Traditionally, market segmentation utilizes cluster analysis techniques like K-Means and Latent class to identify market segments. These techniques are used often with high success. However, these algorithms focus on cluster homogeneity, while the researcher only needs to identify and exploit segment differences. This disconnect can lead to missed opportunities for the researcher. "Archetypal analysis" is a powerful alternative that focuses on segment contrasts rather than homogeneity, frequently leading to richer and more actionable market segments.
