Applying cluster analysis to segment construction steel market

Designing a product or preparing a marketing plan is exceedingly difficult when individuals in the target market have differing needs and behaviors. Marketers try to solve this problem by using market segmentation. The customers for construction steel products take into assessment many different characteristics, and compare the various offers on the basis of these specifications. So for a construction steel manufacturer it is important to know which group of customers pays more attention to which characteristics. In this research, with the identification of the major specifications of construction steel products, cluster analysis, is used as a market segmentation tool for grouping customers. Information was collected via questionnaires. The observations were categorized in the variables determined by the segmentation mechanism based on their similarities with each other, with the help of cluster analysis techniques. Since the use of multivariate methods is considered an exploratory method, validity of the results is proved.