G10 Sticks Kebob Assignment - Answers - DDM
G10 Sticks Kebob Assignment - Answers - DDM
G10 Sticks Kebob Assignment - Answers - DDM
SEGMENTATION
GROUP 10
36BM22 HARSH VARDHAN SINGH 36BM49 SHASHWAT
However, the most important factors which affect our target clusters are:
1. Part of community 2. Pleasant Ambiance 3.Healthy menu options 4. Convenient place to eat
FORCLUSTER1
Average Ranking
Convenient place to eat 1.64 1 Part of community
Variety of menu options 1.61 2 Pleasant ambiance
Good value for money 1.21 3 Convenient place to eat
Healthy menu options 1.35 4 Variety of menu options
Food taste and satisfaction 1.03 5 Friendly staff
Friendly staff 1.5
Pleasant ambiance 1.7
Consistency / reliability 1.32
Part of community 2.12
FORCLUSTER3
Average Ranking
Convenient place to eat 1.31 1 Part of community
Variety of menu options 1.47 2 Healthy Menu Options
Good value for money 1.24 3 Pleasant Ambiance
Healthy menu options 1.55 4 Variety of Menu Options
Food taste and satisfaction 1.02 5 Friendly Staff
Friendly staff 1.42
Pleasant ambiance 1.52
Consistency / reliability 1.17
Part of community 1.85
Locating near easy to access spaces frequented by businesses, the working age population and
students would be beneficial.
A location with business centers, education centers with sports, arts and culture centers around seems
to be the best bet for sticks where health-conscious people are more likely to serve patronage.
They should stick to a healthy menu and add more items in the menu along with maintaining and
improving ambiance and being accessible around offices to catch more eyeballs and footfalls. (Excel
File for detailed Analysis)
b.) What does the survey data tell us (if anything) about the differences between customers and non-
customers?
Ans: Based on Demographic Factors: Women are the majority customers and even in Non-Customers
Women dominate which could be by design or accident. However, women do seem to be the
predominant patrons so women specific focus in designing menus, marketing campaigns seems to be
the market aligned option to proceed with.
26-40 Age Group is the major customer base with 41-65 age group following in next. Among the non-
customers it’s just the opposite but the same age groups remain dominant. Thus, focusing on Working
Age clientele seems to be the right strategy for marketing as well as location.
Low to Mid Income groups of up to 100k Income seem to be the biggest customer as well as non-
customer bases and a focus on designing products affordable and of value to them seems to be the
way ahead.
Families and Working Age single people are the main client base and even among non-customers
these two groups are the most prominent so focusing on separate value-added meal packages centered
around them seems to be the way to go for sticks.
Business Class folks seem to make a very big chunk of all customers as well as non-customer base
who seem to patronize sticks for a quick healthy meal and keeping their needs in focus seems to be
the right go to strategy for sticks.
Educators among customers indicate Sticks proximity to educational institutions and Homemakers
make up a big chunk of non-customers as well. A strategy to go with food trucks around educational
and business district and a plan to create a value proposition for homemakers is also a way to grow.
CUSTOMER NON=CUSTOMER
Male Female Male Female
39 156 26 124
Gender Gender
20.00% 80.00% 17.33% 82.67%
Profession Profession
Accountant 7 3.59% Accountant 4 2.56%
Lawyer 3 1.54% Lawyer 2 1.28%
Contractor 1 0.51% Contractor 9 5.77%
Design 10 5.13% Design 6 3.85%
Educator 43 22.05% Educator 26 16.67%
Homemaker 17 8.72% Homemaker 53 33.97%
Business 114 58.46% Business 56 35.90%
In terms of Activities Pursued by kids, both customers and non-customers show a lot of similarities.
However, there are some differences: they both consider visiting local attractions as the highest
participated in activity, they both consider swimming, visiting children's museums and soccer as
important activities. Non-customers follow music whereas customers are more into attending local
sporting events.
The differences may be because the non-customers are mostly singles whereas the customers are
mostly family-oriented people. Hence targeting activity and cultural recreation centres where non-
customers of the target clusters engage in could be a prominent strategy to gain their attention.
"Eating Out" and "Volunteer Work" seems to be the top activities pursued by adults in our customer
segment and non-customer segment as well as target clusters. This signals that nudging them through
offering value propositions which make eating out more lucrative can be a strategy to gain more
patronage. Being present in cultural centers by organizing volunteer activities such as soup kitchens
can help bring more brand recall positively.
In terms of factors for choosing a restaurant or a QSR to visit:
FORALLCUSTOMERS
Average Ranking
Convenient place to eat 1.46 1 Part of community
Variety of menu options 1.71 2 Pleasant ambiance
Good value for money 1.31 3 Variety of menu options
Healthy menu options 1.45 4 Friendly Staff
Food taste and satisfaction 1.06 5 Convenient place to eat
Friendly staff 1.62
Pleasant ambiance 1.77
Consistency / reliability 1.26
Part of community 2.11
FORALLNON-CUSTOMERS
Average Ranking
Convenient place to eat 1.73 1 Part of community
Variety of menu options 1.62 2 Healthy menu options
Good value for money 1.31 3 Pleasant ambiance
Healthy menu options 2.05 4 Convenient place to eat
Food taste and satisfaction 1.20 5 Variety of menu options
Friendly staff 1.57
Pleasant ambiance 1.74
Consistency / reliability 1.47
Part of community 2.38
While both customers as well as non-customers rank part of being a community as the topmost reason
for choosing a restaurant or a QSR to visit, the non-customers rank healthy menu options as the
second most important factor whereas the customers rank pleasant ambience as the second most
important factor which is chosen as the 3rd most important factor by the non-customers. It is to be
expected, since customers are already assured of the healthy menu options, and they want variety of
menu options now.
It would be sensible to offer variety in menu options to the existing customers to maintain their
patronage while maintaining and enhancing pleasant ambience. Any new location to be considered
should keep the factor of being part of community in mind and should be located at a convenient
place to access. Furthermore, sticks shop can organise activities such as soup kitchen and sponsor
other meaningful social events to enhance the perception that they are a strong part of community.
Maintaining local friendly staff and training them to be friendly to the customers is another such
activity which can bring positive return on investment.
Customers eat at home fewer times than non-customers and skip lunches fewer times a week as well.
Some promotion and visibility enhancing activities would help attracting non-customer’s attention
and focusing on value for the non-customers can add more patronage from them.
Non-Customers bring lunch to work fewer number of times than our customers in a week and that
gives us another opening to target value added propositions for work lunches by both informing them
via direct mail about in store offers for office lunches as well as buy Arranging for food trucks near
office locations. Some pamphlet distribution informing customers about work lunch offers would also
nudge non-customers to consider having more launches at sticks kebab shop.
Customers access coupons from loyalty card reward preferably while store receipt offers and direct
mail being there second preferred method to access coupons. Non-Customers preferred direct mail as
their most preferred method to access coupons and they access coupon sites or store receipt offer as
other methods.
Non-Customers can be made aware of offers that seem like a value-added proposition to them through
direct mail as well as through spreading coupons to the coupon sites or blogs. The customers should
be regularly given loyalty card rewards and store receipt offers as these methods are quite popular
amongst them.
By continuing to spread coupons through the channels suggested above sticks shop can cover
customers as well as non-customers segments both quite evenly and may even increase patronage of
non-customers and frequency of customers.
(EXCEL FILE FOR DETAILED ANALYSIS)
Q2. Run a cluster analysis using the bases (M-0866X-Bases.csv). If you need a description of the
variables, see the Data Dictionary (M-0866X-Data_Dictionary.csv).
a. How many segments are in the market?
Ans: There are 5 Segments in the market as per elbow plot and iterative k-means clustering analysis. 5
segments segment the consumer base most appropriately. R console was used to conduct
segmentation which included hierarchical clustering, elbow plot and k-means clustering run through
10 iterations to find weighted sum of squares of Euclidean distance between points and led to 5
clusters.
5 CLUSTERS
PROFILE OF SEGMENT 1
CLUSTER1
Number %ge Remark
Total 57
Non Customers 14 24.56%
3/4th Customers
Customers 43 75.44%
Plan Carefully
Strongly Agree 1 57 100.00% PLANNERS
Agree 2
Bad at Spending
Disagree 3 57 100.00% ECONOMICAL
Strongly Disagree 4
Local Purchase
Important LOCAL
56 98.25%
Strongly Agree 1 MATTERS
Agree 2
Healthy Food
HEALTH
Strongly Agree 1 57 100.00%
CONCIOUS
Agree 2
15 26.32% Single
Family Type 34 59.65% 3/5th Family
8 14.04% Other
Income
Low to Mid
>50k - 1 43 75.44%
Income
50-100k - 2
Gender Majority
45 78.95%
Female -1 Women
12 21.05% Educator
9 15.79% Homemaker
Profession
Business
30 52.63%
(Majority)
First Cluster is made of 75% customers and 25% non-customers who consider themselves
good planners.
Buying local products matters to them and nearly 60% of them are family units.
Low to mid income group of those earning up to 100,000 U.S. dollars make a majority of
them and mostly women dominate this group.
PROFILE OF SEGMENT 2
CLUSTER2
Number %ge Remark
Total 35
Non Customers 26 74.29% 3/4th
Customers 9 25.71% Non-Customers
Plan Carefully
Strongly Agree 1 28 80.00% PLANNERS
Agree 2
Bad at Spending
Strongly Agree 1 27 77.14% SPENDTHRIFT
Agree 2
Local Purchase
LOCAL
Important
26 74.29% DOESN'T
Disagree 3
MATTER
Strongly Disagree 4
Healthy Food
Disagree 3 25 71.43% TASTE> HEALTH
Strongly Disagree 4
7 20.00% Single
Family Type 18 51.43% 1/2 Family
10 28.57% Other
Income
Low to Mid
>50k - 1 28 80.00%
Income
50-100k - 2
Gender Majority
26 74.29%
Female -1 Women
9 25.71% Business
8 22.86% Homemaker
Profession
Others
10 28.57%
(Majority)
Nearly 77% of them consider themselves spendthrift who have trouble controlling their
spending.
Cluster 2 has nearly half family units and rest of them are single or have other family types.
PROFILE OF SEGMENT 3
CLUSTER3
Number %ge Remark
Total 125
Non Customers 54 43.20% Almost Equal
Customers 71 56.80% Mix
Plan Carefully
Strongly Agree 1 103 82.40% PLANNERS
Agree 2
Bad at Spending
Strongly Agree 1 125 100.00% SPENDTHRIFT
Agree 2
Local Purchase
Important LOCAL
122 97.60%
Strongly Agree 1 MATTERS
Agree 2
Healthy Food
HEALTH
Strongly Agree 1 124 99.20%
CONCIOUS
Agree 2
32 25.60% Single
Family Type 75 60.00% 3/5th Family
18 14.40% Other
Income
Low to Mid
>50k - 1 103 82.40%
Income
50-100k - 2
Gender Majority
109 87.20%
Female -1 Women
25 20.00% Educator
18 14.40% Homemaker
Profession
Business
57 45.60%
(Majority)
Segment 3 comprises of 125 people making it the biggest segment which is equally
divided between customers as well as non-customers.
A majority of them considered themselves as good planners but they think they have
trouble controlling their spending which makes them spendthrifts.
In an overwhelming majority this segment considers buying local products important and
is very health conscious in their choice of food items.
3/5th of this segment our family units with 1/4th of them singles and most of them are
women.
Segment 3 is mostly low to mid income group of people most of whom are in business
and the rest are educators or homemakers.
PROFILE OF SEGMENT 4
CLUSTER4
Number %ge Remark
Total 85
Non Customers 51 60.00% 3/5th Non-
Customers 34 40.00% Customers
Plan Carefully
Strongly Agree 1 68 80.00% PLANNERS
Agree 2
Bad at Spending
85 100.00% ECONOMICAL
Disagree 3
Local Purchase
Important LOCAL
79 92.94%
Strongly Agree 1 MATTERS
Agree 2
Healthy Food
HEALTH
Strongly Agree 1 69 81.18%
CONCIOUS
Agree 2
19 22.35% Single
Family Type 51 60.00% 3/5th Family
15 17.65% Other
Income
Low to Mid
>50k - 1 69 81.18%
Income
50-100k - 2
Gender Majority
76 89.41%
Female -1 Women
13 15.29% Educator
16 18.82% Homemaker
Profession
Business
32 37.65%
(Majority)
Cluster 4 comprises of 85 people offer which 60% are non-customers whereas 40% our
customers.
80% off cluster 4 consider themselves as good planners and economical people who do not
overspend.
Buying local matters to cluster 4 and they are health conscious in their choice of menu items
while visiting a restaurant.
60% of them our family units whereas nearly 22% of them are single and nearly 17% have
other family types.
Cluster 3 comprises of low to mid income groups who are made up of business owners,
educators and homemakers as they are preferred profession.
PROFILE OF SEGMENT 5
CLUSTER5
Number %ge Remark
Total 93
Non Customers 47 50.54% Almost Equal
Customers 46 49.46% Mix
Plan Carefully
Strongly Agree 1 74 79.57% PLANNERS
Agree 2
Bad at Spending
93 100.00% ECONOMICAL
Strongly Disagree 4
Local Purchase
Important LOCAL
83 89.25%
Strongly Agree 1 MATTERS
Agree 2
Healthy Food
HEALTH
Strongly Agree 1 81 87.10%
CONCIOUS
Agree 2
30 32.26% Single
Family Type 49 52.69% 1/2 Family
14 15.05% Other
Income
Low to Mid
>50k - 1 76 81.72%
Income
50-100k - 2
Gender Majority
74 79.57%
Female -1 Women
14 15.05% Educator
17 18.28% Homemaker
Profession
Business
41 44.09%
(Majority)
Cluster 5 comprises of 93 people who are in almost equal mix of customers as well as
non-customers.
A majority of them considers themselves as planners and economical people who do not
like to overspend.
Bing local product matters to a majority of cluster 5 and they are health-conscious people
while choosing from menu options at the restaurants.
Half of the cluster our family units whereas 32% of them are singles and a 15% of them
with other family types.
Nearly 82% of the cluster are low to mid income people with 44% in business, 18% as
homemakers and 15% as educators.
c. Which segment(s) should Sticks target? Provide justification.
Ans:
Cluster 3 is the biggest and most lucrative with spendthrift customers who can be big ticket
customers. They also prefer Local and healthy food and are planners. Overall Women make the
majority maybe because the survey responders were mostly women. Mostly Low- and Mid-Income
groups are predominant customers. Businesspeople make the most of our customers along with
homemakers and educators. Cluster 1 is already made up of customers and those who think alike
existing customers making targeting easier.
We should focus on Clusters 1,3 and drop 2 as they do not prefer healthy food items which is the USP
of sticks kebob. Clusters 2, 4 and 5 are economical and spend after much consideration which may be
another deterrent and even if they are targeted, they are unlikely to be big ticket spenders and would
not give as much return on investment as groups 1 and 3. Furthermore cluster 2 does not consider
buying local a priority and that is another reason for it to be discarded as a target.
Q3. Provide a recommendation and justification for the next location of Sticks Kebob Shop based on
your analysis.
Ans: LOCATION D Seems to be the best based on median age, median income and total spending as
well as profiles involved.
EXPLANATION: Based on sticks’ target cluster (1 and 3) demographics Location A and D match the
median age and income group who would be suitable for sticks’ to gain patronage from. A and D have
higher median income groups residing in the area and consumer spending is also on the higher side.
Looking at the customer profiles we will get further insights.