Image Feature Selection for Market Segmentation: A Comparison of Alternative Approaches

The selection of variables (e.g. socio-demographic or psychographic descriptors of consumers, their buying intentions, buying frequencies, preferences) plays a decisive role in market segmentation. The inclusion as well as the exclusion of variables can influence the resulting classification decisively. Whereas this problem is always of importance it becomes overwhelming when customers should be grouped on the basis of describing images (e.g. photographs showing holidays experiences, usually bought products), as the number of potentially relevant image features is huge. In this paper we apply several general-purpose approaches to this problem: the heuristic variable selection by Carmone et al. (1999) and Brusco and Cradit (2001) as well as the model-based approach by Raftery and Dean (2004). We combine them with k-means, fuzzy c-means, and latent class analysis for comparisons in a Monte Carlo setting with an image database where the optimal market segmentation is already known.