ABSTRACT
Cluster analysis is used to separate objects or individuals into several homogeneous groups or clusters. the clustering is based on variables that characterize these objects or individuals. Clusters are formed so that the homogeneity is maximized within the clusters, while the heterogeneity is maximized between the clusters. therefore, members of the same cluster share common characteristics. the cluster analysis groups together observations (or individuals) based on characteristics measured for each observation. in marketing, variables used to group consumers into segments are demographical variables (for example, age, gender and so on), behavioural variables (for example, purchase frequency, level of loyalty and so on), benefits sought or lifestyle variables. these variables enable the identification of different groups of consumers so that customers are most similar within the group, whereas groups must be as different as possible.
