Latent class analysis for segmenting preferences of investment bonds

Market segmentation is a key component of conjoint analysis which addresses consumer preference heterogeneity. Members in a segment are assumed to be homogenous in their views and preferences when worthing an item but distinctly heterogenous to members of other segments. Latent class methodology is one of the several conjoint segmentation procedures that overcome the limitations of aggregate analysis and a-priori segmentation. The main benefit of Latent class models is that market segment membership and regression parameters of each derived segment are estimated simultaneously. The Latent class model presented in this paper uses mixtures of multivariate conditional normal distributions to analyze rating data, where the likelihood is maximized using the EM algorithm. The application focuses on customer preferences for investment bonds described by four attributes; currency, coupon rate, redemption term and price. A number of demographic variables are used to generate segments that are accessible and actionable.peer-reviewe

Data Mining to Uncover Heterogeneous Water Use Behaviors From Smart Meter Data

Knowledge on the determinants and patterns of water demand for different consumers supports the design of customized demand management strategies. Smart meters coupled with big data analytics tools create a unique opportunity to support such strategies. Yet, at present, the information content of smart meter data is not fully mined and usually needs to be complemented with water fixture inventory and survey data to achieve detailed customer segmentation based on end use water usage. In this paper, we developed a data‐driven approach that extracts information on heterogeneous water end use routines, main end use components, and temporal characteristics, only via data mining existing smart meter readings at the scale of individual households. We tested our approach on data from 327 households in Australia, each monitored with smart meters logging water use readings every 5 s. As part of the approach, we first disaggregated the household‐level water use time series into different end uses via Autoflow. We then adapted a customer segmentation based on eigenbehavior analysis to discriminate among heterogeneous water end use routines and identify clusters of consumers presenting similar routines. Results revealed three main water end use profile clusters, each characterized by a primary end use: shower, clothes washing, and irrigation. Time‐of‐use and intensity‐of‐use differences exist within each class, as well as different characteristics of regularity and periodicity over time. Our customer segmentation analysis approach provides utilities with a concise snapshot of recurrent water use routines from smart meter data and can be used to support customized demand management strategies.TU Berlin, Open-Access-Mittel - 201

A SEGMENTATION ANALYSIS OF U.S. GROCERY STORE SHOPPERS

Cluster analysis was used to conduct a segmentation analysis of U.S. supermarket shoppers. This study is based on the responses of a sample of 1,000 shoppers concerning the importance of 21 store characteristics in selecting their primary grocery store for the Food Marketing Institute's 2000 consumer trends survey. Stores must satisfy the attributes important to all consumers in order to be successful. In order of importance, the four top characteristics are a clean/neat store, high quality produce, high quality meats and courteous, friendly employees. The three key supermarket shopper segments identified are time-pressed convenience seekers, sophisticates, and middle Americans. In order to cater to a particular consumer niche, a store must better fulfill the store preferences of that segment. Time-pressed convenience seekers, 36.70 percent of the sample, put a premium on features such as childcare, gas pumps and online shopping. They are likely to be younger, urban with lower or moderate incomes and have the greatest number of children six years old or younger. Quality and services are important to the sophisticates, 28.40 percent of the sample. This group is middle-aged, better educated with higher incomes than average. Middle Americans, 34.90 percent, are attracted by pricing/value factors such as frequent shopper programs, sales and private label brands. They want stores that are active in the community. Demographically they are in the middle with the highest proportion of high school graduates.Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Marketing,

Structural Equation Modeling and simultaneous clustering through the Partial Least Squares algorithm

The identification of different homogeneous groups of observations and their appropriate analysis in PLS-SEM has become a critical issue in many appli- cation fields. Usually, both SEM and PLS-SEM assume the homogeneity of all units on which the model is estimated, and approaches of segmentation present in literature, consist in estimating separate models for each segments of statistical units, which have been obtained either by assigning the units to segments a priori defined. However, these approaches are not fully accept- able because no causal structure among the variables is postulated. In other words, a modeling approach should be used, where the obtained clusters are homogeneous with respect to the structural causal relationships. In this paper, a new methodology for simultaneous non-hierarchical clus- tering and PLS-SEM is proposed. This methodology is motivated by the fact that the sequential approach of applying first SEM or PLS-SEM and second the clustering algorithm such as K-means on the latent scores of the SEM/PLS-SEM may fail to find the correct clustering structure existing in the data. A simulation study and an application on real data are included to evaluate the performance of the proposed methodology

Segmenting Publics

This research synthesis was commissioned by the National Co-ordinating Centre for Public Engagement (NCCPE) and the Economic and Social Research Council (ESRC) to examine audience segmentation methods and tools in the area of public engagement. It provides resources for assessing the ways in which segmentation tools might be used to enhance the various activities through which models of public engagement in higher education are implemented. Understanding the opinions, values, and motivations of members of the public is a crucial feature of successful engagement. Segmentation methods can offer potential resources to help understand the complex set of interests and attitudes that the public have towards higher education. Key findings: There exist a number of existing segmentations which address many of the areas of activity found in Universities and HEIs. These include segmentations which inform strategic planning of communications; segmentations which inform the design of collaborative engagement activities by museums, galleries, and libraries; and segmentations that are used to identify under-represented users and consumers. Segmentation is, on its own, only a tool, used in different ways in different contexts. The broader strategic rationale shaping the application and design of segmentation methods is a crucial factor in determining the utility of segmentation tools. Four issues emerged of particular importance: 1. Segmentation exercises are costly and technically complex. Undertaking segmentations therefore requires significant commitment of financial and professional resources by HEIs; the appropriate interpretation, analysis, and application of segmentation exercises also require high levels of professional capacity and expertise 2. Undertaking a segmentation exercise has implications for the internal organisational operations of HEIs, not only for how they engage with external publics and stakeholders 3. Segmentation tools are adopted to inform interventions of various sorts, and superficially to differentiate and sometime discriminate between how groups of people are addressed and engaged. 4. For HEIs, the ethical issues and reputational risks which have been identified in this Research Synthesis as endemic to the application of segmentation methods for public purposes are particularly relevant