Market Potential Analysis Based on Population and Land Area using K-Means Clustering and MCDM Approaches
-
Ita Arfyanti
*
STMIK Widya Cipta Dharma, Samarinda,
Indonesia
- Tommy Bustomi Politeknik Negeri Samarinda, Samarinda, Indonesia
- Ivan Haristyawan STMIK Widya Cipta Dharma, Samarinda, Indonesia (*) Corresponding Author
Abstract
In an increasingly competitive global market, accurately identifying untapped market potential in small to medium-sized regions, often overlooked by traditional single-indicator analyses, presents a significant challenge for strategic decision-making. This study addresses this by proposing a hybrid analytical framework integrating K-Means Clustering with Multi-Criteria Decision-Making (MCDM) methods, utilizing population size and land area as core indicators. The primary objective is to develop a robust market potential analysis model capable of systematically classifying regions and providing actionable insights for resource optimization and market expansion. The methodology involves determining the optimal number of clusters using the elbow method (k=3, with a silhouette score of 0.8862), followed by K-Means clustering to segment Asian countries into distinct groups. Subsequently, three MCDM methods SAW, WP, and WASPAS are applied to rank countries within the most relevant cluster (low population and area) under various weighting scenarios. The results consistently demonstrate Turkey's top ranking across all MCDM methods, highlighting its robust market potential regardless of weight variations. Crucially, a very strong agreement in rankings between the MCDM methods was observed, evidenced by Spearman's correlation coefficients consistently above 0.98, with the highest correlation between SAW and WASPAS (0.998379 for [0.3, 0.7] weights). This high correlation confirms the reliability and consistency of the model, concluding that SAW and WASPAS are highly suitable for this analysis, and identifying Turkey as the leading country in market potential among 50 Asian nations based on the criteria studied.
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