3. Unsupervised Learning and Customer Segmentation
Overview
In this chapter, you will implement one of the most powerful techniques in marketing – customer segmentation. You will begin by understanding the need for customer segmentation, following which you will study and implement the machine learning approach to segmentation. You will use the k-means clustering algorithm to segment customers and then analyze the obtained segments to gain an understanding of the results so that businesses can act on them.
By the end of this chapter, you will be able to perform segmentation using relevant tools and techniques and analyze the results of the segmented data. You will also be comfortable with using the k-means algorithm, a machine learning approach to segmentation.