MRA Project – Milestone 1

Ch. Sai Raj Shekhar

 Contents
➢Executive Summary of the data

➢EDA and Inferences

➢Customer Segmentation – RFM Analysis

➢Inferences from RFM analysis

 Problem Statement
An automobile parts manufacturing company has collected data of transactions for 3 years.
They do not have any in-house data science team; thus, they have hired you as their
consultant. Your job is to use your magical data science skills to provide them with
suitable insights about their data and their customers.

Auto Sales Data: Sales_Data.xlsx

 Data Summary
▪ The data is regarding an auto parts manufacturing company
▪ There are 20 variables with 2747 rows
▪ Of the 20 variables, 7 are continuous, 1 is a date-time and 12 are categorical variables
▪ The data contains information about 89 customers from 19 different countries
▪ There are 7 product lines namely – Motorcycles, Classic Cars, Trucks and Buses,
Vintage Cars, Planes, Ships and Trains, with 109 unique products
▪ There are no null values observed in the given data set
Boxplot – Product Line sales

Here we observe that, the outliers are present for

the sales of all the product lines, however, the
highest value of the outlier is for the classic cars,
followed by the vintage cars.
Univariate (Histograms)
Bivariate Analysis – Country vs Sales
Bivariate Analysis – Country vs Sales
Product Line sales in USA
Sales Summary
▪ The company has the largest
customer base in the USA,
followed by Spain and France
and Spain.
▪ Least customer base seen in
Philippines and Ireland.
▪ The maximum sales are
observed in the classic cars
followed by the vintage cars.
However the least sales is seen
for the Trains.
Quantity ordered by Customers
▪ From the adjacent figure, it is
observed that the company is
facing major demand from
Euro Shopping Channel and
Mini Gifts Distributors Ltd.
Product line sales to Customers
Here we see that the company’s
sale towards the two customers is
maximum for classic cars
followed by that for the Vintage
cars.
Sales Trend
In the sales trend, we can see that
there seems to a recurring pattern
in the overall sales during the
months of November.
 SUMMARY
▪ The main market for the company lies in USA, followed by Spain and France
respectively

▪ Spain based Euro shopping channel and the Mini Gifts Distributors are the most
frequently transacting customers

▪ Sales are least towards Philippines and Ireland

▪ Highest sales are seen for the classic cars followed by the vintage cars and the trains
has the least sales among all the product lines
 RFM Analysis
RFM stands for the following –
▪ R – Recency - most recent transaction with a customer.
In our scenario, this may be defined as:
Recency in days = Datediff(max(last_orderdate) – last_orderdate)
▪ F – Frequency – most frequently transacting customer
In our scenario, count(ORDERNUMBER)
▪ M – Monetary – high worth.
In our scenario, sum(SALES) grouped by customernames

4 Bins will be created based on the quartiles and will be named – Platinum, Gold, Silver
and Bronze.

They are classified based on the RFM scoring.

For the RFM analysis, we will use KNIME.

RFM Analysis – KNIME
Customer Segmentation – 3 Bins
 Customer Segmentation – 4 Categories

▪ Based on the segmentation in the previous slide, the customers in the High category
are split into Platinum and Gold, those in the Medium category are classified into
Silver segment and those in the Low are classified into Bronze segment.

▪ Assumptions and Parameters –

i. The present date (12th Dec’21) is assumed to the maximum order date and the
Recency is calculated based on that
ii. The count of the order numbers is assumed to be Frequency
iii. The sum of sales is assumed to be Monetary
Customer Segmentation – Data
 Best customers
Customer Country
Euro Shopping Channel Spain
The top five customers are from
Mini Gifts Distributors Ltd. USA Spain, USA, Australia and
La Rochelle Gifts France France.
The Sharp Gifts Warehouse USA
Souveniers And Things Co. Australia
 Customers at the verge of Churning
Customer Country
AV Stores, Co. UK
The five customers who are at
Land of Toys Inc. USA the verge of churning are from
Rovelli Gifts Italy Spain, USA, Italy and UK.

Online Diecast Creations Co. USA

Corrida Auto Replicas, Ltd Spain
 Lost customers
Customer Country
Bavarian Collectables Imports, Co. Germany
The five customers who are at
Double Decker Gift Stores, Ltd UK the verge of churning are from
Cambridge Collectables Co. USA Spain, USA, Germany and UK.

West Coast Collectables Co. USA

CAF Imports Spain
 Loyal customers
Customers Country
Euro Shopping Channel Spain
The table shows the customers
Mini Gifts Distributors Ltd. USA with high Recency and
La Rochelle Gifts France Frequency.

The Sharp Gifts Warehouse USA

Souveniers And Things Co. Australia
 RFM Inferences
▪ Need to focus on the Platinum and the Gold customers

▪ Shift the resources from the customers under the Bronze category and dedicate them
on silver and the Gold customers so that they may been seen under Gold and
Platinum categories respectively in the near future

▪ Diversify investments and spread business in Spain, France and Australian markets
as the demand is more from the customers of these regions apart from USA

▪ Focus can be more on the classing and vintage car segments

 Links
Tableau – LINK – All the graphs have been generated using Tableau

RMF Segmentation –

KNIME -
Thank You