Marketing: Customer Segmentation

Improving Marketing Campaign Results from Better Customer Segmentation

Dendogram 3 SegmentsIn this study, customer data from a fictitious Office Supply Company was used to identify criteria used to segment customers based on purchasing behavior and customer descriptors (demographic in the case of consumers and firmographic variables in the case of companies). The output of the model includes the number, size and profile of the needs based market segments as well as differentiation factors among the segments. The graph on the left shows the output from the clustering process (three segments were determined to be ideal, 1, 2, and 3).

The objective of this study is to demonstrate the use of segmentation in the acquisition of new customers through marketing programs that are better designed with offerings and messages that meet these segments shared needs and wants.



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