Name: Vanila Mehta

Roll No.: P40049

Section: A
This case is about identifying clusters for segmentation for ICICI Bank. This would
help in identifying cluster basic characteristics, life styles and mindsets of existing customers
and the potential customers as well. The responses were collected on a scale of 1 (strongly
agree) to 5 (strongly disagree).
After getting the data, it is entered into SPSS to develop the Agglomeration schedule which
will give information on the objects being combined at each stage of a hierarchical clustering
process. Analyzing the below Schedule it can be observed that 4 schedules can be formed if
the schedule is read from bottom to top as it is seen that the difference in the value of the
clusters starts to reduce to a very small value after the 5th row from the bottom.
On the basis of the subjective knowledge of market, product, economical environment the
distance cluster combine can be chosen. In this case we take it as 15 which leads to the
formation of 3 clusters which can be observed from the dendrogram given below.

After the formation of the Dendrogram the K-mean analysis is done with a 90% significance.

The variance ratio criterion is calculated from 2 to 12 (given that there are 13 variables). The
point at which the omega value is less will be equal to the total number of clusters to be
developed. As can be seen from the calculation carried out in the EXCEL sheet the minimum
value of the omega is obtained at k = 8. Hence, the effective clusters developed by this
method are 8 in number.
 Cluster1 Cluster2 Cluster3 Cluster4 Cluster5 Cluster6 Cluster7 Cluster8
1 2 9 10 5 3 7 8
4 13 16 14 19 6 11
17 18 12
15
20

It can observed that the customer base can be divided into eight clusters depending on various
level of basic characteristics like life-style, mindsets, economic conditions etc.
After carrying out the above analysis it can be observed that the Cluster 4 can be targeted by
the bank given that it is showing the most promising response to all the variables further the
cluster 6 can also be targeted given that it is showing a similar response but at a lower degree
as compared to that of the Cluster 4.