Business Intelligence Model for Customer Targeting Using Fuzzy-C-Means and FP-Growth

In the era of business, business intelligence (BI) technology can inform the decision-maker of the right data and insight. In this study, a business intelligence model is built to help the marketing department build an efficient promotion strategy. This paper aims to understand the impact of segmenting customers using the soft clustering technique (fuzz-c-means) based on their spending behavior or Recency, Frequency, and Monetary Model (RFM model) on product affiliation or market basket analysis to develop more efficient promotions to target customers. This aim is approached first by, downloading a dataset called online retail from Kaggle, exploring data to remove the missing value and detect and remove outliers, and constructing an RFM model (Recency, frequency, and monetary). Second, the clustering algorithm is performed fuzzy-c-means, to segment customers into clusters with similar characteristics. Third, product affiliation or association rules are obtained as per cluster using the FP-growth algorithm. Eventually, spending behavior is concluded to show a significant impact on product affiliation which means that clustering based on spending behavior increases the efficiency of market basket analysis (MBA).