INFORMATION SYSTEMS AND BUSINESS ANALYTICS

DEAKIN BUSINESS SCHOOL

DEPARTMENT OF INFORMATION SYSTEMS AND BUSINESS ANALYTICS

MIS784 Marketing Analytics

Assignment Two Background This is an individual assignment, which requires you to analyse a given data set, interpret, draw conclusions from your analysis, and then convey your conclusions in a written report

Percentage of final grade 30% Due date Thursday 24th September 2020 8:00pm

The assignment must be submitted by the due date electronically in CloudDeakin. When submitting electronically, you must check that you have submitted the work correctly by following the instructions provided in CloudDeakin. Please note that we will NOT accept any hard copies or part of the assignment submitted after the deadline or via Email. Extensions of time are not permitted. 5% will be deducted from the 20 marks allocated to this assessment task for each day that the assessment is late, up to five days. Penalties include weekend days. Where work is submitted more than five days after the due date, the task will not be marked and the student will receive 0% for the task. The assignment uses TESCO.xlsx which can be downloaded from CloudDeakin.

MIS784 – Marketing Analytics Assignment 2 – Trimester 2, 2020 Page 2

Assurance of Learning This assignment assesses following Graduate Learning Outcomes and related Unit Learning Outcomes:

Graduate Learning Outcome (GLO) Unit Learning Outcome (ULO) GLO1: Discipline-specific knowledge and capabilities: appropriate to the level of study related to a discipline or profession. GLO2: Communication: using oral, written and interpersonal communication to inform, motivate and effect change GLO3: Digital literacy: using technologies to find, use and disseminate information GLO5: Problem Solving: creating solutions to authentic (real world and ill define) problems.

ULO1: To apply analytics models to a wide range of marketing activities ULO2: Use computer software to analyse consumers’ data and understand the strength and limitations of each software ULO3: Analyse and interpret the output of a range of Customer analytics models in order to improve the decision making process ULO4: Demonstrate comprehensive understanding of Customer analytics models ULO5: Demonstrate ability to communicate the findings in writing in a way that is useful for both academics and practitioners.

Feedback Prior to submission Students are able to seek assistance from the teaching staff to ascertain whether the assignment conforms to submission guidelines. Please posted your questions on CloudDeakin’s discussion forum for Assignment 1. After submission Your assignment feedback will be returned in a rubric via CloudDeakin with an overall mark together with comments. In order to understand any areas of improvement, students are expected to refer, and compare, their answers to the suggested solutions.

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Case Study

Tesco PLC is a British multinational supermarket chain headquartered in Welwyn Garden City,

Hertfordshire, England, United Kingdom. It is the third largest retailer in the world measured by profits

and second-largest retailer in the world measured by revenues. It has stores in 12 countries across Asia

and Europe and is the grocery market leader in the UK, Ireland, Hungary, Malaysia, and Thailand. The

company currently offers products in nine different categories including Apparel, Bakery, Deli, Dairy,

Fresh Produce, General Merchandise, Grocery, Liquor, and Meat.

Tesco launched its customer loyalty scheme, the Tesco Clubcard, in 1995, with two levels (Silver and

Gold). It has been cited as a pivotal development in Tesco’s progress towards becoming the UK’s largest

supermarket chain and one that fundamentally changed the country’s supermarket business. Cardholders

can collect one Clubcard point for every £1 they spend in a Tesco store, or at Tesco.com. This enables

the company to collect data on purchase behaviour of customers and utilize it to design customized offers

and conduct targeted retention campaigns.

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Data

The data of this assessment task relates to a random sample of 30,000 customers from Tesco Clubcard

(20,000 training set & 10,000 test set) in a period from 1 January 2015 to 31 December 2015. The 18

variables in the data table are described below:

Variable Name Description

ID Unique ID of customers

Purchase Number of purchases during the observation period1

T.last The time gap between customer’s first purchase and last purchase during the observation period

T.active The time gap between customer’s first purchase and the last day of the observation period

Loyalty A binary variable to show membership level: (0) Silver (1) Gold

Service Failure Number of service failures during the observation period

Total Profit Total profit generate by the customer during the observation period

AP.spent Total spending on Apparel category during the observation period

BH.spent Total spending on Bakery category during the observation period

DL.spent Total spending on Deli category during the observation period

DY.spent Total spending on Dairy category during the observation period

FV.spent Total spending on Fresh Produce category during the observation period

GM.spent Total spending on General Merchandise category during the observation period

GR.spent Total spending on Grocery category during the observation period

LQ.spent Total spending on Liquor category during the observation period

MT.spent Total spending on Meat category during the observation period

Socio.Economic Socio Economic status of the customer on a scale from 1(lowest) to 10 (highest)

Churn A binary variable to show the churn status of the customer in the prediction period2 (0) non-churner (1) churner

Analysis Tasks

1- Construct a model to predict customer churn using logistic regression and evaluate the performance of the constructed model on the holdout sample provided (use metrics related to confusion matrix).

2- Evaluate the performance of the constructed model against the RFM method (use lift chart- i.e. concentration to make the comparison).

Report Tasks

1- Introduction and problem definition 2- Literature review: Use only academic journal articles. APA style should be used for

referencing.

1 Observation Period: From 1 January 2015 to 31 August 2015 2 Prediction Period: From 1 September 2015 to 31 December 2015

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3- Methodology and empirical study: this should include a discussion of your analytical techniques, your model evaluation metrics, your working data, and your model building process.

4- Results: evaluate your analysis results to explain how your constructed models perform and also how they are positioned against a base model (random guessing).

5- Conclusion and Recommendations: This should consider the implications of your results and how they may reduce marketing expenditure and contribute to customer retention.

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Submission The assignment consists of two parts: Analysis and Report. You are required to submit both your written report (approx. 3000 words) and analysis file (conducted in Excel). • Analysis Students are expected to complete the analysis tasks in Excel and on the training and test datasets. The analysis file is expected to be a part of your submission. Before submitting your analysis make sure it is logically organised and any incorrect or unnecessary output has been removed. In your Excel file all calculated figures are expected to be tied to appropriate Excel functions. Note: Give your analysis file an appropriate name such as MIS784_A2_studentID.xlsx. • Report The report should be written based on your analysis output and be formatted as an academic report (journal/conference paper). Note: Name the report with an appropriate file name such as MIS784_A2_studentID.docx.

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Criteria Unsatisfactory Satisfactory Good Very Good Excellent

Analysis: Analytical results (Marks: 5) GLO1, GLO3, GLO5

1.2 No analysis is presented or Irrelevant/inappropriate techniques have been used to analyse the data with many errors in the analysis

2.7 Consistently, independently and skilfully uses appropriate data analysis techniques, demonstrating some expertise and specialised skills

3.2 Consistently, independently and skilfully uses appropriate data analysis techniques, demonstrating good expertise and specialised skills

3.7 Uses appropriate data analysis techniques independently, efficiently and effectively, and demonstrating a consistently high levels of expertise and specialised skills.

5 Uses most suitable data analysis techniques independently, efficiently and effectively, and demonstrating a consistently high levels of expertise and specialised skills.

Report: Discussion of the background or context of the inquiry (Marks: 4) GLO1 and GLO5

1 Provides no relevant research question/s and/or little or no discussion of the problem

2.2 Provides research question/s linked to the inquiry as well as some discussion of the problem

2.6 Provides clear and actionable research question/s well linked to the inquiry as well as a good discussion of the problem

3 Provides clear and actionable research question/s as well as a very good discussion of the

problem

4 Provides clear and actionable research question/s as well as an excellent discussion of the problem

Report: Discussion of how the inquiry is situated within the wider scholarly literature (Marks: 6) GLO1, GLO2, and GLO5

1.5 Provides little or no discussion of how the inquiry is situated within the wider scholarly literature. Does not draw on literature that relates to the specific

issue

3.3 Provides some discussion of how the inquiry is situated within the wider scholarly literature, drawing on some literature that relates to the specific issue which the inquiry addresses

3.9 Provides a good discussion of how the inquiry is situated within the wider scholarly literature, drawing on a wide range of literature that relates to the specific issue which the inquiry addresses

4.5 Provides a very good discussion of how the inquiry is situated within the wider scholarly literature, drawing on a very wide range of literature that relates to the specific issue which the inquiry addresses

6 Provides an excellent discussion of how the inquiry is situated within the wider scholarly literature, drawing on an extremely wide range of literature that relates to the specific issue which the inquiry addresses

Report: Discussion of the final method of inquiry (Marks: 6) GLO5

1.5 Provides little or no discussion of the final method of inquiry

3.3 Provides some discussion of the final method of inquiry, including some discussion of methodological considerations

3.9 Provides a good discussion of the final method of inquiry, including a comprehensive discussion of methodological considerations

4.5 Provides a very good discussion of the final method of inquiry, including a very comprehensive discussion of methodological considerations

6 Provides an excellent discussion of the final method of inquiry, including an extremely comprehensive discussion of methodological considerations

Report: Discussion of the results of the inquiry (Marks: 6) GLO2 & GLO5

1.5 Provides little or no discussion of the results of the inquiry, with little or no summary of the results, analysis of those results

3.3 Provides some discussion of the results of the inquiry, including some summary of the results, analysis of those results

3.9 Provides a good discussion of the results of the inquiry, including a comprehensive summary of the results, analysis of those results

4.5 Provides a very good discussion of the results of the inquiry, including a very comprehensive summary of the results, analysis of those results

6 Provides an excellent discussion of the results of the inquiry, including an extremely comprehensive summary of the results, analysis of those results

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Report: Critical appraisal of the final findings of the inquiry (Marks: 3) GLO2 & GLO5

0.7 Provides little or no critical appraisal of the final findings of the inquiry, with little or no consideration of the implications of the results or of any further research that could be undertaken

1.6 Provides some critical appraisal of the final findings of the inquiry, including some consideration of the implications of the results and of any further research that could be undertaken

1.9 Provides a good critical appraisal of the final findings of the inquiry, including a comprehensive consideration of the implications of the results and of any further research that could be undertaken

2.2 Provides a very good critical appraisal of the final findings of the inquiry, including a very comprehensive consideration of the implications of the results and of any further research that could be undertaken

3 Provides an excellent critical appraisal of the final findings of the inquiry, including an extremely comprehensive consideration of the implications of the results and of any further research that could be undertaken

Overall Score Fail (N) 0 or more

Pass (P) 15 or more

Credit (C) 18 or more

Distinction (D) 21 or more

High Distinction (HD) 24 or more