Demonstrating the Capabilities of the lionfish Software for Interactive Visualization of Market Segmentation Partitions

Abstract

Market segmentation partitions multivariate data using some clustering algorithm, resulting in some number of homogeneous
clusters of consumers for marketing purposes. Often this type of data has no clear cluster structure, that is, no separations or gaps
between clusters of points exist, which is why this is considered partitioning rather than clustering. Understanding the differences
between the clusters is typically done by examining single features. However, this can be inconclusive as multiple clusters might share similar characteristics on individual features and the market segmentation partition actually defines the clusters based on different linear constraints on the features. To understand what uniquely characterizes a cluster of customers, examining linear combinations of features may be helpful. This article introduces the R package lionfish that provides interactive and dynamic tools to facilitate the exploration and refining of market segmentations. The package integrates tour algorithms that use linear combinations of features to view high-dimensional data, from the tourr package, with Python-powered interactivity, allowing manual control, interactive selection, and multiple linked windows, to support revising the cluster memberships based on visual feedback. The focus is on the widely used k-means clustering algorithm, but the tools also support other algorithms. The utility of the software is demonstrated through three example analyses from the domain of market segmentation. The flexible, user-driven approach provided by package lionfish offers deeper insights into complex market behaviors, enabling more effective segmentation and enhancing strategic decision-making.