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Discriminant Coefficient Definition

Estimate of the discriminatory power of a particular independent variable.

A discriminant coefficient determines the significance of predictor variables in classifying or distinguishing among groups or segments within a dataset. This statistical measurement estimates the discriminatory power of a particular independent variable and quantifies the contribution of each variable to the separation of groups. This knowledge allows businesses to allocate resources efficiently, customize marketing messages and create products or services to meet customer needs.

Who relies on a discriminant coefficient?

Marketing professionals and researchers, as well as businesses, use discriminant coefficients to determine the variables that have the most influence in differentiating customer segments, target audiences or market categories. What’s more, it helps identify key factors that drive consumer behavior or preferences.

Why should I care about a discriminant coefficient?

A discriminant coefficient identifies the variables that impact customer group distinctions. Insights collected through the measurement can help marketing professionals to create effective strategies and campaigns, as well as to improve customer satisfaction.