COMBINED APPLICATION OF HIERARCHICAL AND NONHIERARCHICAL CLUSTERING METHODS IN ORDER TO
SEGMENT THE CUSTOMERS IN ONE TRADE CHAIN Cover Image

Kombinovana primena hijerahijskih i nehijerarhijskih metoda klasterizacije u cilju segmentacije kupaca u jednom trgovinskom lancu
COMBINED APPLICATION OF HIERARCHICAL AND NONHIERARCHICAL CLUSTERING METHODS IN ORDER TO SEGMENT THE CUSTOMERS IN ONE TRADE CHAIN

Author(s): Goran Bjelobaba, Ana Savić, Stefana Janićijević, Hana Stefanović
Subject(s): Economy
Published by: Visoka škola za poslovnu ekonomiju i preduzetništvo
Keywords: dendrogram; cluster analysis; K-means algorithm; market segmentation; Silhouette index

Summary/Abstract: In this paper K-means clustering algorithm is applied in order to classify customers into several groups showing the similarity within a group is better than among groups. After determining the relevant client's attributes in a SQL Server database, K-means is applied in MATLAB programming environment, using fixed number of clusters. Each centroid defines one of the clusters, while each data point is assigned to the nearest centroid, based on the squared Euclidean distance. In this research, centroids are randomly generated, while the separation distance between the resulting clusters is analyzed and illustrated using the Silhouette index. The analysis and results presented in this paper could determine a similarity in purchasing or using the services by a population cluster in a luxury goods company, to develop market segments, to identify repetitive behavior or trends in order to evaluate clients’ actions and to create some new customer loyalty campaigns.

  • Issue Year: 7/2019
  • Issue No: 1
  • Page Range: 61-72
  • Page Count: 12
  • Language: Serbian
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