HP Printers
Market
Industry
USA
Consumer Product
Category
ML Modelling, Customer Segmentation, Propensity Model
Problem Statement
The global printer market is a highly competitive and concentrated industry, valued at $45 billion in 2022 and growing at a CAGR of 6% through 2028. HP leads the market with a 25% share, followed by Canon and Brother. Key customers include home and personal users, small and medium enterprises, and large enterprises. The industry operates on a "razor and blade" business model, where printer hardware is sold at a loss to drive sales of higher-margin ink and toner cartridges.
We plan to leverage first-party customer data to gain valuable insights into customer behavior. We will start by visualizing the data to uncover trends and patterns. Then, we will segment customers based on these insights, allowing us to target specific groups effectively. Finally, we will employ machine learning modeling to identify key drivers influencing customer behavior and preferences. This comprehensive approach will enable us to make data-driven decisions and optimize our marketing strategies accordingly.
Data : We can use the following data columns to build a machine learning model that can predict customer behavior. For example, the model could be used to predict a customer's likelihood to purchase a new product, or to recommend products that a customer is likely to be interested in. By understanding customer behavior, businesses can improve their marketing campaigns and increase sales.
Our in-depth analysis of customer data empowers us to uncover valuable insights into consumer behavior. By examining factors such as demographics, product usage, and purchase history, we identify key customer segments and their preferences. These insights enable us to tailor our marketing strategies, product offerings, and customer experiences for maximum impact.
Customer Segmentation : I did customer segmentation analysis for HP Printer customers in the USA, categorizing them into five distinct groups based on factors such as average printer price, monthly ink usage, and subscription plan.
The segmentation reveals distinct customer behaviors. For instance, "Business Inksters" are identified as a high-value segment with high ink usage and a preference for color ink. On the other hand, "Frugals" are cost-conscious customers with low ink usage and a tendency to opt for third-party ink. Understanding these segments is crucial for tailoring marketing strategies, product offerings, and pricing to maximize customer satisfaction and loyalty.
Data Cleaning & Pre-Processing
●Dropped missing values & handled outliers
●Encoded categorical variables
●Scaled numerical variables
●Aggregated the data on customer level
Data Description & Visualization
●Tool : Power BI
●Connect data source IGB
●Interactive Dashboard
Model Building & Model Evaluation
●Customer Segmentation : K Mean clustering
●Propensity Model: Random Forest & Linear Regression
Interpretation of Results
●Customer Segments Need Mapping
●Propensity to Customer segment mapping
●Business Implication for HP Printer Team
Potential target customer: "Opportunity Seekers" are the most likely customer segment to purchase a laptop. While all customer segments show a low propensity to buy general printers, there is potential to upsell small or laser printers to other segments. The "Business Inksters" are the least likely segment to purchase a small printer but are open to purchasing a laser printer.
