Cluster Analysis: Cases*

Case 1: TV

ElectroSure is an electronics company and it wants to segment its potential

consumers of television based on their attitudes and perceptions. To get the
variables that differentiate one TV consumer form another, ElectroSure conducted
literature analysis and then conducted a preliminary research to know the impact of
the variables, it considered, on consumer preferences. These variables were
converted into a Questionnaire in the form of statements. Respondents were asked
to provide their responses to each statement on a 5 point Likert scale in which 1
stood for Strongly Agree and 5 stood for Strongly Disagree.

The scale is defined as:

1= Strongly agree

2= Moderately agree

3= Neither agree nor disagree

4= Moderately disagree

5= Strongly disagree

A part of the questionnaire and a data extract are provided for your Analysis. (15
statements & 20 respondents)

The 15 statements present in the questionnaire are:

1. I prefer surfing the product on internet before purchasing it.

2. I feel that quality comes at a price.
3. I think twice before I buy anything.
4. TV is a major source of entertainment for me and my family.
5. A TV is a necessity, not a luxury.
6. I watch TV only on weekends.
7. People are more entertainment seeking today than they were in the earlier
generation.
8. Entry of foreign companies has increased the efficiency of Indian TV
companies.
9. View of my family is important for my purchase decisions.
10.I believe valuable information like news or knowledge that is provided on TV
can play a positive role in our lives.
11.I enjoy watching movies in a theatre.
12.If I get a chance I would like to settle abroad.
13.I always buy branded products.
14.I frequently go out on weekends.
15.I prefer to pay by credit card rather than by cash.
*The cases are developed for class room discussion only. The data used in the case
are fictional.
Look at the excel file given to you. Apply the appropriate method and answer the
following questions.

Questions:

Q.1. Identify the number of clusters/ segments from the data provided.
Q.2. Determine which respondent belongs to which segment.
Q.3. Identify the variables that distinguish the segments at 90% confidence level.
Q.4. Create segment profiles for each cluster based on their scores on the
distinguishing variables.
Q.5. Label/Name each segment based on their dominant distinguishing
characteristics.
Provide reasons for your answers.

Case 2: Fastfood

AdIndia Inc. is a large and renowned advertising agency located in Mumbai. The
marketing research manager wants to identify the market segments for one of the
agencys clients, a manufacturer of pizza, burger etc., so that an effective
advertising campaign can be developed. The manufacturer wants to know about
customers attitudes and perceptions towards fast foods in India. The ad agency
asked its market research wing to conduct a research in India. It decides to segment
the market and using probability sampling collected data from 400 respondents.
Respondents were asked to provide their responses to a set of questions on a 5
point likert scale (1=strongly agree; 5=strongly disagree). They want to know-who
are the real customers of the manufacturer. The market research wing wants to
differentiate between its potential customers and the uninterested. The
questionnaire contained these items:

1. I think fast-food is not good for health.

2. I am very skeptical about eating outside home.
3. I think once in a while we should hang out with our friends outside.
4. I spend nearly half of my earning on food.
5. I love to dine out with my family on weekends.
6. If quality is good, I will eat the food.
7. Advertisements play a vital role in my purchase decision.
8. I watch television every day.
9. I love to surf net on my free time.
10.I believe free home delivery of food items is helping the busy people.
11.My spouse/children/partners choice plays an important role in my food purchase
decision.
12.I want to live the life to the fullest today with worrying about future.
13.I believe that provision of discounts/offers attracts me towards a product.
*The cases are developed for class room discussion only. The data used in the case
are fictional.
14.I love watching movies in the theaters compared to on TV at home.
15.I browse internet on my mobile when it is needed.
16.I love branded products.
17.I love to try new and different foods occasionally.

A data extract of this research are provided for your analysis (20 respondents). Look
at the excel file given to you. Apply the appropriate method and answer the
following questions.

Questions:

Q.1. Identify the number of clusters/ segments from the data provided.

Q.2. Determine which respondent belongs to which segment.

Q.3. Identify the variables that distinguish the segments at 99.9% confidence Level.

Q.4. Create segment profiles for each cluster based on their scores on the
distinguishing variables.

Q.5. Label/name each segment based on their dominant distinguishing

characteristics.

Provide reasons for your answers.

*The cases are developed for class room discussion only. The data used in the case
are fictional.