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Description of the analytical method "discriminant analysis" for segmentation with response

Discriminant analysis allows you to segment consumers based on their response to advertising and divide the entire audience into groups based on the outcome of their interaction. This can be defined not only by two options: purchased or not purchased, subscribed or not subscribed, but by any number of response types. For example, website visitors can be divided into those who visited the site, those who did not visit the site, and those who visited the site to a specified depth. Discriminant analysis is used to construct response models based on a set of factors that most influence the desired response. Unlike logistic regression, the dependent variable can take on multiple values, not just one.

A limitation of the method is the need to use quantitative, binary, or dummy variables created from nominal variables that take more than two values as independent variables. It is also necessary to consider the a priori probability of the response outcomes..

Cost of discriminant analysis

The Fisher canonical discriminant function equation is constructed for each response variant, after which the results are compared. To assess the adequacy of the model, misclassification tables are constructed, allowing one to check what percentage of each analysis group was correctly predicted. This method allows one to step-by-step check which variables improve the model's quality and stop the analysis as soon as the model begins to deteriorate.

Discriminant Analysis Training

To assess the adequacy of the model, misclassification tables are constructed to check the percentage of each analysis group that was correctly predicted. This method allows for a step-by-step check of which variables improve the model's quality and stops the analysis as soon as the model begins to deteriorate.

Using discriminant analysis, it is possible to predict consumer behavior and response, such as whether a consumer will purchase a product or not. [This sentence appears to be incomplete and likely a misclassification error.] ...

Selecting a segmentation method