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# Problem: To increase the MER of DRTV from the current level on the given dataset.

Brief Outline:
The analysis presented is based on the assumption that the data set is exhaustive. All inferences are only
based on the 532 data points given. This case study identifies a scenario which gives a higher MER (greater
than 2) based on the findings from given datasets.
Theory Used:
We find the correlation between the 11 variables which are assumed to affect the MER, using simple graphical
inference methods and K-means clustering.
Brief Understanding of Data:
The data set given has 532 entries with 11 variables. Since the length of the dataset is not large, if we classify
it with respect to each and every variable the distinctiveness factor would be high, making pattern finding
difficult. Therefore, we have cut down on the number of variables. Some of the variables (for e.g. time, order)
have been omitted (after concluding that they, perhaps, dont play a big role in determining MER based on the
correlations) for the same reason.
The average value for the MER for the given dataset is 0.83 which we aim to increase.
Method:
On glancing at the data set, we realize that MER is the ratio of sales versus spends. The MER for the given
data set ranges from 0-6.46. Subsequently, the MERs were chunked into five groups (0-0.5, 0.5-1.0, 1.0-1.5,
1.5-2.0 and greater than 2.0) to make analysis easier.
For the first part of the analysis, histograms of MER against day, month, time-slots and Content of Infomercials
(CREATIVE) were plotted. Some of these have been shown below -

## MER Histogram for the samples on Monday

On X-axis, we have the chunks (0.5 denotes the range of MER from 0-0.5 and 1 denotes the range of MER from
0.5-1.0 and so on) of MER and on Y-axis, frequency of these MER on Monday. Similarly the other plots are
plotted for rest of days.

## MER Histogram for the samples in October

On X-axis, we have the chunks (0.5 denotes the range of MER from 0-0.5 and 1 denotes the range of MER from
0.5-1.0 and so on) of MER and on Y-axis, frequency of these MER on October. Similarly the other plots are
plotted for rest of months.

## MER Histogram for the samples in Time-slot 1 (Early Morning)

On X-axis, we have the chunks (0.5 denotes the range of MER from 0-0.5 and 1 denotes the range of MER from
0.5-1.0 and so on) of MER and on Y-axis, frequency of these MER on Time slot. Similarly the other plots are
plotted for other 7 Time slots.

## MER Histogram for the samples of type CREATIVE.A

On X-axis, we have the chunks (0.5 denotes the range of MER from 0-0.5 and 1 denotes the range of MER from
0.5-1.0 and so on) of MER and on Y-axis, frequency of these MER on CREATIVE.A. Similarly the other plots are
plotted for rest types of infomercials.
Recommendations Based on the Graphical Analysis:
1) Days: Infomercials airing on Thursdays and Fridays are not profitable. Infomercials on Sundays give a good
return with 10% of all samples having an MER which is more than 2. Wednesdays and Saturdays fare
moderately with approximately 15% of all samples with an MER of greater than 1.5.
2) Month: The variation in MERs among the three months is not strong with October faring only slightly poorly
than November and December.
3) Time-Slot: Time slots 4, 7 and 8 can be ruled out straight away since there are no samples in these time
slots with an MER greater than 2.
After removing all data points for Thursdays, Fridays and the three time slots 4, 7 and 8 we get an average
MER of 0.87 which is a moderate improvement over the original value of 0.83.
Now, we implemented the k-means clustering algorithm to identify the cluster of points with MER greater
than 2.
To implement it, we need to find the number of clusters in the data using the value of Within Cluster Sum of
Squares. We find the value of k = 4 to be optimum (Graph attached).
We found the following clusters after the analysis:
Day
3.5124
3.4889
3.9138
2.9886

Time Slot
4.0187
3.6933
2.1034
3.000

Area
31.1062
28.4578
7.2069
28.2977

Channel
12.5188
41.9822
76.8276
72.8864

MER VALUE
0.8141
0.9031
0.8710
0.6978

The second cluster fares the best for our purpose with an average MER value of 0.90. On visualizing the data, a
high variance was found in that particular cluster. Therefore, k-means clustering was repeated for this
particular cluster with k=5. With this we can increase the average MER value to 1.25 which is a marked
improvement over the original value and also over our crude graphical method.
Day
3.9
3.5227
3.556
2.7436
3.9394

Time Slot
3.4
4.1477
3.2889
2.7949
2.2727

Area
35.1
35.9091
19.533
14.9231
32.7273

Channel
53.2500
36.6705
49.2334
35.4615
47.12

MER VALUE
1.2515
0.8496
0.8529
0.9262
0.8867

Although, in the above clustering methods we have assumed that the elements though being discreet can be
taken as continuous.
Reason to choose to particular method:
Our objective was to increase the MER for which we see how MER co-varies with other variables. For that I
plotted histograms of MER v/s day, MER v/s month, MER v/s Time Slots and MER v/s Content of the
infomercials (CREATIVE). These helped us to infer the factors that are inversely proportional to MER.
Recommendation Based on K-means Clustering:
Based on the above cluster, the tentative strategy to increase MER would be by planning infomercials only in
the times given in the data set of the cluster with MER=1.25.