A unified market segmentation method for generating Pareto optimal solutions sets

Ying Liu, Sudha Ram, Robert Lusch

Research output: Contribution to conferencePaperpeer-review

4 Scopus citations


Market segmentation is an important issue in today's intensely competitive environment. While many methods have been proposed for market segmentation, they can be classified into two categories: descriptive and predictive. Descriptive methods are optimized for segment identifiability while predictive methods are optimized for segment responsiveness. Most existing segmentation methods cannot effectively address both identifiability and responsiveness goals of market segmentation due to their focus on only one aspect of the multiobjective problem. This paper proposes a new market segmentation method that unifies descriptive and predictive methods by simultaneously optimizing multiple objectives. The unified market segmentation method overcomes the limitations of existing segmentation methods and generates Pareto optimal solution sets. It also suggests the optimal number-of-segments and the best solution based on the characteristics of the Pareto front. As a result, the method presents a unified view of possible segmentation solutions and automatically selects the best solution(s) by balancing the tradeoffs. We demonstrate the benefits of our method by empirically evaluating it using data from a cell phone service provider.

Original languageEnglish (US)
Number of pages6
StatePublished - 2005
Event15th Workshop on Information Technology and Systems, WITS 2005 - Las Vegas, NV, United States
Duration: Dec 10 2005Dec 11 2005


Other15th Workshop on Information Technology and Systems, WITS 2005
Country/TerritoryUnited States
CityLas Vegas, NV

ASJC Scopus subject areas

  • Information Systems
  • Control and Systems Engineering

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