for a comprehensive analysis of the medical tourism industry in Saudi Arabia, breaking down key elements across its nine blocks: key partners, key activities, key resources, value propositions, customer segments, channels, customer relationships, cost structure, and revenue streams. The results of this study shed light on the unique selling proposition (USP) as a crucial strategic step for Saudi Arabia to distinguish itself and enhance its position in the international medical tourism arena. By identifying and maximizing the unique aspects within each BMC block, the study presents a roadmap for Saudi Arabia, navigating the challenges and capitalizing on the potential of the medical and wellness tourism sector. This research serves as a guide, emphasizing the strategic importance of a well-defined business model to shape the future of medical and wellness tourism in Saudi Arabia and establish a prominent global presence.

Explaining why increases in generic use outpace decreases in brand name medicine use in multisource markets and the role of regulation.

Healthcare systems worldwide face escalating pharmaceutical expenditures despite interventions targeting pricing and generic substitution. Existing studies often overlook unwarranted volume increases in multisource markets due to differential physician perceptions of brand name and generics. This study aims to explain the outpacing of generic medicine use over brand name use in multisource markets and assess the regulatory role, specifically examining the impact of reference pricing on volume and intensity increases. Analyzing German multisource prescription medicine markets from 2011 to 2014, we evaluate regulatory mechanisms and explore whether brand name and generic medicines constitute separate market segments. Using an Oaxaca-Blinder decomposition approach, we divide the differential in brand name versus generic medicine use rates into market structure and unobserved segment effects. Generic use rates surpass same-market brand name substitution by 3.87 prescriptions per physician and medicine, on average. Reference pricing mitigated volume increase, treatment intensity and expenditure. Disparities in quantity and expenditure dynamics between brand name and generic segments are partially explained by market structure and segment effects. Generic medicine use effectively reduces expenditures but contributes to increased net prescription rates. Reference pricing may control medicine use, but divergent physician perceptions of brand name and generics, revealed by identified segment effects, call for nuanced policy interventions.

Evaluating consumer preferences for reduced cooking time, taste and colour of beans in rural and urban communities in Uganda

BackgroundCommon bean breeders strive to deliver farmer- and consumer-preferred varieties that are well-adapted to distinct production environments, changing markets and end uses. However, there is information gap on the key traits that customers prefer and are willing to pay for. This paper examined the preferences and willingness to pay for reduced cooking time and other selected traits in the Ugandan bean markets using a choice experiment data elicited from 1152 urban and rural bean consuming households. A latent class model was used to assess preferences and the willingness to pay for reduced cooking time.ResultsResults indicated that taste, cooking time, bean swelling on cooking, and grain color were the preferred attributes in decreasing order among non-bean-producers. About 72% of the urban consumers were willing to pay 41 shillings, 53 shillings and 42 shillings above prices for reduction in cooking time from 120 (status quo) to 90, 75, and 60 min, respectively. For consumers who also grow their beans for food and surplus for sale, reduced cooking time is important but not as much as yield and climate resilience. The study identified four distinct customer segments—two among bean-producing households and two among non-bean-producing households. Gender, education, level of altruism/openness to change, household economic status, and price sensitivity were the major factors influencing segment membership.ConclusionsThe study findings demonstrated that breeding to reduce cooking time will generate a significant social savings in terms of less cooking fuel, water and time, but cooking time ought to be considered alongside other attributes preferred by consumers and farmers to succeed. Results also suggest that women urban consumers attach more importance to higher levels of intrinsic traits (non-visible but experienced by consumers) compared to men—thus promotional campaigns popularizing new varieties should target women to stimulate demand.

Quantitative assessment of customer segment, value proposition and appropriateness of minimum viable product features for technology commercialization in the environmental sciences

Transitioning fundamental and applied science to evidence-based real-world applications is challenging yet necessary, especially in environmental sciences. In this paper, a quantitative data analysis method is presented to support decision-making by augmenting qualitative customer discover methods used for new technology adoption. This method can be used to assess: i) customer segment (CS) and value proposition (VP) validity and ii) the ability of a new technology to address the VP. Two different environmental technologies were evaluated to demonstrate this quantitative approach. CS and VP(s) that were previously qualitatively identified were statistically (in)validated using binomial testing. In each of the presented cases, the CS was statistically validated but only one of the three VPs for each case was validated. The validated performance parameters for each technologywere tested against cost and performance data using linear optimization. This testing allowed for the identification of conditions under which the technology met minimum customer performance requirements and where further data or technology modifications were still needed. These identified conditions establish the features necessary to transition the technologies to the minimum viable product (MVP) phase of commercialization. One technology was found to be ready for MVP development while the other technology needed additional data and modification. Both findings demonstrate the effectiveness of this quantitative data analysis method and guide decision-making in the early stages of technology commercialization.

Exploring adolescent girls and young women's PrEP-user profiles: qualitative insights into differentiated PrEP delivery platform selection and engagement in Cape Town, South Africa.

Adolescent girls and young women (AGYW), a priority population for HIV prevention in Africa, show high interest but difficulty in sustained effective use of pre-exposure prophylaxis (PrEP). With ongoing PrEP scale-up focused on increasing access, it is important to understand what influences AGYW's choice of PrEP delivery platforms. The POWER implementation study in Cape Town provided PrEP between 2017 and 2020 to AGYW (16-25 years) from four differentiated delivery platforms: mobile clinic, government facility, courier delivery or community-based youth club. Healthcare providers at government and mobile clinics provided PrEP (initiation and refills) as part of comprehensive, integrated sexual and reproductive health services. Courier and youth club platforms provided light-touch PrEP refill services incorporating rapid HIV self-testing. We conducted in-depth interviews with a purposive sample of AGYW who had ≥3 months of PrEP-use and accessed ≥2 PrEP delivery platforms. The thematic analysis explored AGYW's preferences, decision-making and habits related to PrEP access to inform market segmentation. We interviewed 26 AGYW (median age 20) PrEP-users between November 2020 and March 2021. AGYW PrEP-users reported accessing different services with, 24 accessing mobile clinics, 17 courier delivery, 9 government health facilities and 6 youth clubs for their PrEP refills. Qualitative findings highlighted four potential behavioural profiles. The "Social PrEP-user" preferred PrEP delivery in peer spaces, such as youth clubs or adolescent-friendly mobile clinics, seeking affirmation and social support for continued PrEP use. The "Convenient PrEP-user" favoured PrEP delivery at easily accessible locations, providing quick (courier) or integrated contraception-PrEP refill visits (mobile and government clinic). The "Independent PrEP-user" preferred PrEP delivery that offered control over delivery times that fit into their schedule, such as the courier service. The "Discreet PrEP-user" highly valued privacy regarding their PrEP use (courier delivery) and avoided delivery options where unintentional disclosure was evident (youth club). Comfort with HIV self-testing had minimal influence on PrEP delivery choice. Market segmentation of AGYW characterizes different types of PrEP-users and has the potential to enhance tailored messaging and campaigns to reach specific segments, with the aim of improving sustained PrEP use and HIV prevention benefits.

A Theory of Monopolistic Competition with Horizontally Heterogeneous Consumers

Our novel approach to modeling monopolistic competition with heterogeneous firms and consumers involves spatial product differentiation, in either a geographical space or a space of characteristics. In addition to price, each firm chooses location in space. We formulate conditions for positive sorting—more-productive firms serve larger market segments and face tougher competition—and for existence and uniqueness of equilibrium. To quantify the role of sorting, we calibrate the model using haircut market data and perform counterfactual analysis. Inequality in gains among consumers caused by positive market shocks can be substantial: gains for consumers at more-populated locations are three to four times higher. (JEL D11, D24, D43, L13, L84)

Data-driven strategies for digital native market segmentation using clustering

The rapid growth of internet users and social networking sites presents significant challenges for entrepreneurs and marketers. Understanding the evolving behavioral and psychological patterns across consumer demographics is crucial for adapting business models effectively. Particularly, the emergence of new firms targeting adolescents and future generations underscores the importance of comprehending online consumer behavior and communication dynamics. To tackle these challenges, we introduce a Machine Learning-based Digital Native Market Segmentation designed to cater specifically to the interests of digital natives. Leveraging an open-access prototype dataset from social networking sites (SNS), our study employs a variety of clustering techniques, including Kmeans, MiniBatch Kmeans, AGNES, and Fuzzy C-means, to uncover hidden interests of teenage consumers from SNS data. Through rigorous evaluation of these clustering approaches by default parameters, we identify the optimal number of clusters and group consumers with similar tastes effectively. Our findings provide actionable insights into business impact and critical patterns driving future marketing growth. In our experiment, we systematically evaluate various clustering techniques, and notably, the Kmeans cluster outperforms others, demonstrating strong segmentation ability in the digital market. Specifically, it achieves silhouette scores of 63.90% and 58.06% for 2 and 3 clusters, respectively, highlighting its effectiveness in segmenting the digital market.