Finite Mixture Models

Abstract

Finite Mixture models are a state-of-the-art technique of segmentation. Next to segmenting consumers or objects based on multiple different variables, Finite Mixture models can be used in conjunction with multivariate methods ofanalysis. Unlike approaches combining multivariate methods of analysis and cluster anal- ysis, which require a two-step approach, the parameters are then directly esti- mated at the segment level. This also allows for inferential statistical analysis. This book chapter explains the basic idea of Finite Mixture models and describes some popular applications of Finite Mixture models in market research. Keywords