Abstract:
Segmenting consumers into groups has long been used to gain marketing insights (e.g.,
Frank, Massey & Wind 1972). Many ways to identify segments have been proposed (e.g.,
Kaufman & Rousseeuw 1990), although most share some common features, such as choosing
representative local centered "objects" according to some criterion. The rationale for focusing
on extreme individuals in segmenting markets was noted by Allenby and Glinter (1995), who
argued such consumers can be important in new product introduction and switching contexts.
We discuss and illustrate a new approach called "archetypal analysis" (AA) based on distance
from "important extreme objects." AA has considerable potential for use in marketing, which
we illustrate with two examples: 1) identifying segments from responses to attitudinal
statements and 2) identifying segments from responses to discrete choice experiments.
