Segmentation-Targeting-Positioning (STP)

Cluster Analysis Concepts

Data‑driven segmentation often starts with clustering algorithms. See if you can spot the key concepts behind modern cluster analysis.

The default distance measure for k‑means on standardised numeric data is ______ distance.

Cosine

Euclidean

Manhattan

Hamming

Euclidean distance minimises the sum of squared errors and aligns with the mean‑based centroid update.

In hierarchical clustering, the method that merges clusters based on the smallest average pairwise distance is called ______.

complete linkage

average linkage

single linkage

Ward’s method

Average linkage (UPGMA) balances cluster chaining and compactness by using mean inter‑cluster distance.

The elbow method helps analysts decide the optimal ______.

distance metric

number of clusters (k)

scaling factor

principal components

Plotting within‑cluster SSE against k reveals a point where marginal improvement drops—an ‘elbow’.

Standardising variables before clustering prevents ______ variables from dominating the distance calculation.

categorical

irrelevant

binary

high‑scale

Z‑scores equalise units so price in dollars does not swamp satisfaction in points.

K‑prototypes handles mixed data by combining numeric distance with ______ distance for categorical variables.

Hamming

Mahalanobis

Jaccard

Cosine

Hamming counts attribute mismatches, integrating seamlessly into the prototype update routine.

The silhouette coefficient jointly measures cluster cohesion and ______.

kurtosis

skewness

separation

sparsity

Values near 1 indicate points are closer to their own cluster than to neighbouring clusters.

In agglomerative clustering, merging continues until ______ cluster(s) remain.

one

a predefined silhouette score

k+1

zero

The dendrogram starts with n singletons and, if not cut earlier, finishes with a single mega‑cluster.

Probabilistic centre initialisation that improves k‑means consistency is known as ______.

fuzzy c‑means

random swap

Hartigan optimisation

k‑means++

k‑means++ spreads initial centroids, reducing the chance of poor local minima.

DBSCAN labels observations in sparse regions as ______.

linkages

centroids

medoids

noise

Points with insufficient neighbours within ε are treated as outliers rather than forced into clusters.

Ward’s method in hierarchical clustering aims to minimise the total ______ within clusters at each step.

dimensionality

entropy

distance metric

variance

By joining clusters that produce the smallest increase in SSE, Ward’s creates compact, equal‑size groups.

Starter

Keep exploring the fundamentals.

Solid

Great job—refine the finer points and you’ll lead the pack.

Expert!

You’ve mastered this segmentation concept—apply it boldly.

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