MRA MS Week 2

pawangs@gmail.
com
ZN4L9ICF3G
MARKETING & RETAIL ANALYTICS- WEEK-2

This file is meant for personal use by [email protected] only.
Proprietary content. ©Great Learning. All Rights
Sharing or publishing Reserved.
the contents Unauthorized
in part or use
full is liable for legal or distribution
action. prohibited.
DSBA CURRICULUM DESIGN
CORE DOMAIN
FOUNDATIONS COURSES APPLICATIONS
[email protected]
ZN4L9ICF3G
Data Science Using Advanced
Statistics Marketing Retail
Python Analytics
Data Mining (Week-2/3)
Statistical Methods
for Decision Financial Risk
Predictive Modelling
Making Analytics
Machine Learning
Data Visualization
SQL
Time Series
ForecastingSharing
Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited.
or publishing the contents in part or full is liable for legal action.
LEARNING
OBJECTIVE OF
THIS MODULE
• Marketing & Retail
[email protected]
ZN4L9ICF3G
Terminologies
• Recency-Frequency-Monetary
(RFM) Analysis
• Customer Churn
• Market Basket Analysis (MBA)
• Customer Lifetime Value (CLV)

in part or use
action. prohibited.
LEARNING OBJECTIVES OF THIS SESSION
● Customer Lifetime Value calculation using:

 Excel
[email protected]
ZN4L9ICF3G
● Market Basket Analysis using:

 KNIME

in part or use
action. prohibited.
TRY ANSWERING THE FOLLOWING
● What is CLV ?
● What is lift in MBA?

[email protected]
ZN4L9ICF3G

in part or use
action. prohibited.
BROAD OVERVIEW - CLV
CLV is defined as the discounted sum of all future customer revenue streams
minus product and servicing costs and remarketing costs.
A few benefits of calculating CLV are:

[email protected]
ZN4L9ICF3G
Custom made
Reduced Churn
promotions for Customer Loyalty
Rate
customers
Better Return on
Investment

in part or use
action. prohibited.
BROAD OVERVIEW - MBA
Market Basket Analysis is a techniques used by large retailers to uncover the
association between items or to identify the relationship between items which
are bought together more frequently .
[email protected]
Support - It is a measure of how frequently the collection of items occur together as a

ZN4L9ICF3G
percentage of all transactions

Lift – It is the ratio of confidence to expected confidence. Higher lift values indicate
stronger associations.
Confidence – It is the ratio of the number of transactions that include all items in {B} as
well as the number of transactions that include all items in {A} to the number of
transactions that include all items in {A}. (Assume A & B are items in some transaction)

in part or use
action. prohibited.
Apply Data Science at your workplace to gain some instant benefits:
• Get noticed by your management with your outstanding analysis backed by data
science.
[email protected]
ZN4L9ICF3G
• Create an impact in your organization by taking up small projects/initiatives to solve

critical issues using data science.
• Network with members from the data science vertical of your organization and seek
opportunities to contribute in small projects.
• Share your success stories with us and the world to position yourself as a subject matter
expert in data science.Proprietary content. ©Great
Learning. All Rights
in part or use
action. prohibited.
Industry Application – Market Basket Analysis
Practical Applications of Market Basket Analysis

When one hears Market Basket Analysis, one thinks of shopping carts and supermarket shoppers. It is important to realize that there are many
other areas in which Market Basket Analysis can be applied. An example of Market Basket Analysis for a majority of Internet users is a list of
potentially interesting products for Amazon. Amazon informs the customer that people who bought the item being purchased by them, also
reviewed or bought another list of items. A list of applications of Market Basket Analysis in various industries is listed below:
•Retail. In Retail, Market Basket Analysis can help determine what items are purchased together, purchased sequentially, and purchased by
season. This can assist retailers to determine product placement and promotion optimization (for instance, combining product incentives). Does it
[email protected]
ZN4L9ICF3G
make sense to sell soda and chips or soda and crackers?

•Telecommunications. In Telecommunications, where high churn rates continue to be a growing concern, Market Basket Analysis can be used
to determine what services are being utilized and what packages customers are purchasing. They can use that knowledge to direct marketing
efforts at customers who are more likely to follow the same path. For instance, Telecommunications these days is also offering TV and Internet.
Creating bundles for purchases can be determined from an analysis of what customers purchase, thereby giving the company an idea of how to
price the bundles. This analysis might also lead to determining the capacity requirements.
•Banks. In Financial (banking for instance), Market Basket Analysis can be used to analyze credit card purchases of customers to build profiles
for fraud detection purposes and cross-selling opportunities.
•Insurance. In Insurance, Market Basket Analysis can be used to build profiles to detect medical insurance claim fraud. By building profiles of
claims, you are able to then use the profiles to determine if more than 1 claim belongs to a particular claimer within a specified period of time.
•Medical. In Healthcare or Medical, Market Basket Analysis can be used for comorbid conditions and symptom analysis, with which a profile of
illness can be better identified. It can also be used to reveal biologically relevant associations between different genes or between environmental
effects and gene expression.
•Source: https://infocenter.informationbuilders.com/wf80/index.jsp?topic=%2Fpubdocs%2FRStat16%2Fsource%2Ftopic49.htm
in part or use
action. prohibited.
CASE STUDY
1. Perform Market Basket Analysis on Groceries Stores data to identify
possible associations among items in the transactions. Use KNIME.
2. For the given Margin per period of $1000000 and Customer

Retention Rate of 30% with Discount Rate of 10%. Calculate CLV.
[email protected]
ZN4L9ICF3G
[For Number of periods up to 10]

in part or use
action. prohibited.
[email protected]
ZN4L9ICF3G
ANY QUESTIONS
in part or use
action. prohibited.
[email protected]
ZN4L9ICF3G
HAPPY LEARNING
in part or use
action. prohibited.

MRA MS Week 2

Uploaded by

Copyright:

Available Formats

MRA MS Week 2

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

MRA MS Week 2

Uploaded by

Copyright:

Available Formats

pawangs@gmail.

MARKETING & RETAIL ANALYTICS- WEEK-2

This file is meant for personal use by [email protected] only.

● Customer Lifetime Value calculation using:

● Market Basket Analysis using:

This file is meant for personal use by [email protected] only.

● What is lift in MBA?

This file is meant for personal use by [email protected] only.

A few benefits of calculating CLV are:

This file is meant for personal use by [email protected] only.

Support - It is a measure of how frequently the collection of items occur together as a

percentage of all transactions

This file is meant for personal use by [email protected] only.

• Create an impact in your organization by taking up small projects/initiatives to solve

Practical Applications of Market Basket Analysis

make sense to sell soda and chips or soda and crackers?

2. For the given Margin per period of $1000000 and Customer

[For Number of periods up to 10]

This file is meant for personal use by [email protected] only.

You might also like