DATA ANALYSIS AND DATA SCIENCE USING PYTHON
TASK - 3
Task 3: Clustering Analysis – Customer Segmentation
Objective
Perform customer segmentation using clustering techniques to group customers based on their
purchasing behavior, allowing businesses to target each segment effectively.
Project Steps
Step 1: Dataset Selection
● Dataset Name: customer_data.csv
● Columns:
○ Customer ID: Unique identifier for each customer.
○ Age: Age of the customer.
○ Annual Income: Income in $ (or any currency).
○ Spending Score: A score assigned to customers based on their spending
patterns and behavior.
Step 2: Tasks to Perform
1. Load the Dataset
● Use libraries such as Pandas to load the dataset into a DataFrame.
● Inspect the dataset by checking:
○ Shape, missing values, duplicates, and data types.
○ Summary statistics to understand ranges of values.
2. Data Preprocessing
● Standardize the data:
○ Use a scaler (e.g., StandardScaler or MinMaxScaler from sklearn) to ensure
all features are on the same scale.
○ This step is crucial since clustering algorithms are sensitive to feature
magnitudes.
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3. Clustering
● Determine the optimal number of clusters:
○ Use the Elbow Method:
■ Plot the Within-Cluster Sum of Squares (WCSS) against the number of
clusters.
■ The "elbow point" indicates the optimal number of clusters.
○ Alternatively, use the Silhouette Score for evaluation.
● Apply K-Means Clustering:
○ Use the optimal number of clusters identified from the Elbow Method.
○ Assign a cluster label to each customer.
4. Visualization
● Create visualizations to represent the clusters:
○ 2D Scatter Plot:
■ Use PCA (Principal Component Analysis) or t-SNE to reduce
dimensions to two for visualization.
■ Plot clusters in different colors.
○ Pair Plots: Visualize relationships between features within clusters.
○ Centroid Visuals: Show the centroid of each cluster for better interpretation.
Deliverables
1. Clustered Dataset:
○ Add a new column to the dataset with the assigned cluster labels for each
customer.
2. Visualizations:
○ A 2D scatter plot representing customer clusters.
○ Elbow Method plot showing the optimal number of clusters.
○ Any additional visuals (e.g., pair plots, heatmaps).
3. Recommendations:
○ Insights and actions based on clusters:
■ Which groups to target for promotions or premium products.
■ Identify high-spending customers and propose loyalty programs.
■ Tailored marketing strategies for different age or income segments.
Main Flow Services and Technologies Pvt. Ltd.
Contact Us. +91 9389641586, +91 97736 99074
Email-Add. contact.mainflow@gmail.com
www.mainflow.in
Expected Outcomes
● Segment customers into meaningful groups based on purchasing behavior.
● Identify key patterns or trends for actionable insights.
● Provide a visual understanding of customer groups for strategic planning.
● Facilitate better customer targeting, marketing strategies, and resource allocation.
Deadline Compliance
● Restriction: Submit the project within 7 days from the start date.
● Reason: Meeting deadlines is crucial in the real-world software development
environment. This restriction helps students practice time management and task
prioritization. In professional settings, tight deadlines are often the norm, and learning
to meet them without compromising quality is an essential skill.
● Learning Outcome: Students will learn to manage their time effectively, complete
projects under pressure, and deliver results on time, which are all important skills in
the workplace.
Main Flow Services and Technologies Pvt. Ltd.
Contact Us. +91 9389641586, +91 97736 99074
Email-Add. contact.mainflow@gmail.com
www.mainflow.in
