Step $2$: Complete and Submit Lab

Understanding Customer Segments for Better Marketing Strategies

Background: The marketing team at a drug retail company wants to enhance their customer engagement and tailor their marketing strategies more effectively. They decide to analyze their customer data to identify distinct segments based on purchasing behavior. The team believes that by understanding different customer groups, they can create more personalized marketing campaigns and improve overall customer satisfaction.

Dataset: The team collects data on $25$ customers, including the following variables:

CustomerID: Unique identifier for each customer

MonthlyPurchases: The number of purchases made by the customer each month

AveragePurchaseValue: The average amount spent by the customer per purchase

The dataset is saved in an Excel file for analysis.

Objective: The goal is to segment customers into distinct clusters based on their purchasing behavior, specifically their monthly purchases and average purchase value. By identifying these segments, the team aims to answer the following questions:

What are the distinct customer segments based on purchasing behavior?