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Customer Segmentation in Foreign Trade Based on Clustering Algorithms

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Executive Summary

The goal of this paper is to segment the countries based on the value of export from Iran during 14 years ending at 2005. To measure the dissimilarity among export baskets of different countries, the authors define Dissimilarity Export Basket (DEB) function and use this distance function in K-means algorithm. The DEB function is defined based on the concepts of the association rules and the value of export group-commodities. In this paper, clustering quality function and clusters intraclass inertia are defined to, respectively, calculate the optimum number of clusters and to compare the functionality of DEB versus Euclidean distance.

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