QUESTIONING THE RELIABILITY OF MARKET-SEGMENTATION TECHNIQUES

Market segmentation techniques and analyses have received considerable attention in the academic literature. This paper compares and contras ts the results from conducting cluster analysis and factor analysis on two data sets, one which is genuine and the other which has been rand omly generated. This analysis helps test claims about the validity and effectiveness of such techniques and looks at the reliability of the output. The findings suggest that researchers need to be careful to ca rry oat valid preliminary work before presenting their results. Withou t such preliminary work it may be difficult to justify the segments wh ich emerge.