Segmentation using two-step cluster analysis

Abstract

The purpose of this chapter is to explain the rationale for employing TwoStep cluster analysis as a market segmentation method within social marketing. Here, the key stages to be performed and the validation techniques required for effective application of this clustering technique are outlined. To further support the application of this cluster analysis technique as a profiling tool, a review of 25 recent market segmentation studies that have utilised this method is provided. Finally, a case study is provided to demonstrate how TwoStep cluster analysis is employed to segment respondents for an active school travel social marketing campaign that was being developed in Queensland at time of writing. Based on a sample of 537 respondents, three segments were identified and validated, each of which differed significantly based on psychographic, behaviour, geographic and demographic variables. Limitations of the TwoStep Cluster Analysis method are also provided, and opportunities for future research employing TwoStep cluster analysis within a social marketing context conclude this chapter.