Market mix modelling

Develop the best product or service and offer it at the right price through the right channels.

The key purpose of a Marketing Mix Model is to understand how various marketing activities are driving
the business metrics of a product. It is used as a decision-making tool by brands to estimate the
effectiveness of various marketing initiatives.
Our segmentation is based on similarities and differences between individual consumers and features
that characterise them …age 20 and 70,income 100000-150000,

age diff 50 ,income diff 50000 much weight for income.The numbers from 20-70 will be insignificant
when compared to income . In general we want to treat all our variables equally.
So we did standardizing.

HIERARCHIAL CLUSTERING

Found out there are 4 clusters

And we did the same using kmeans clustering

Segementation:
PCA :

These components are arranged in order of importance in this case how much the variance of
the data is explained by each component

PCA applies linear transformation of data which creates 7 new variables while some of them large
proportion of variance while others almost none. Together 7 components explains 100% variability of
the data

1st component explians 35%....our task is to preserve subset of components while preserving variance

array([0.35696328, 0.26250923, 0.18821114, 0.0755775 , 0.05716512,

0.03954794, 0.02002579])

At the 3 componenst it covers 80% of variance . Rule of thumb is to keep data above 80%. So we
choose 3.

After that we did kmean using this pca.

Purchase data:
Purchase occasion and purchase incidence

The average number of store visits for each of the four segments using a bar chart.

The
average
number of
purchases
by
segments
Each brand

Revenue from
Each brand