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Cluster Analysis
A statistical method used to group customers into distinct segments based on similar characteristics.
Implications
A statistical technique used to group similar objects or data points into clusters based on their characteristics, often used in market segmentation, customer profiling, and pattern recognition.
Example
Example: A retail company uses cluster analysis to segment its customer base into distinct groups based on purchasing behavior, allowing for more targeted marketing efforts.
Related Terms
Different from other segmentation techniques like factor analysis, cluster analysis focuses on grouping data points based on their similarities without predefined categories.
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