MIS784 - Customer Analytics Assignment 3 – Trimester 2, 2016 Page 1 DEAKIN BUSINESS SCHOOL DEPARTMENT OF INFORMATION SYSTEMS AND BUSINESS ANALYTICS MIS784 Customer Analytics Assignment Three 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. Percentage of final grade 30% Due date Monday 17th October 2016 11.59pm The assignment must be submitted by the due date electronically in CloudDeakin. When submitting electronically, you must check that you have submitted the work correctly by following the instructions provided in CloudDeakin. Please note that we will NOT accept any hard copies or part of the assignment submitted after the deadline or via Email. Extensions of time are not permitted. A penalty of 10% of the 30 marks allocated to this assessment task will be deducted for each day or part day that the assessment is late. Penalties include weekend days. The assignment uses the files A3-TESCO.xlsx which can be downloaded from CloudDeakin.MIS784 - Customer Analytics Assignment 3 – Trimester 2, 2016 Page 2 Assurance of Learning This assignment assesses following Graduate Learning Outcomes and related Unit Learning Outcomes: Graduate Learning Outcome (GLO) Unit Learning Outcome (ULO) GLO1: Discipline-specific knowledge and capabilities: appropriate to the level of study related to a discipline or profession. GLO3: Digital literacy: using technologies to find, use and disseminate information GLO5: Problem Solving: creating solutions to authentic (real world and ill define) problems. ULO1: To apply analytics models to a wide range of marketing activities ULO2: Use computer software to analyse consumers' data and understand the strength and limitations of each software ULO3: Analyse and interpret the output of a range of Customer analytics models in order to improve the decision making process ULO4: Demonstrate comprehensive understanding of Customer analytics models Feedback Prior to submission Students can seek assistance from the teaching staff to ascertain whether the assignment conforms to submission guidelines: Dr Ali Tamaddoni: [email protected] After submission Your assignment feedback will be returned in a rubric via CloudDeakin with an overall mark together with comments. In order to understand any areas of improvement, students are expected to refer, and compare, their answers to the suggested solutions.MIS784 - Customer Analytics Assignment 3 – Trimester 2, 2016 Page 3 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.MIS784 - Customer Analytics Assignment 3 – Trimester 2, 2016 Page 4 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: Variable Name Description ID Unique ID of customers AP.spent.2014 Total spending on Apparel category in 2014 BH.spent.2014 Total spending on Bakery category in 2014 DL.spent.2014 Total spending on Deli category in 2014 DY.spent.2014 Total spending on Dairy category in 2014 FV.spent.2014 Total spending on Fresh Produce in 2014 GM.spent.2014 Total spending on General Merchandise in 2014 GR.spent.2014 Total spending on Grocery category in 2014 LQ.spent.2014 Total spending on Liquor category in 2014 MT.spent.2014 Total spending on Meat category in 2014 AP.spent.2015 Total spending on Apparel category in 2015 BH.spent.2015 Total spending on Bakery category in 2015 DL.spent.2015 Total spending on Deli category in 2015 DY.spent.2015 Total spending on Dairy category in 2015 FV.spent.2015 Total spending on Fresh Produce in 2015 GM.spent.2015 Total spending on General Merchandise in 2015 GR.spent.2015 Total spending on Grocery category in 2015 LQ.spent.2015 Total spending on Liquor category in 2015 MT.spent.2015 Total spending on Meat category in 2015 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 eatMIS784 - Customer Analytics Assignment 3 – Trimester 2, 2016 Page 5 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.MIS784 - Customer Analytics Assignment 3 – Trimester 2, 2016 Page 6 Submission The assignment consists of two parts: Analysis and Report. 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. Note: Give your analysis files an appropriate name such as MIS784_A3_studentID.xlsx & MIS784_A3_studentID.str.  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. Note: Name the report with an appropriate file name such as MIS784_A3_studentID.docx.MIS784 - Customer Analytics Assignment 3 – Trimester 2, 2016 Page 7 Appendix 1 Product category Margin Apparel (AP) 33% Bakery (BH) 32% Deli (DL) 36% Dairy (DY) 32% Fresh Produce (FV) 35% General Merchandise (GM) 44% Grocery (GR) 30% Liquor (LQ) 33% Meat (MT) 16%MIS784 - Customer Analytics Assignment 3 – Trimester 2, 2016 Page 8 Criteria Unsatisfactory Satisfactory Good Very Good Excellent Analysis: Analytical results (Marks: 12) GLO1 and GLO 3 2.9 No analysis is presented or Irrelevant/inappropriate techniques have been used to analyse the data with many errors in the analysis 0-5.9 6.5 Consistently, independently and skilfully uses appropriate data analysis techniques, demonstrating some expertise and specialised skills 6-7 7.7 Consistently, independently and skilfully uses appropriate data analysis techniques, demonstrating good expertise and specialised skills 7.1-8.2 8.9 Uses appropriate data analysis techniques independently, efficiently and effectively, and demonstrating a consistently high levels of expertise and specialised skills. 8.3-9.4 12 Uses most suitable data analysis techniques independently, efficiently and effectively, and demonstrating a consistently high levels of expertise and specialised skills. 9.5-12 Report: Selection of analytical techniques and evaluation of the methodology for improving marketing decision-making (Marks: 5) GLO1 and GLO5 1.2 Proposes no or inadequate solutions to existing and/or new situations in professional practice and/or further learning that indicate comprehension of a complex problem. Solutions do not consistently reflect any intellectual independence, adaptability and integrity. 0-2.4 2.7 Proposes an acceptable creative solutions to existing and/or new situations in professional practice and/or further learning that indicates satisfactory comprehension of a complex problem and reflects proficient judgement of the pros and cons of the proposed solution. 2.5-2.9 3.2 Proposes a good creative solution to existing and/or new situations in professional practice and/or further learning that indicates comprehension of a complex problem and reflects expert judgement of the pros and cons of the proposed solution. The proposed solution reflect a high level of intellectual independence and autonomy. 3-3.4 3.7 Proposes a very good creative, novel solution to existing and/or new situations in professional practice and/or further learning that indicates a comprehension of a complex problem and reflects an authoritative judgement of the pros and cons of the solution The proposed solution reflect a very high level of intellectual independence. 3.5-3.9 5 Proposes an exemplary creative, novel solution to existing and/or new situations in professional practice and/or further learning that indicates a deep comprehension of a complex problem and reflects an expert and authoritative judgement of the pros and cons of the proposed solution Solutions reflect an exceedingly high level of intellectual independence. 4-5 Report: Interpretation of analysis output from a business perspective (Marks: 5) GLO1 and GLO5 1.2 Provides no or a limited interpretation of the analysis output and no logical interpretations from a marketing stand point 0-2.4 2.7 Provides an acceptable interpretation of the analysis output and satisfactory interpretations from a marketing stand point 2.5-2.9 3.2 Provides a good interpretation of the analysis output and reasonable interpretations from a marketing stand point 3-3.4 3.7 Provides a very well interpretation of the analysis output and thorough interpretations from a marketing stand point 3.5-3.9 5 Provides an excellent interpretation of the analysis output and insightful interpretations from a marketing stand point 4-5 Report: Develop management recommendations (Marks: 5) GLO5 1.2 Provides no or limited guidance as to how solutions might be skilfully and creatively implemented in a manner that addresses multiple contextual factors of the problem. 0-2.4 2.7 Provides satisfactory guidance as to how solutions might be skilfully and creatively implemented in a manner that satisfactorily addresses multiple contextual factors of the problem. 2.5-2.9 3.2 Provides expert guidance as to how solutions might be skilfully and creatively implemented in a manner that adequately addresses multiple contextual factors of the problem. 3-3.4 3.7 Provides very good authoritative and expert guidance as to how novel solutions might be skilfully and creatively implemented in a manner that addresses sufficiently multiple contextual factors of the problem. 3.5-3.9 5 Provides outstandingly authoritative and expert guidance as to how novel solutions might be skilfully and creatively implemented in a manner that excellently addresses multiple contextual factors of the problem. 4-5MIS784 - Customer Analytics Assignment 3 – Trimester 2, 2016 Page 9 Report: Quality of writing, Report formatting & Table & Figures to support conclusions (Marks: 3) GLO1 0.7 Always or mostly uses inappropriate and/or irrelevant content to develop and explore basic ideas and presents an unacceptable exposition of complex knowledge and ideas. 0-1.4 1.6 Moderately uses appropriate, relevant, and compelling content to illustrate mastery of the subject or topic and presents a clear, coherent, independent and professional exposition of complex knowledge and ideas 1.5-1.7 1.9 Mostly uses appropriate, relevant, and compelling content to illustrate mastery of the subject or topic and presents a clear, coherent, independent and professional exposition of complex knowledge and ideas 1.8-2 2.2 Consistently uses appropriate, relevant, and compelling content to illustrate a mastery of the subject or topic and generates original knowledge, making a substantial contribution to a discipline or area of professional practice. 2.1-2.3 3 Consistently and effectively uses appropriate, relevant, and compelling content to illustrate a mastery of the subject or topic and generates original knowledge, making a very substantial contribution to a discipline or area of professional practice. 2.4-3 Overall Score Fail (N) 0 – 14.7 Pass (P) 15-17.7 Credit (C) 18-20.7 Distinction (D) 21-23.7 High Distinction (HD) 24 - 30