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    Case Studies

    Segmenting the Market to Support Product Development Using a Leading-Edge Analytic Technique

    Problem: A global leader in gaming and home entertainment systems was looking for a market segmentation structure that would support product development and innovation over the next three years. The challenge was to identify emerging opportunities based on current behaviors, attitudes and preferences.

    Solution: MSI fielded an online multinational study capturing a comprehensive amount of consumption, attitudinal and demographic data. Instead of using traditional clustering algorithms such as k-means, which segments people based on averages, MSI used a relatively new technique called Archetypal Analysis. Using extreme values in the data set, this technique defined the persona of a few Archetypes that sit on the fringes, and then measured the proximity of each respondent to each Archetype.

    Results: The analysis yielded several Archetypes of leading-edge behaviors and attitudes with regard to entertainment consumption, providing guidance for innovative product development. By looking at the extreme values in the data set, Archetypal Analysis allowed MSI to segment on emerging patterns of consumption rather than averages of current consumption. Additionally, the resultant segments defined by those closest to each Archetype yielded more distinctive profiles than those yielded by traditional k-means clustering, allowing for more precise product development and message targeting.
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