Impact of market segmentation strategies on customer satisfaction with reference to selected products in Hyderabad

Abstract

The aim of this study is to determine the importance of the individual factors and their impact on total customer satisfaction for multiple segments by using linear regression and hierarchical clustering. This study is focused on the market of cafestablishment. We applied hierarchical clustering with Wards criterion to partition customers into segments and then we developed linear regression models for each segment. Linear models for partitioned data showed higher coefficient of determination than the model for the whole market. The results revealed that there are quite significant differences in rankings of customer satisfaction factors among the segments. This is caused by the different preferences of customers. The clustered data allows to achieve a higher homogeneity of data within the segment, which is crucial both for marketing theory and practice. The approach i.e. partitioning the market into more specific segments could become perspective for marketing use in different economic sectors.