Analytical Methods for Unsupervised Learning

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Analytical Methods for Unsupervised Learning

Modern businesses collect massive amounts of customer data. However, data alone does not automatically create value. Organizations must analyze patterns in the data to understand different groups of customers. One powerful method used by companies worldwide is Cluster Analysis.

In the Philippine business environment-where markets are diverse and consumer behavior varies across income groups, regions, and digital adoption levels-cluster analysis becomes a powerful marketing analytics tool.

For example, a company like Jollibee Foods Corporation may use customer purchase data to determine which groups prefer family meals, value meals, or premium menu offerings.

Through this module, students will learn how cluster analysis works, how clustering algorithms operate, and how these techniques help businesses make data-driven marketing decisions.

Cluster Analytics

Cluster Analytics (also called Cluster Analysis) is a statistical technique used in Marketing Analytics to group customers into distinct segments based on similarities in their data - such as purchasing behavior, demographics, preferences, or engagement patterns.

Cluster analysis helps businesses identify groups of customers who behave similarly, allowing firms to design more effective marketing strategies, promotions, pricing, and product offerings.

In marketing analytics, cluster analysis is often used for:

Customer segmentation

Product grouping

Market segmentation

Behavioral analysis

Personalization strategies

Simply put:

Cluster Analysis equals Grouping similar customers together based on their behaviors or characteristics.

Example (Philippine Business Context)

Why is Cluster Analytics Important in Marketing?

How It Works (Conceptual Flow)

Why Cluster Analysis Matters in Marketing

How Is Cluster Analysis Used in Practice?

How Does a Cluster Analysis Function?

What Are the Types of Cluster Analysis?

How K-Means Works (Simple Explanation)

Exhibit Eight ways to Measure Similarity

Hierarchical Clustering

Agglomerative Clustering Process

Example (Philippine Retail)

Difference Between K-Means and Hierarchical Clustering

Hierarchical Clustering

Promotion and Advertising Effectiveness in Marketing Analytics

Understanding Promotion and Advertising

Advertising

Why Businesses Measure Advertising Effectiveness

One. Promotion and Advertising in Marketing

Two. Exploratory Data Analysis in Marketing

Advertising Data Exploration

Common EDA Techniques in Marketing

Two. Data Visualization

Four. Regression Analysis for Advertising Effectiveness

Simple Linear Regression in Advertising

Multiple Regression for Marketing Campaign Analysis

Example model:

Example:

Seven. Evaluating Advertising Effectiveness

Return on Advertising Spend

Customer Acquisition Cost

Conversion Rate

Eight. Using Excel for Promotion Analytics

Pricing Analytics and Price Elasticity Using Regression Analysis

One. Pricing Analytics in Marketing

Price Elasticity of Demand

Elasticity Formula

Interpretation of Elasticity Values

Marketing Insight

Three. Example two: Gasoline Pricing, Inelastic Demand

Data Example

Marketing Insight

How Price Elasticity Works

Role of Regression Analysis

Interpretation:

Example Pricing Simulation

Key Applications

Example:

Real Marketing Analytics Example in E-Commerce

Predictive Marketing Analytics

What is Predictive Marketing Analytics?

Importance of Predictive Marketing Analytics

Example: Streaming Platforms

Regression Analysis in Predictive Marketing

Example:

Advertising Prediction

Interpretation:

Example: Online Advertising

Neural Networks in Marketing Analytics

Applications of Neural Networks in Marketing

Real Business Example: Online Retail Recommendation Systems

Automated Machine Learning, also known as AutoML

Benefits of AutoML

Example: Marketing Automation Platforms

Applications of Predictive Marketing Analytics

Customer Segmentation

Sales Forecasting

Churn Prediction

Marketing Campaign Optimization

Overview

This document explores the application of cluster analysis in unsupervised learning, emphasizing its importance for businesses in customer segmentation and targeted marketing strategies. By utilizing various algorithms, organizations can gain insights into customer behavior and preferences, which can lead to more effective marketing campaigns and product strategies.

Key Points

1Cluster analysis helps businesses group customers based on similar behaviors or characteristics
2Effective use of clustering algorithms leads to improved marketing strategies
3Understanding distinct customer segments enhances personalized marketing efforts
4Businesses like Jollibee and Shopee utilize cluster analysis for data-driven decision-making
5K-Means and hierarchical clustering are popular methods in marketing analytics.

Details

Category: Technology and Engineering

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