Context This data set is created only for the learning purpose of the customer segmentation concepts , also known as market basket analysis . I will demonstrate this by using unsupervised ML technique (KMeans Clustering Algorithm) in the simplest form. Content You are owing a supermarket mall and through membership cards , you have some basic data about your customers like Customer ID, age, gender, annual income and spending score. Spending Score is something you assign to the customer based on your defined parameters like customer behavior and purchasing data. Problem Statement You own the mall and want to understand the customers like who can be easily converge [Target Customers] so that the sense can be given to marketing team and plan the strategy accordingly. Inspiration By the end of this case study , you would be able to answer below questions. 1- How to achieve customer segmentation using machine learning algorithm (KMeans Clustering) in Python in simplest way. 2- Who are your target customers with whom you can start marketing strategy [easy to converse] 3- How the marketing strategy works in real world KMeans Clustering K-means clustering is one of the simplest and popular unsupervised machine learning algorithms. You’ll define a target number k, which refers to the number of centroids you need in the dataset. A centroid is the imaginary or real location representing the center of the cluster. Every data point is allocated to each of the clusters through reducing the in-cluster sum of squares. In other words, the K-means algorithm identifies k number of centroids, and then allocates every data point to the nearest cluster, while keeping the centroids as small as possible. The ‘means’ in the K-means refers to averaging of the data; that is, finding the centroid. About the dataset This input file contains the basic information (ID, age, gender, income, spending score) about the customers of a mall. Spending Score is something you assign to the customer based on your defined parameters like customer behavior and purchasing data.
