Big Data, Data Mining, and Machine Learning: Value Creation for Business Leaders and Practitioners

CHAPTER 6 Segmentation

Segmentation is a collection of methods used to divide items, usually people or products, into logical mutually exclusive groups called segments. These segmentation methods include several functions for identifying the best variables to be used in defining the groups, the variables to be used in analyzing these groups, assigning observations to the clusters, analyzing/validating these clusters, and profiling them to see the common characteristics of the groups.

A well-defined segment has the following features:

• It is homogeneous with respect to a similarity measure within itself.
• It is distinct from other segments with respect to that similarity measure.

Rummikub is a tile-based game for two to four players that was invented by Ephraim Hertzano.¹ Hertzano was born in Romania and developed the game when card games were outlawed under communist rule. The game consists of 104 numbered tiles plus two jokers. The tiles are divided into four unique color groups (usually red, blue, green, and orange) and numbered 1 to 13 so that there are two tiles for each number color combination. The game begins by each player drawing tiles from the 106 facedown tiles—I do not know the official number you are supposed to draw but in my family we draw 20.

After the tiles are drawn, each player organizes their tiles without revealing them to the other players. Once players have had a chance to organize their tiles, play begins. Dean house rules require the oldest player to ...