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Segmentation Analysis

This document discusses using clustering algorithms to segment customers for improving sales. It aims to analyze and segment individual customers into groups based on attributes like age, gender, income and spending score. The proposed system will develop easy visualization techniques, increase the dataset size for more accurate results, and segment products according to customer groups. It will use K-Means clustering on a dataset of 2000 customer samples collected from forms to partition customers into clusters and minimize distance between customers and centroids. This customer segmentation has the potential to allow marketers to effectively target customer groups.

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834 views

Segmentation Analysis

This document discusses using clustering algorithms to segment customers for improving sales. It aims to analyze and segment individual customers into groups based on attributes like age, gender, income and spending score. The proposed system will develop easy visualization techniques, increase the dataset size for more accurate results, and segment products according to customer groups. It will use K-Means clustering on a dataset of 2000 customer samples collected from forms to partition customers into clusters and minimize distance between customers and centroids. This customer segmentation has the potential to allow marketers to effectively target customer groups.

Uploaded by

udit kosuru
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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CUSTOMER SEGMENTATION

ANALYSIS FOR IMPROVING


SALES USING CLUSTERING
BY: GUIDED BY:
A.Suma sri (16671A0561) Dr. P. SRINIVASA RAO
K.Udit (16671A0586) Professor in Computer Science
A.Niyathi (16671A0598) and engineering.
N.Sai Teja (15671A05A0)
INTRODUCTION
Customer segmentation is the practice of dividing a company’s
customers into groups that reflect similarity among customers in each group.
The goal of segmenting customers is to decide how to relate to customers in
each segment in order to maximize the value of each customer to the
business. Customer segmentation has the potential to allow marketers to
address each customer in the most effective way.
This project uses the packages such as numpy, pandas, seaborn and
matplotlib and the tools such as jupyter notebook to analyze and segment
each individual customer into their respective segment based on three
important attributes which are ‘age’, ‘gender’, ‘income’, and ‘spending
score’.
BASIC CUSTOMER SEGMENTATION
DEMOGRAPHIC
MARKET CUSTOMER CUSTOMER
SEGMENTATION SEGMENTATION
EXISTING AND PROPOSED SYSTEM
EXISTING SYSTEM PROPOSED SYSTEM
■ All the segmentations are search ■ Develop the system to get easy
based visualization techniques
■ Difficult to gather the data and ■ Increase the data set to accommodate
segment them accordingly many data points so that results will
be more accurate
■ The results are not really accurate as
the clustering is not close enough to ■ Segment the products directly
determine accurate centroids according to the customer group
■ Use different methods to collect the
customer data instead of physical
forms
MODULES
■ Collect the required data from the people in the forms
■ Feed this collected data into the CSV file with different sections and parameters
■ Train our machine learning model with the dataset in the CSV file with the
collected data from the customers
■ Give out the test sample to get more and more accurate outputs
■ Merge the two most similar clusters and keep repeating the process until no
change in centroids
■ Get the final output in the form of a graph which contains different groups of
people as clusters and target people clusters towards which the business can be
targeted
BASIC ARCHITECTURE

Architecture of a machine learning project Architecture of the K-Means clustering algorithm which
is used to get the output in this project
DATASET USED

 The data set used for this project currently contains 1lac population from which 2000
samples have been collected as the training set to get accurate outputs
 The dataset has been collected from kaggle and the machine( using K-Means clustering)
has been trained appropriately
HARDWARE AND SOFTWARE
REQUIREMENTS
HARDWARE SOFTWARE
REQUIREMENTS REQUIREMENTS
■ Hard disk ■ Operating system(Windows 10)
■ System ■ Anaconda
■ Forms ■ Jupyter
■ Kaggle
LIBRARIES AND ALGORITHM USED

Libraries used: Algorithm used:


■ Numpy ■ K-Means clustering :
■ Pandas ■ The objective of k-means is to minimize the total sum
of the squared distance of every point to its
■ Seaborn corresponding cluster centroid. Given a set of
■ Matplotlib observations (x1, x2, …, xn), where each observation
is a d-dimensional real vector, k-means clustering aims
■ Sklearn to partition the n observations into k (≤ n) sets S = {S1,
S2, …, Sk} so as to minimize the within-cluster sum of
squares where µi is the mean of points in Si.
■ The k-means algorithm is guaranteed to converge a
local optimum.
COMPARISIONS
COMPARISIONS
CONSTRAINTS
■ Should not take a huge dataset at the same time as the clusters get dense
■ The WCSS value has to as low as possible to get accurate outputs.
■ The Euclidian distance should be as high as possible
■ Get the accurate elbow value to segregate the number of clusters to get
the output
■ The range should be (1, 11) as we are taking the loop iterations till 10.
The iterations continue only in this range
COLLECTED GRAPHS

Collecting the age samples from Annual and spending score is Distribution of gender is an
the dataset and plotting it in the collected and added into the important parameter as many
graphs dataset to train the model based products are categorized based on
on these parameters gender
OUTPUT SCREENS

The elbow method is employed to get the This is the final output considering the
number of k values(no. of clusters) parameters spending score and annual
income. Other parameters also can be
considered
CONCLUSION
■ As we come to the summary of this project, we can say that
this can be enhanced greatly in the future to get more accurate
recommendations from the output obtained from the system.
■ This system can be very useful to target the customers and
reach the product the companies develop to their accurate
customer groups to get higher profits and more sales.
REFERENCES
[1] E. Ngai, L. Xiu and D. Chau, “Application of data mining techniques in customer
relationship management: A literature review and classification”, Expert Systems with
Applications, vol. 36, no. 2, pp. 2592-2602, 2009.
[2] J. Peppard, “Customer Relationship Management (CRM) in financial services”, European
Management Journal, vol. 18, no. 3, pp. 312-327, 2000.
[3] A. Ansari and A. Riasi, “Taxonomy of marketing strategies using bank customers
clustering”, International Journal of Business and Management, vol. 11, no. 7, pp. 106-119,
2016.
[4] M. Ghzanfari, et al., “Customer segmentation in clothing exports based on clustering
algorithm”, Iranian Journal of Trade Studies, vol. 14, no. 56, pp. 59-86, 2010.
THANK YOU

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