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What is Cluster Analysis?

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  • Written By: Osmand Vitez
  • Edited By: Kristen Osborne
  • Last Modified Date: 14 September 2016
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    2003-2016
    Conjecture Corporation
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Cluster analysis is a statistical data analysis tool used by companies to sort various pieces of information into similar groups. Companies may use mathematical algorithms or visual diagrams when creating a cluster analysis. The hierarchical-style analysis attempts to take one large group and break it down into several smaller groups. This analysis helps companies break down information into specific parts that may be easily identified and further analyzed for business purposes. A common use of cluster analysis is in the development of business marketing or advertising strategies.

Cluster analysis marketing is the process of breaking down an entire economic marketplace and separating consumers into specific groups. The creation of economic consumer clusters allows businesses to tailor goods or services specifically toward these individuals, and develop marketing strategies that appeal to these individuals' needs or wants. Market research over the past few decades has created three basic clusters of economic consumers: the demanders, the escapists, and the educationalists. Each consumer cluster presents an individual challenge for companies attempting to market goods or services to these individuals.

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The first cluster analysis group, the demanders, often expects high quality goods or services from companies, along with exceptional customer service. These individuals require companies to spend copious amounts of time and effort meeting their needs or wants and may be quick to shop with a competing company if they do not believe they’re receiving enough perks from the first company. Marketing strategies for this cluster usually focus how they can fill an unmet need of these individuals.

The escapist cluster analysis group represents individuals who simply want to be left alone and not pressured through intense marketing strategies. Escapists may respond well to marketing strategies that promote goods or services that allow these individuals simplify their lives. Escapists may also react to marketing strategies relating to peaceful environments or vacations that allow them to step back from their busy lives and recharge their batteries.

Educationalists are individuals interested in learning new things and experiencing new cultures or environments. This cost analysis group is often targeted by companies attempting to sell new goods are services that may not have a current market demand. Educationalists are usually more willing to purchase new products and find a use for them in their life, as well as educate others on how the product can enhance their standard of living. Companies may also be able to use a marketing strategy that focuses on creating a sense of exclusivity for this cluster analysis group, as if no one else can obtain this particular product.

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