This project was the result of an exercise in exploratory data analysis. I undertook this in order to apply my knowledge acquired through self-learning. After satisfying myself with EDA, I decided to go ahead and segment out the customers into groups to identify the most profitable ones.
Market Segmentation refers to the grouping together of customers with similar behavior (like buying patterns and percentage expenditure). It is important for organizations and businesses to analyze customer personalities so as to enable proactive decision-making, in terms of promotional campaigns, product launches etc. This helps them better understand their customers and makes it easier for them to cater to the specific needs, behaviors and concerns of different types of customers.
Customer personality analysis helps businesses modify their plans and products based on the target customer segments. For example, instead of spending money to market a new product to every customer in the company’s database, a company can analyze which customer segment is most likely to buy the product and then market the product only to that particular segment.
I used a Kaggle dataset for this project. It consists of details of customers who responded to multiple marketing campaigns by an anonymous company.