Analysis and Segmentation with AI: Market Basket Analysis and Customer Behaviour Analysis

analysis and segmentation with ai

Artificial Intelligence (AI) has transformed how organisations assess and segment their clients. With the power of AI, organisations can now analyse customer behaviour and preferences, shopping history, and many more. AI technologies can help business analysts harness all this knowledge to make data-driven decisions.

Enrolling in an AI ML training and AI learning course is a great way to enhance your skills in artificial intelligence. This blog will explore two essential techniques of AI in business analysis: Market Basket Analysis and Customer Behavior Analysis.

Market Basket Analysis

Market basket analysis (MBA) is a data mining approach retailers use to find purchase patterns in any retail context. It involves evaluating huge data sets, such as purchase history, to uncover product groups and products likely to be purchased together. MBA is a series of statistical affinity calculations that assist business owners in better understanding – and ultimately serving – their customers by identifying purchase trends. In basic terms, MBA looks for what combinations of products most commonly occur together in transactions.

Leveraging AI for market basket analysis

Market basket analysis is a data mining technique that identifies co-occurrence patterns and analyses the strength of the link between purchased products. Machine learning experts utilise this unsupervised learning technique to generate data-driven strategies for merchants, enhancing sales. It requires minimum feature engineering and minimal data cleaning.

By applying AI Association Rule Mining, merchants can boost market basket analysis and cross-selling techniques, increasing assortment efficiency. This analysis can identify which things buyers purchase together, assist companies in locating products together, and propose items customers commonly add to their shopping carts. This strategy also allows firms to deliver customised suggestions to clients.

Customer Behavior Analysis

Customer behaviour analysis is a technique of acquiring and analysing data about how customers engage with a firm. It provides insight into customer behaviour, including social trends, frequency patterns, and background variables influencing their decision to buy anything. The study helps organisations identify their target demographic and generate more compelling products and service offers.

A customer behaviour analysis entails segmenting customers into buyer personas based on their similar interests and analysing each group at their appropriate stage in the customer journey to see how the different personas interact with the organisation. This research delivers insight into the elements that impact audiences and the motives, priorities, and decision-making procedures clients consider during their trips. The results of a customer behaviour study help organisations gain insight into how customers engage with a business and enable them to modify its products or services or marketing to create greater sales.

Leveraging AI for customer behavior analysis

Here are some ways businesses are leveraging AI for customer behaviour analysis:

  • Analysing enormous quantities of client data such as buying behaviour, preferences, and spending habits.
  • Forecasting up-sells, cross-sells, website abandonment, and providing data to improve customer experience.
  • Investigating how customers engage with their companies and delivering insights at every step in the customer experience.
  • Using AI-powered sentiment analysis to understand consumer feedback and enhance customer happiness.
  • Targeted marketing to develop consumer relationships that survive the test of time.
  • Pinpointing customer preferences and giving customised recommendations.
  • Identifying disgruntled clients and addressing their complaints in real time.
  • Analysing customers' in-store behaviours utilising volumetric tracking and AI spatial analysis.

Segmentation in Market Basket Analysis and Customer Behavior Analysis

Segmentation is a marketing approach that involves breaking a bigger market into smaller groups of consumers with comparable demands or characteristics. This helps firms focus their marketing efforts on certain groups, leading to greater sales and consumer satisfaction. Market segmentation can be done in numerous methods, including demographic, geographic, psychographic, and firmographic segmentation.

MBA and CBA are graduate-level business degrees covering various business disciplines, including marketing. Therefore, it is likely that both MBA and CBA schools teach the issue of segmentation in their marketing curricula. However, the specific strategy for teaching segmentation may differ based on the program and the instructor.
Implementing Market Basket Analysis and Customer Behavior Analysis in Your Business

To implement MBA and CBA in your business, one can follow these steps:

1. Establish clear objectives and goals:

Define the specific objectives and goals of the proposal.
Determine success criteria to measure project effectiveness.
Create a structured framework for assessing costs and benefits aligned with project objectives.

2. Form a competent team and acquire resources:

Assemble a team of skilled professionals with relevant expertise.
Ensure access to crucial resources, such as financial data and market research.
Assign clear roles and responsibilities within the team to streamline project execution.

3. Conduct a thorough Cost-Benefit Analysis (CBA):

Undertake a rigorous cost-benefit analysis (CBA) to evaluate project viability.

Include the following factors in your CBA:

Cost Assessment: Identify all pertinent project expenses, encompassing initial investments, ongoing operational costs, and maintenance expenditures.

Benefit Analysis: Evaluate expected benefits, encompassing tangible gains (e.g., increased revenue, cost reductions) and intangible advantages (e.g., enhanced reputation, employee morale).
Timeframe Definition: Establish a timeframe for evaluating costs and benefits, accounting for long-term implications.

Discount Rate Application: Apply an appropriate discount rate to consider the time value of money in your analysis.

Risk Evaluation: Assess potential project risks and uncertainties impacting costs and benefits.
Sensitivity Analysis: Examine how variations in key parameters (e.g., market growth rate, inflation rate) affect project outcomes.

4. Informed decision-making and ongoing review:

Utilise CBA results to make informed decisions regarding project feasibility.
Regularly review project progress against established objectives and goals.
Adapt the project plan to maintain alignment with objectives and achieve successful outcomes.

This structured framework enables systematic project evaluation and planning, ensuring comprehensive consideration of all relevant factors. It facilitates data-driven decision-making and provides a roadmap for managing costs and benefits throughout the project lifecycle.


AI is transforming the way firms approach customer segmentation and behaviour analysis. It gives powerful tools to identify and target the correct clients, which is considerably more challenging to achieve manually or with standard analytical methods. AI-powered consumer segmentation is a fundamental notion in marketing that allows organisations to reach their target demographic effectively. AI may reduce marketing expenditures by 30%, optimise marketing spend, and boost efficiency in marketing activities, saving firms time and money. AI also offers scale and efficiency to client segmentation, automating the process and allowing adaptive targeting.

Imarticus Learning offers an Executive Programme in AI for Business in collaboration with IIM Lucknow. The AI ML training programme is designed for professionals in Artificial Intelligence who desire to become AI and Machine Learning leaders. The AI for executives course delivers competence in vital disciplines connected to Machine Learning and Artificial Intelligence through practical learning.

The AI learning course is a 6-month live online and campus immersion course that seeks to empower graduates with at least five years of work experience in the relevant sector with the necessary knowledge and skill sets in AI and Machine Learning.

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