Hi I would like to seek help with my cluster analysis using SAS.
The main objective of the task is to segment customers into groups based on their similarity. The dataset contain mixed types of variables including continuous (like age, income, spendings,etc), ordinal (like education, etc) and nominal (gender, occupation,etc).
I simply use VARCLUS procedure in SAS to select variable to be used in developing clusters. Since it only applies for continuous variable, I assign numbers to ordinal variables and convert nominal variables to binary before running VARCLUS. I wonder what are alternatives way to deal with categorical variables.
Is it better to apply principal component analysis/factor analysis for variable reduction in this case. And which option is better?
What are possible ways If I want to put more weights on certain attributes in developing clusters?
By using difference variables, difference distance measures and different cluster algorithm, the clusters could be varied very much. Currently, I just simply compare my cluster results from a business use manner and choose the one looks like most meaningful. I wonder whether there are methods that help in comparing and validate the result of clustering.