Segmentation of data -K- Means

1. Demographic segmentation

In business, demographic segmentation is when an organization uses data about the demographic characteristics of its customers to better target and enhance its marketing efforts.

By segmenting a market by demographic variables such as the age of the customer, gender, income, education, religion, and family life cycle, business professionals are able to create groups of customers that display similar wants and needs. Examples

—  Age

—  Gender

—  Income

—  Education

—  Family life cycle

other segmentationss

2. Behavioral segmentation
3. Psychographic segmentation
4. Geographic segmentation

Illustration of the algorithm- Choose two random centeroids.

Step:3 

Step:4

What we expect, but what we get will be different.

 This can be accomplished by making the WCSS -within-cluster sums of squares as minimum as possible.  This metric determines the optimum number of clusters .