Abstract—Market segmentation is one of the most fundamental strategic marketing concepts. The better the segment which is chosen for targeting by a particular organisation, the more successful the organisation is assumed to be in the marketplace. Also higher education institutions have to improve their marketing tools for attracting foreign students, particularly when demanding tuition fees. This contribution aims at demonstrating the proper usage of the cluster analysis for segmentation (represented by students´ willingness to study abroad) and also, based on large international survey, offers some practical marketing implications. Keywords—Market Segmentation; Students´ Preferences; Study Abroad; Cluster Analysis I. INTRODUCTION ARKET segmentation is one of the most fundamental strategic marketing concepts: grouping people (with the willingness, preferences, fears, purchasing power, etc.) according to their similarity in several dimensions related to the product under consideration. From a marketing management viewpoint, market segmentation is the act of dividing a market into distinct groups who might be attracted to different products or services. This technique is widely accepted as one of the requirements for successful marketing. By dividing the market into relatively homogenous subgroups or target markets, both strategy formulation and tactical decision making can be more effective [6]. The basis for selecting the optimal market segment to target is the number of segmentation solutions resulting from partitioning empirical data. Therefore the quality of groupings management chooses from is crucial to organisational success and requires professional use of techniques to determine potentially useful market segments. Thus, the methodology applied when constructing or revealing [3] clusters from empiric survey data becomes a discriminating success factor and potential source of competitive advantage [1]. There are many techniques available for grouping individuals into market segments on the basis of multivariate survey information but clustering remains the most popular and most widely applied method [2]. Kamila Tislerova is with the University of Jan Evangelista Purkyne in Usti nad Labem, lecturer of Business Administration. E-mail: kamila.tislerova@ujep.cz Marta Zambochova is with the University of Jan Evangelista Purkyne in Usti nad Labem, Czech Republic. Research field: Statistics. E-mail: marta.zambochova@ujep.cz Cluster analysis, the most common method for market segmentation, is an iterative process that requires the researcher to make numerous decisions relating to the creation and interpretation of the clusters. The most important aspect of segmentation is the interpretation of the clusters for the usefulness of the solution [5]. II. METHODOLOGY Both international surveying and the methodology of segments creation (cluster analysis) will be described in this section. A. Research objectives • To outline the potential of cluster analysis in market segmentation • To discuss the concept of cluster analysis and basic ideas and algorithms • To acquire a reasonable segments of foreign students (according to their willingness to study abroad) • To formulate the practical implication for marketing activities of higher education institutions. B. International survey In the period of April – December 2010 a large international survey was carried out. The main purpose of the survey was to identify students’ expectations and fears and to acquire enough data for high quality segmentation. Issues such as current study results, family income, influencers, the acceptable amount of tuition fees, willingness to learn a foreign language and many other factors were examined. Questionnaires of 26 issues were distributed in several countries by Czech researchers with the help of foreign universities. Also many interviews were conducted in order to determine the foreign students’ attitude and especially in order to find an explanation for certain behaviour patterns. In this paper only qualitative data are processed and interpreted. 0 100 200 300 400 500 600 Belarus Greece Russia Ukraine Slovakia China country count Fig. 1 Structure of respondents – country of origin Students from six countries (see Fig. 1) were questioned in total number of 1093 respondents. The Kamila Tislerova, Marta Zambochova Marketing Segmentation of Students Willing to Study Abroad based on Cluster Analysis M World Academy of Science, Engineering and Technology International Journal of Economics and Management Engineering Vol:5, No:5, 2011 526 International Scholarly and Scientific Research & Innovation 5(5) 2011 scholar.waset.org/1307-6892/12465 International Science Index, Economics and Management Engineering Vol:5, No:5, 2011 waset.org/Publication/12465