Blog Archives

The New Consumer Requires an Updated Market Segmentation

September 18, 2014
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The New Consumer Requires an Updated Market Segmentation

The new consumer is the old consumer with more options and fewer prohibitions. Douglas Holt calls it the postmodern market defined by differentiation: "consumer identities are being fragmented, proliferated, recombined, and turned into salabl...

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The Ecology of Data Matrices: A Metaphor for Simultaneous Clustering

September 13, 2014
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The Ecology of Data Matrices: A Metaphor for Simultaneous Clustering

"...a metaphor is an affair between a predicate with a past and an object that yields while protesting." Nelson Goodman (1976)It is, as if, data matrices were alive. The rows are species, and the columns are habitats. At least that seems to be the...

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Attention Is Preference: A Foundation Derived from Brand Involvement Segmentation

September 1, 2014
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Attention Is Preference: A Foundation Derived from Brand Involvement Segmentation

"A wealth of information creates a poverty of attention."Herbert SimonWe categorize our world so that we can ignore most of it. In order to see figure, everything else must become ground. Once learned, the process seems automatic, and we forget how har...

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Continuous or Discrete Latent Structure? Correspondence Analysis vs. Nonnegative Matrix Factorization

August 25, 2014
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Continuous or Discrete Latent Structure? Correspondence Analysis vs. Nonnegative Matrix Factorization

A map gives us the big picture, which is why mapping has become so important in marketing research. What is the perceptual structure underlying the European automotive market? All we need is a contingency table with cars as the rows, attributes as the ...

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Extracting Latent Variables from Rating Scales: Factor Analysis vs. Nonnegative Matrix Factorization

August 21, 2014
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Extracting Latent Variables from Rating Scales: Factor Analysis vs. Nonnegative Matrix Factorization

For many of us, factor analysis provides a gateway to learning how to run and interpret nonnegative matrix factorization (NMF). This post will analyze a set of ratings on a 218 item adjective checklist using both principal axis factor analysis and NMF....

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Exploiting Heterogeneity to Reveal Consumer Preference: Data Matrix Factorization

August 11, 2014
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Exploiting Heterogeneity to Reveal Consumer Preference: Data Matrix Factorization

We begin with a data matrix, a set of numbers arrayed so that each row contains information from a different consumer. Marketing research focuses on the consumer, but the columns are permitted more freedom, although they ought to tell us something abou...

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Customer Segmentation Using Purchase History: Another Example of Matrix Factorization

August 2, 2014
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Customer Segmentation Using Purchase History: Another Example of Matrix Factorization

As promised in my last post, I am following up with another example of how to perform market segmentations with nonnegative matrix factorization. Included with the R package bayesm is a dataset called Scotch containing the purchase history for 21 brand...

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Variable Selection in Market Segmentation: Clustering or Biclustering?

July 29, 2014
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Variable Selection in Market Segmentation: Clustering or Biclustering?

Will you have that segmentation with one or two modes?The data matrix for market segmentation comes to us with two modes, the rows are consumers and the columns are variables. Clustering uses all the columns to transform the two-mode data matrix (row a...

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Uncovering the Preferences Shaping Consumer Data: Matrix Factorization

July 23, 2014
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Uncovering the Preferences Shaping Consumer Data: Matrix Factorization

How do you limit your search when looking for a hotel? Those trying to save money begin with price. Members of hotel reward programs focus on their brand. At other times, location is first to narrow our consideration set. What does hotel search re...

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Taking Inventory: Analyzing Data When Most Answer No, Never, or None

July 16, 2014
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Taking Inventory: Analyzing Data When Most Answer No, Never, or None

Consumer inventories, as the name implies, are tallies of things that consumers buy, use or do. Product inventories, for example, present consumers with rather long lists of all the offerings in a category and ask which or how many or how often they bu...

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