Assignment
Background
This is an individual assignment, which requires you to analyse a given data set, interpret, draw conclusions from your analysis, and then convey your conclusions in a written report to a person with limited knowledge of Customer Analytics.
Case Study
Tesco PLC is a British multinational supermarket chain headquartered in Welwyn Garden City, Hertfordshire, England, United Kingdom. It is the third largest retailer in the world measured by profits and second-largest retailer in the world measured by revenues. It has stores in 12 countries across Asia and Europe and is the grocery market leader in the UK, Ireland, Hungary, Malaysia, and Thailand. The company currently offers products in nine different categories including Apparel, Bakery, Deli, Dairy, Fresh Produce, General Merchandise, Grocery, Liquor, and Meat.
Tesco launched its customer loyalty scheme, the Tesco Clubcard, in 1995, with two levels (Silver and Gold). It has been cited as a pivotal development in Tesco's progress towards becoming the UK's largest supermarket chain and one that fundamentally changed the country's supermarket business. Cardholders can collect one Clubcard point for every £1 they spend in a Tesco store, or at Tesco.com. This enables the company to collect data on purchase behaviour of customers and utilize it to design customized offers and conduct targeted retention campaigns.
Data
Transactional Data
The transactional data of this assessment task relates to a random sample of 10,000 customers from Tesco Clubcard in a period from 1 January 2014 to 31 December 2015. The variables in the data table are described below:
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Variable Name
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Description
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ID
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Unique ID of customers
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AP.spent.2014
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Total spending on Apparel category in 2014
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BH.spent.2014
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Total spending on Bakery category in 2014
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DL.spent.2014
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Total spending on Deli category in 2014
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DY.spent.2014
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Total spending on Dairy category in 2014
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FV.spent.2014
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Total spending on Fresh Produce in 2014
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GM.spent.2014
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Total spending on General Merchandise in 2014
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GR.spent.2014
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Total spending on Grocery category in 2014
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LQ.spent.2014
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Total spending on Liquor category in 2014
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MT.spent.2014
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Total spending on Meat category in 2014
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AP.spent.2015
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Total spending on Apparel category in 2015
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BH.spent.2015
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Total spending on Bakery category in 2015
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DL.spent.2015
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Total spending on Deli category in 2015
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DY.spent.2015
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Total spending on Dairy category in 2015
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FV.spent.2015
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Total spending on Fresh Produce in 2015
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GM.spent.2015
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Total spending on General Merchandise in 2015
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GR.spent.2015
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Total spending on Grocery category in 2015
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LQ.spent.2015
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Total spending on Liquor category in 2015
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MT.spent.2015
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Total spending on Meat category in 2015
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Survey Data
The data set also contains customers' response to the following statements on a scale from 1 (completely disagree) to 4 (completely agree), collected via a survey in December 2014:
1- When shopping , I always look at the price per ounce or price per unit information 2- When shopping , quality is the most important factor for me
3- I think it is important to purchase products that are made locally 4- I carefully consider the health benefits of what I eat
Task 1
- Use the survey data to create four customer segments Hint: use K-Means algorithm in IBM SPSS Modeler
Task 2
- Calculate CLV and ‘Total Segment Value' for each segment from Task 1 (discount rate = 3%)
Hint: use Microsoft Excel
Task 3
- Analyze and interpret your findings from Tasks 1 and 2
Hint: Start by identifying appropriate labels for the four customer segments created in Task 1.
(The "relative distribution" tab under "View: Clusters" option of your K-Means model nugget can help you with this task).
Task 4
Develop recommendations for TESCO using your findings from Tasks 1, 2, and 3.
You are required to submit both your written report (approx. 1500 words) and analysis files (conducted in Excel and IBM SPSS Modeler).
Analysis
Students are expected to complete the first analysis task in IBM SPSS Modeler and the second analysis task in Microsoft Excel. Both files are expected to be a part of your submission.
Before submitting your analysis make sure it is logically organised and any incorrect or unnecessary output has been removed. In your Excel file all calculated figures are expected to be tied to appropriate Excel functions.
Report
The report should be written based on your analysis output. As a general guide, you are expected to start your report with a brief introduction and after explaining your methodology and interpreting your analysis findings, conclude the report by a recommendations section.