Genetic Algorithm Technique for Profitability Based Segmentation

摘要

Segmentation involves viewing a heterogeneous market into smaller homogenous markets on the basis of particular criteria (criterion). Segmentation is mainly helpful in identification and understanding of specific needs/preferences of the customer and customizing products/services accordingly. Increasingly companies are resorting to customer segmentation to identify more homogeneity in behavior of the existing customers to become customer centric. There are various criteria available for segmentation like demographics, psychographics, behavioral etc. An additional criterion is customer profitability which segments customers on the basis of expected profitability of the customer. In this paper, applicability of Genetic Algorithm (GA) is shown to segment customers on the basis of profitability.