Clustering ranking data in market segmentation: a case study on the Italian McDonald's customers’ preferences

Eugenio Brentari, Livia Dancelli and Marica Manisera

Journal of Applied Statistics, 2016, vol. 43, issue 11, 1959-1976

Abstract: Cluster analysis is often used for market segmentation. When the inputs in the clustering algorithm are ranking data, the intersubject (dis)similarities must be measured by matching-type measures, able to take account of the ordinal nature of the data. Among them, we used a Weighted Spearman's rho, suitably transformed into a (dis)similarity measure, in order to emphasize the concordance on the top ranks. This allows creating clusters grouping customers that place the same items (products, services, etc.) higher in their rankings. Also the statistical instruments used to interpret the clusters must be conceived to deal with ordinal data. The median and other location measures are appropriate but not always able to clearly differentiate groups. The so-called bipolar mean, with its related variability measure, may reveal some additional features. A case study on real data from a survey carried out in the Italian McDonald's restaurants is presented.

Date: 2016
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DOI: 10.1080/02664763.2015.1125864

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