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Market segmentation seems to be the more widespread, both in books and on websites:

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What are the differences between market segmentation and customer segmentation? Both are basically about clustering customers to improve products/advertisement, right?

(Side note: "Clustering" is WAY more common in books and web search)

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Market segmentation seems to be largely human chosen theory, and not data or science based.

Customer segmentation is probably more on the lines of actually looking at the customer data rather than just speculating. But it's still largely lacking any statistical validity (yes, it may involve running some clustering algorithm, but without properly caring about the statistical support of it - but most of the time, segments are just formed by some user chosen criterion, not by cluster analysis or statistical analysis) - so neither really belongs into data science. I guess anyone taking validity serious would rather avoid these terms...

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  • $\begingroup$ Do you have any source for those claims? $\endgroup$ – Martin Thoma Jan 3 '19 at 5:51
  • $\begingroup$ Check out the average marketing book... $\endgroup$ – Has QUIT--Anony-Mousse Jan 3 '19 at 9:19
  • $\begingroup$ For business purposes you want something interpretable. "Clients 25-30 years". Not the black-box output from a clustering algorithm, that is pretty much what they do not want. Of course these days everything has to be AI, but when you check what they really use successfully... of course it works much better to manually define segments. $\endgroup$ – Has QUIT--Anony-Mousse Jan 3 '19 at 9:45

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