CUSTOMER SEGMENTATION THROUGH FUZZY C-MEANS AND FUZZY RFM METHOD.
Jour nal of Theoretical and Applied Information Technology
August 2015. Vol. 78 No.3
.
© 2005 - 2015 JATIT & LLS. All rights reserved
ISSN: 1992-8645
www.jatit.org
E-ISSN: 1817-3195
JOURNAL OF THEORETICAL AND APPLIED
INFORMATION TECHNOLOGY
EDITORIAL COMMITTEE
NIAZ AHMAD
(Chief Editor)
Professor, FCE, MOE, H-9 Islamabad
PAKISTAN
SHAHBAZ GHAYYUR
(Co- Chief Editor)
Assistant Professor, DCS, FBAS, International Islamic University Islamabad,
PAKISTAN
SAEED ULLAH
(Associate Editor)
Assistant Professor, DCS, Federal Urdu University of Arts, Science & Technology Islamabad,
PAKSITAN
MADIHA AZEEM
(Associate Editor)
Journal of Theoretical and Applied Information Technology, Islamabad.
PAKISTAN
SALEHA SAMAR
(Managing Editor)
Journal of Theoretical and Applied Information Technology, Islamabad.
PAKISTAN
KAREEM ULLAH
(Managing Editor)
Journal of Theoretical and Applied Information Technology, Islamabad.
PAKISTAN
SHAHZAD A. KHAN
Lecturer IMCB, FDE Islamabad, PAKISTAN
(Managing Editor/Linguists & In-charge Publishing)
Journal of Theoretical and Applied Information Technology, Islamabad.
PAKISTAN
i
Jour nal of Theoretical and Applied Information Technology
August 2015. Vol. 78 No.3
© 2005 - 2015 JATIT & LLS. All rights reserved.
ISSN: 1992-8645
www.jatit.org
E-ISSN: 1817-3195
JOURNAL OF THEORETICAL AND APPLIED
INFORMATION TECHNOLOGY
REGIONAL ADVISORY PANEL
Dr. SIKANDAR HAYAT KHIYAL
Professor &Chairman DCS& DSE, Fatima Jinnah Women University, Rawalpindi, PAKISTAN
Dr. MUHAMMAD SHER
Professor &Chairman DCS, FBAS, International Islamic University Islamabad, PAKISTAN
Dr. ABDUL AZIZ
Professor of Computer Science, University of Central Punjab, PAKISTAN
Dr. M. UMER KHAN
Asst. Professor Department of Mechatronics, Air University Islamabad, PAKISTAN
Dr. KHALID HUSSAIN USMANI
Asst. Professor Department of Computer Science, Arid Agriculture University,
Rawalpindi, PAKISTAN
ii
Jour nal of Theoretical and Applied Information Technology
August 2015. Vol. 78 No.3
© 2005 - 2015 JATIT & LLS. All rights reserved.
ISSN: 1992-8645
www.jatit.org
E-ISSN: 1817-3195
JOURNAL OF THEORETICAL AND APPLIED
INFORMATION TECHNOLOGY
EDITORIAL ADVISORY BOARD
Dr. CHRISTEL BAIER
Technical University Dresden, GERMANY
Dr KHAIRUDDIN BIN OMAR
UniversitiKebangsaanMalysia, 43600 Bangi
Selangor Darul-Ehsan, MALYSIA
Dr. YUSUF PISAN
University of Technology, Sydney, AUSTRALIA
Dr. S. KARTHIKEYAN
Department of Electronics and Computer
Engineering, Caledonian College of Engineering,
OMAN (University College with Glascow
University, Scotland, UK)
DR. YUXIN MAO
School Of Computer & Information Engineering
Zhejiang Gongshang University, CHINA
Dr. ZARINA SHUKUR
FakultiTeknologidanSainsMaklumat, University
Kebangsaan MALYSIA
Dr. NOR AZAN MAT ZIN
Faculty of Information Science & Technology,
National University of MALYSIA
Dr. R.PONALAGUSAMY
National Institute of Technology, Tiruchirappalli,
Tamil Nadu, INDIA
Dr. PRABHAT K. MAHANTI
University of New Brunswick, Saint John, New
Brunswick, CANADA
Dr. NITIN UPADHYAY
Birla Institute of Technology and Science (BITS),
Pilani-Goa Campus, INDIA
Dr. S.S.RIAZ AHAMED
Mohamed Sathak Engineering College, Kilakarai,
&Sathak Institute of Technology,
Ramanathapuram , Tamilnadu, INDIA
Dr. A. SERMET ANAGÜN
Eskisehir Osmangazi University, Industrial
Engineering Department, Bademlik Campus,
26030 Eskisehir, TURKEY.
Dr. YACINE LAFIFI
Department of Computer Science, University of
Guelma, BP 401, Guelma 24000, ALGERIA.
Dr. CHRISTOS GRECOS
School Of Computing, Engineering And Physical
Sciences University Of Central Lancashire.
UNITED KINGDOM
Dr. JAYANTHI RANJAN
Institute of Management Technology
Raj Nagar, Ghaziabad, Uttar Pradesh, INDIA
Dr. ADEL M. ALIMI
National Engineering School of Sfax (ENIS),
University of SFAX, TUNISIA
Dr. RAKESH DUBE
Professor & Head, RKG Institute of Technology,
Ghaziabad, UP, INDIA
Dr. ADEL MERABET
Department of Electrical & Computer
Engineering, Dalhousie University, Halifax,
CANADA
Dr. HEMRAJ SAINI
CE&IT Department, Higher Institute of
Electronics, BaniWalid. LIBYA
Dr. MAUMITA BHATTACHARYA
SOBIT, Charles Sturt University
Albury - 2640, NSW, AUSTRALIA
Dr. MOHAMMAD TENGKU SEMBOK
Universiti Kebangsaan MALYSIA
iii
Jour nal of Theoretical and Applied Information Technology
August 2015. Vol. 78 No.3
© 2005 - 2015 JATIT & LLS. All rights reserved.
ISSN: 1992-8645
www.jatit.org
E-ISSN: 1817-3195
Dr. SEIFEDINE KADRY
Lebanese International University,
LEBONON
Dr. AIJUAN DONG
Department of Computer Science
Hood College Frederick, MD 21701. USA
Dr. ZURIATI AHMAD ZUKARNAIN
University Putra Malaysia,
MALAYSIA
Dr. HEMRAJ SAINI
Higher Institute of Electronic, BaniWalid
LIBYA
Dr. CHELLALI BENACHAIBA
University of Bechar, ALGERIA
Dr. MOHD NAZRI ISMAIL
University of Kuala Lumpur (UniKL) MALYSIA
Dr. VITUS SAI WA LAM
The University of Hong Kong, CHINA
Dr. WITCHA CHIMPHLEE
SuanDusitRajabhat University, Bangkok,
THAILAND
Dr. S. KARTHIKEYAN
Caledonian College of Engineering,
OMAN
Dr. SIDDHIVINAYAK KULKARNI
University of Ballarat, Ballarat,
AUSTRALIA
Dr. E. SREENIVASA REDDY
Principal - VasireddyVenkatadri Institute of
Technology, Guntur, A.P., INDIA
Dr. DRAGAN R. MILIVOJEVIĆ
Mining and Metallurgy Institute BorZelenibulevar
35, 19210 Bor, SERBIA
Dr OUSMANE THIARE
Gaston Berger University, Department of
Computer Science, UFR S.A.T, BP 234 SaintLouis SENEGAL
Dr. SANTOSH DHONDOPANT KHAMITKAR
RamanandTeerthMarathwada University, Nanded.
Maharashtra 431605, INDIA
Dr. M. IQBAL SARIPAN
(MIEEE, MInstP, Member IAENG, GradBEM)
Dept. of Computer and Communication Systems
Engineering, Faculty of Engineering, Universiti
Putra MALAYSIA
Dr. E. SREENIVASA REDDY
Principal - VasireddyVenkatadri Institute of
Technology, Guntur, A.P., INDIA
Dr. T.C.MANJUNATH,
Professor & Head of the Dept.,
Electronicis& Communication Engg. Dept,
New Horizon College of Engg.,
Bangalore-560087, Karnataka, INDIA.
Dr. SIDDHIVINAYAK KULKARNI
Graduate School of Information Technology and
Mathematics University of Ballart AUSTRALIA
Dr. SIKANDAR HAYAT KHIYAL
Professor & Chairman DCS& DSE, Fatima
Jinnah Women University, Rawalpindi,
PAKISTAN
Dr. MUHAMMAD SHER
Professor & Chairman DCS, FBAS,
International Islamic University Islamabad,
PAKISTAN
Dr. ABDUL AZIZ
Professor of Computer Science, University of
Central Punjab, PAKISTAN
Dr. M. UMER KHAN
Asst. Professor Department of Mechatronics, Air
University Islamabad, PAKISTAN
iv
Jour nal of Theoretical and Applied Information Technology
August 2015. Vol. 78 No.3
© 2005 - 2015 JATIT & LLS. All rights reserved.
ISSN: 1992-8645
www.jatit.org
E-ISSN: 1817-3195
Dr. RIKTESH SRIVASTAVA
Assistant Professor, Information Systems
Skyline University College
P O Box 1797, Sharjah, UAE
Dr. BONNY BANERJEE
PhD in Computer Science and Engineering,
The Ohio State University, Columbus, OH, USA
Senior Scientist
Audigence, FL, USA
PROFESSOR NICKOLAS S. SAPIDIS
DME, University of Western Macedonia
Kozani GR-50100, GREECE.
Dr. NAZRI BIN MOHD NAWI
Software Engineering Department, Faculty of
Science Computer Information Technology,
Universiti Tun Hussein Onn
MALAYSIA
Dr. JOHN BABALOLA OLADOSU
Ladoke Akintola University of Technology,
Ogbomoso, NIGERIA
Dr. ABDELLAH IDRISSI
Department of Computer Science, Faculty of
Science, Mohammed V University - Agdal,
Rabat, MOROCCO
Dr. AMIT CHAUDHRY
University Institute of Engineering and
Technology, Panjab University, Sector-25,
Chandigarh, INDIA
Dr. ASHRAF IMAM
Aligarh Muslim University, Aligarh-INDIA
Dr. MOHAMMED ALI HUSSAIN
Dept. of Computer Science & Engineering, Sri
Sai Madhavi Institute of Science & Technology,
Mallampudi,
Rajahmundry, A.P, INDIA
Dr. KHALID HUSSAIN USMANI
Asst. Professor Department of Computer Science,
Arid Agriculture University,
Rawalpindi, PAKISTAN
Dr. GUFRAN AHAMD ANSARI
Qassim University, College of Computer Science,
Ministry of Higher Education,
Qassim University, KINGDOM OF SAUDI
ARABIA
Dr. Defa Hu
School of Information, Hunan University of
Commerce
Changsha 410205, Hunan, P. R. of China
Elite Panel Members Have A Decision Weight Equivalent of Two Referees (Internal OR External).
The Expertise Of Editorial Board Members Are Also Called In For Settling Refereed Conflict About
Acceptance/Rejection And Their Opinion Is Considered As Final.
v
Jour nal of Theoretical and Applied Information Technology
August 2015. Vol. 78 No.3
© 2005 - 2015 JATIT & LLS. All rights reserved.
ISSN: 1992-8645
www.jatit.org
E-ISSN: 1817-3195
PREFACE
Journal of Theoretical and Applied Information Technology (JATIT) published since 2005 (E-ISSN 18173195 / ISSN 1992-8645) is an International refereed research publishing journal with a focused aim of
promoting and publishing original high quality research dealing with theoretical and scientific aspects in all
disciplines of Information Technology. JATIT is an international scientific research journal focusing on
issues in information technology research. A large number of manuscript inflows, reflects its popularity and
the trust of world's research community. JATIT is indexed with various organizations and is now published
on monthly basis.
All technical or research papers and research results submitted to JATIT should be original in nature, never
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be peer-reviewed by the panel of experts associated with JATIT. Submitted papers should meet the
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Journal of Theoretical and Applied Information Technology receives papers in continuous flow and we will
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Jour nal of Theoretical and Applied Information Technology
August 2015. Vol. 78 No.3
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ISSN: 1992-8645
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E-ISSN: 1817-3195
ABSTRACTING & INDEXING
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Journal of Theoretical and Applied Information Technology
31st August 2015. Vol.78. No.3
© 2005 - 2015 JATIT & LLS. All rights reserved.
ISSN: 1992-8645
www.jatit.org
E-ISSN: 1817-3195
CUSTOMER SEGMENTATION THROUGH
FUZZY C-MEANS AND FUZZY RFM METHOD
NI PUTU PUTRI YULIARI1,I KETUT GEDE DARMA PUTRA2, NI KADEK DWI RUSJAYANTI3
Department Of Information Technology, Engineering Faculty in Udayana University
Bukit Jimbaran, Bali, Indonesia, Telp. +62361703315
E-mail: putriyuliari@gmail.com1,Ikgdarmaputra@gmail.com2,dwi.rusjayanti@gmail.com3
ABSTRACT
This research aims for finding the potential customer use data transaction. This causes, the company is
difficult to arrange customers who have high and low loyalty and this research have a application for
customer segmentation to help analyzing transaction data with Fuzzy C-Means for clustering and Fuzzy
RFM for identify the customers. Softwares used to conduct this experiment are Microsoft SQL Server to
saving the database and Matlab as the tools. The results of this segmentation for four experiments are two
classes. Its has superstar I and Occasional H for each number cluster and then for the best number of cluster
for this experiments are two clusters according MPC method.
Keywords: Customer segmentation, Clustering, Fuzzy c-means, Fuzzy RFM, MPC (Modified Partition
Coefficient)
1.
INTRODUCTION
The company is difficult to arrange
customers who have high and low loyalty. This is
caused of data transaction growth fast and limited
ability to segmenting with manual computation.
Amount of data from furniture company has
important information to segmenting, the process
of finding in a set of data called data mining[1].
Data mining is used to give services to customers
based on views or insights of customers with CRM
strategy. Every relation with customers can make a
benefit to the company. Profitable relationship is
done by analyzing data transaction of customers.
Because of that marketing is important to dividing
customers[2]. Volume data is continues to grow and
can not be analysis with manual[1]. The application
of data mining can help in analyzing customers to
determine level of loyalty customer.
Effective
segmentation
leads
to
competitive
advantage,
recognition
and
exploitation of new market opportunities, selection
of the appropriate target market, enhanced
differentation and positioning, and increased
profitability. Despite the appealing strategic and
tactical benefit of market segmentation, cluster
analysis remain the most favoured method.[6] The
basic of idea of cluster analisys is to divide a
heterogeneous customers market into homogeneous
sub-grups[9]. But, some information is inevitably
lost when object are grouped. Information loss is
not problematic but it can result in the wrong
conclusions[8]. Hence, there is no succesful
segmentation without an appropriate clustering
algorithm[7].
Therefore, this research have a application
for customer segmentation to help analyzing
transaction data in a furniture company, the
application is developing method of Fuzzy CMeans and Fuzzy RFM. Software used to conduct
this experiment is Microsoft SQL Server for saving
database and Matlab as the tools. This application
used fuzzy clustering algorithm with Fuzzy CMeans method, the algorithm have been selected
because this method can make data grouped by the
cluster. Fuzzy RFM (Recency, frequency,
monetary) method used to choose customer with
high or low loyalty from the result data of Fuzzy CMeans method. Fuzzy RFM can determine
customer to the class with level loyalty their have.
2.
CUSTOMER SEGMENTATION
Segmentation is process for divided
customers to the some cluster with category of the
loyalty customer for build the market strategy. The
Characteristic of segmentation are made by
bussiness rule. The clustering algorithm can be
analize characteristic of data, cluster identification
and result of monitoring data model. The model of
operator data mining are build for searching the
380
Journal of Theoretical and Applied Information Technology
31st August 2015. Vol.78. No.3
© 2005 - 2015 JATIT & LLS. All rights reserved.
ISSN: 1992-8645
www.jatit.org
good cluster and characteristic distinctly.
Figure 1 explaining about system process for
customer segmentation, the input of this system is
database from the company. Database from the
company was choosed use data preparation process,
data will divided to third group with Fuzzy RFM
parameter. Data with paramater will be clustering
with Fuzzy C-Means method and then apply MPC
method for validity cluster. Output from this
application is class category of the customer.
Everyday Shopper
a.
b.
c.
Have raising transaction
Low transaction
Have value with middle until
low scale
Dormant Customer
a.
b.
Lowest frequency and value
Lowest recency
Attribute distribution base on RFM will
show in Table 2.
Table 2: Domain Value RFM
Atribute
Recency
Figure 1: System Process
3.
CLUSTERING
The RFM method used for determine
variable of measuring purchase products by
customers. Variable can determine as recency,
frequency and monetary[3].
a. Recency is range time (day, month, year) from
end transaction until this time by customers
purchase.
b. Frequency is transaction total or transaction
average in once period.
c. Monetary is average cost total of customers in
once period.
Segmentation cluster in the retail company divided
by six characteristic with RFM values of
customers[2].
E-ISSN: 1817-3195
Linguistic
variable
Long Time Ago
Rather Longer
Recently
Frequency
Seldom
Rather Frequent
Often
Very Often
Monetary
Very Low
Low
Rather Low
Rather High
High
Very High
Domain Value
0 ≤ r < Max_r1 day
Max_r1 day< r < Max_r2
day
Max_r2 day < r
0 ≤ f < Max_f1 transaction
Max_f1 transaction < f <
Max_f2 transaction
Max_f2 transaction
August 2015. Vol. 78 No.3
.
© 2005 - 2015 JATIT & LLS. All rights reserved
ISSN: 1992-8645
www.jatit.org
E-ISSN: 1817-3195
JOURNAL OF THEORETICAL AND APPLIED
INFORMATION TECHNOLOGY
EDITORIAL COMMITTEE
NIAZ AHMAD
(Chief Editor)
Professor, FCE, MOE, H-9 Islamabad
PAKISTAN
SHAHBAZ GHAYYUR
(Co- Chief Editor)
Assistant Professor, DCS, FBAS, International Islamic University Islamabad,
PAKISTAN
SAEED ULLAH
(Associate Editor)
Assistant Professor, DCS, Federal Urdu University of Arts, Science & Technology Islamabad,
PAKSITAN
MADIHA AZEEM
(Associate Editor)
Journal of Theoretical and Applied Information Technology, Islamabad.
PAKISTAN
SALEHA SAMAR
(Managing Editor)
Journal of Theoretical and Applied Information Technology, Islamabad.
PAKISTAN
KAREEM ULLAH
(Managing Editor)
Journal of Theoretical and Applied Information Technology, Islamabad.
PAKISTAN
SHAHZAD A. KHAN
Lecturer IMCB, FDE Islamabad, PAKISTAN
(Managing Editor/Linguists & In-charge Publishing)
Journal of Theoretical and Applied Information Technology, Islamabad.
PAKISTAN
i
Jour nal of Theoretical and Applied Information Technology
August 2015. Vol. 78 No.3
© 2005 - 2015 JATIT & LLS. All rights reserved.
ISSN: 1992-8645
www.jatit.org
E-ISSN: 1817-3195
JOURNAL OF THEORETICAL AND APPLIED
INFORMATION TECHNOLOGY
REGIONAL ADVISORY PANEL
Dr. SIKANDAR HAYAT KHIYAL
Professor &Chairman DCS& DSE, Fatima Jinnah Women University, Rawalpindi, PAKISTAN
Dr. MUHAMMAD SHER
Professor &Chairman DCS, FBAS, International Islamic University Islamabad, PAKISTAN
Dr. ABDUL AZIZ
Professor of Computer Science, University of Central Punjab, PAKISTAN
Dr. M. UMER KHAN
Asst. Professor Department of Mechatronics, Air University Islamabad, PAKISTAN
Dr. KHALID HUSSAIN USMANI
Asst. Professor Department of Computer Science, Arid Agriculture University,
Rawalpindi, PAKISTAN
ii
Jour nal of Theoretical and Applied Information Technology
August 2015. Vol. 78 No.3
© 2005 - 2015 JATIT & LLS. All rights reserved.
ISSN: 1992-8645
www.jatit.org
E-ISSN: 1817-3195
JOURNAL OF THEORETICAL AND APPLIED
INFORMATION TECHNOLOGY
EDITORIAL ADVISORY BOARD
Dr. CHRISTEL BAIER
Technical University Dresden, GERMANY
Dr KHAIRUDDIN BIN OMAR
UniversitiKebangsaanMalysia, 43600 Bangi
Selangor Darul-Ehsan, MALYSIA
Dr. YUSUF PISAN
University of Technology, Sydney, AUSTRALIA
Dr. S. KARTHIKEYAN
Department of Electronics and Computer
Engineering, Caledonian College of Engineering,
OMAN (University College with Glascow
University, Scotland, UK)
DR. YUXIN MAO
School Of Computer & Information Engineering
Zhejiang Gongshang University, CHINA
Dr. ZARINA SHUKUR
FakultiTeknologidanSainsMaklumat, University
Kebangsaan MALYSIA
Dr. NOR AZAN MAT ZIN
Faculty of Information Science & Technology,
National University of MALYSIA
Dr. R.PONALAGUSAMY
National Institute of Technology, Tiruchirappalli,
Tamil Nadu, INDIA
Dr. PRABHAT K. MAHANTI
University of New Brunswick, Saint John, New
Brunswick, CANADA
Dr. NITIN UPADHYAY
Birla Institute of Technology and Science (BITS),
Pilani-Goa Campus, INDIA
Dr. S.S.RIAZ AHAMED
Mohamed Sathak Engineering College, Kilakarai,
&Sathak Institute of Technology,
Ramanathapuram , Tamilnadu, INDIA
Dr. A. SERMET ANAGÜN
Eskisehir Osmangazi University, Industrial
Engineering Department, Bademlik Campus,
26030 Eskisehir, TURKEY.
Dr. YACINE LAFIFI
Department of Computer Science, University of
Guelma, BP 401, Guelma 24000, ALGERIA.
Dr. CHRISTOS GRECOS
School Of Computing, Engineering And Physical
Sciences University Of Central Lancashire.
UNITED KINGDOM
Dr. JAYANTHI RANJAN
Institute of Management Technology
Raj Nagar, Ghaziabad, Uttar Pradesh, INDIA
Dr. ADEL M. ALIMI
National Engineering School of Sfax (ENIS),
University of SFAX, TUNISIA
Dr. RAKESH DUBE
Professor & Head, RKG Institute of Technology,
Ghaziabad, UP, INDIA
Dr. ADEL MERABET
Department of Electrical & Computer
Engineering, Dalhousie University, Halifax,
CANADA
Dr. HEMRAJ SAINI
CE&IT Department, Higher Institute of
Electronics, BaniWalid. LIBYA
Dr. MAUMITA BHATTACHARYA
SOBIT, Charles Sturt University
Albury - 2640, NSW, AUSTRALIA
Dr. MOHAMMAD TENGKU SEMBOK
Universiti Kebangsaan MALYSIA
iii
Jour nal of Theoretical and Applied Information Technology
August 2015. Vol. 78 No.3
© 2005 - 2015 JATIT & LLS. All rights reserved.
ISSN: 1992-8645
www.jatit.org
E-ISSN: 1817-3195
Dr. SEIFEDINE KADRY
Lebanese International University,
LEBONON
Dr. AIJUAN DONG
Department of Computer Science
Hood College Frederick, MD 21701. USA
Dr. ZURIATI AHMAD ZUKARNAIN
University Putra Malaysia,
MALAYSIA
Dr. HEMRAJ SAINI
Higher Institute of Electronic, BaniWalid
LIBYA
Dr. CHELLALI BENACHAIBA
University of Bechar, ALGERIA
Dr. MOHD NAZRI ISMAIL
University of Kuala Lumpur (UniKL) MALYSIA
Dr. VITUS SAI WA LAM
The University of Hong Kong, CHINA
Dr. WITCHA CHIMPHLEE
SuanDusitRajabhat University, Bangkok,
THAILAND
Dr. S. KARTHIKEYAN
Caledonian College of Engineering,
OMAN
Dr. SIDDHIVINAYAK KULKARNI
University of Ballarat, Ballarat,
AUSTRALIA
Dr. E. SREENIVASA REDDY
Principal - VasireddyVenkatadri Institute of
Technology, Guntur, A.P., INDIA
Dr. DRAGAN R. MILIVOJEVIĆ
Mining and Metallurgy Institute BorZelenibulevar
35, 19210 Bor, SERBIA
Dr OUSMANE THIARE
Gaston Berger University, Department of
Computer Science, UFR S.A.T, BP 234 SaintLouis SENEGAL
Dr. SANTOSH DHONDOPANT KHAMITKAR
RamanandTeerthMarathwada University, Nanded.
Maharashtra 431605, INDIA
Dr. M. IQBAL SARIPAN
(MIEEE, MInstP, Member IAENG, GradBEM)
Dept. of Computer and Communication Systems
Engineering, Faculty of Engineering, Universiti
Putra MALAYSIA
Dr. E. SREENIVASA REDDY
Principal - VasireddyVenkatadri Institute of
Technology, Guntur, A.P., INDIA
Dr. T.C.MANJUNATH,
Professor & Head of the Dept.,
Electronicis& Communication Engg. Dept,
New Horizon College of Engg.,
Bangalore-560087, Karnataka, INDIA.
Dr. SIDDHIVINAYAK KULKARNI
Graduate School of Information Technology and
Mathematics University of Ballart AUSTRALIA
Dr. SIKANDAR HAYAT KHIYAL
Professor & Chairman DCS& DSE, Fatima
Jinnah Women University, Rawalpindi,
PAKISTAN
Dr. MUHAMMAD SHER
Professor & Chairman DCS, FBAS,
International Islamic University Islamabad,
PAKISTAN
Dr. ABDUL AZIZ
Professor of Computer Science, University of
Central Punjab, PAKISTAN
Dr. M. UMER KHAN
Asst. Professor Department of Mechatronics, Air
University Islamabad, PAKISTAN
iv
Jour nal of Theoretical and Applied Information Technology
August 2015. Vol. 78 No.3
© 2005 - 2015 JATIT & LLS. All rights reserved.
ISSN: 1992-8645
www.jatit.org
E-ISSN: 1817-3195
Dr. RIKTESH SRIVASTAVA
Assistant Professor, Information Systems
Skyline University College
P O Box 1797, Sharjah, UAE
Dr. BONNY BANERJEE
PhD in Computer Science and Engineering,
The Ohio State University, Columbus, OH, USA
Senior Scientist
Audigence, FL, USA
PROFESSOR NICKOLAS S. SAPIDIS
DME, University of Western Macedonia
Kozani GR-50100, GREECE.
Dr. NAZRI BIN MOHD NAWI
Software Engineering Department, Faculty of
Science Computer Information Technology,
Universiti Tun Hussein Onn
MALAYSIA
Dr. JOHN BABALOLA OLADOSU
Ladoke Akintola University of Technology,
Ogbomoso, NIGERIA
Dr. ABDELLAH IDRISSI
Department of Computer Science, Faculty of
Science, Mohammed V University - Agdal,
Rabat, MOROCCO
Dr. AMIT CHAUDHRY
University Institute of Engineering and
Technology, Panjab University, Sector-25,
Chandigarh, INDIA
Dr. ASHRAF IMAM
Aligarh Muslim University, Aligarh-INDIA
Dr. MOHAMMED ALI HUSSAIN
Dept. of Computer Science & Engineering, Sri
Sai Madhavi Institute of Science & Technology,
Mallampudi,
Rajahmundry, A.P, INDIA
Dr. KHALID HUSSAIN USMANI
Asst. Professor Department of Computer Science,
Arid Agriculture University,
Rawalpindi, PAKISTAN
Dr. GUFRAN AHAMD ANSARI
Qassim University, College of Computer Science,
Ministry of Higher Education,
Qassim University, KINGDOM OF SAUDI
ARABIA
Dr. Defa Hu
School of Information, Hunan University of
Commerce
Changsha 410205, Hunan, P. R. of China
Elite Panel Members Have A Decision Weight Equivalent of Two Referees (Internal OR External).
The Expertise Of Editorial Board Members Are Also Called In For Settling Refereed Conflict About
Acceptance/Rejection And Their Opinion Is Considered As Final.
v
Jour nal of Theoretical and Applied Information Technology
August 2015. Vol. 78 No.3
© 2005 - 2015 JATIT & LLS. All rights reserved.
ISSN: 1992-8645
www.jatit.org
E-ISSN: 1817-3195
PREFACE
Journal of Theoretical and Applied Information Technology (JATIT) published since 2005 (E-ISSN 18173195 / ISSN 1992-8645) is an International refereed research publishing journal with a focused aim of
promoting and publishing original high quality research dealing with theoretical and scientific aspects in all
disciplines of Information Technology. JATIT is an international scientific research journal focusing on
issues in information technology research. A large number of manuscript inflows, reflects its popularity and
the trust of world's research community. JATIT is indexed with various organizations and is now published
on monthly basis.
All technical or research papers and research results submitted to JATIT should be original in nature, never
previously published in any journal or undergoing such process across the globe. All the submissions will
be peer-reviewed by the panel of experts associated with JATIT. Submitted papers should meet the
internationally accepted criteria and manuscripts should follow the style of the journal for the purpose of
both reviewing and editing. All of its articles also appear online as per policy of JATIT
Journal of Theoretical and Applied Information Technology receives papers in continuous flow and we will
consider articles from a wide range of Information Technology disciplines encompassing the most basic
research to the most innovative technologies. Please submit your papers electronically to our submission
system at http://jatit.org/submit_paper.php in an MSWord, Pdf or compatible format so that they may be
evaluated for publication in the upcoming issue. This journal uses a blinded review process; please
remember to include all your personal identifiable information in the manuscript before submitting it for
review, we will edit the necessary information at our side. Submissions to JATIT should be full research /
review papers (properly indicated below main title).
It is the sole responsibility of the submitting authors to make sure that the submitted manuscript is not in
process of publication anywhere in any conference/journal across the globe, nor part or whole of it is
copied from any source.
The review process may take anywhere from five days to two months depending on the response time to
referees. Authors will be informed about the updated status via e-mail as soon as we receive the evaluation
results. After submission of publication dues for accepted manuscripts a publication slot will be allocated to
your manuscript for its publication in upcoming monthly issues of JATIT.
******************
vi
Jour nal of Theoretical and Applied Information Technology
August 2015. Vol. 78 No.3
© 2005 - 2015 JATIT & LLS. All rights reserved.
ISSN: 1992-8645
www.jatit.org
E-ISSN: 1817-3195
ABSTRACTING & INDEXING
Journal of Theoretical and Applied Information Technology Islamabad Pakistan is focused, double blind
peer reviewed journal that is now being published monthly and is published by Asian Research Publishing
Network and is Indexed / Abstracted by the following International Agencies and institutions. JATIT has
been regularly published since 2005 and now has a well reputed international standing and invites
contributions from researchers, scientists, and practitioners from all over the world.
*- Ulrich's Periodicals Directory
*- DataBase systems and Logic Programming (DBLP)
*- EBSCO Publishing USA
*- Directory of Open Access Journals (DOAJ)
*- Google & Google Scholar Journals
*- The Index of Information Systems Journals
*- Information Technology Resources Collection
*- ZDNet Australia
*- NLM Catalog
*- Computing Research and Education Association of Australasia
*- CiteSeerx
*- Elsevier
*- SCOPUS
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*- TOC Premier TM
*- Computer Science Journals
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*-OpenJgate
*- INSPEC
*- IAOR Palgrave Macmillan
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Feel free to suggest JATIT to any Indexing & Abstracting Services which are appropriate to its scope
vii
Journal of Theoretical and Applied Information Technology
31st August 2015. Vol.78. No.3
© 2005 - 2015 JATIT & LLS. All rights reserved.
ISSN: 1992-8645
www.jatit.org
E-ISSN: 1817-3195
CUSTOMER SEGMENTATION THROUGH
FUZZY C-MEANS AND FUZZY RFM METHOD
NI PUTU PUTRI YULIARI1,I KETUT GEDE DARMA PUTRA2, NI KADEK DWI RUSJAYANTI3
Department Of Information Technology, Engineering Faculty in Udayana University
Bukit Jimbaran, Bali, Indonesia, Telp. +62361703315
E-mail: putriyuliari@gmail.com1,Ikgdarmaputra@gmail.com2,dwi.rusjayanti@gmail.com3
ABSTRACT
This research aims for finding the potential customer use data transaction. This causes, the company is
difficult to arrange customers who have high and low loyalty and this research have a application for
customer segmentation to help analyzing transaction data with Fuzzy C-Means for clustering and Fuzzy
RFM for identify the customers. Softwares used to conduct this experiment are Microsoft SQL Server to
saving the database and Matlab as the tools. The results of this segmentation for four experiments are two
classes. Its has superstar I and Occasional H for each number cluster and then for the best number of cluster
for this experiments are two clusters according MPC method.
Keywords: Customer segmentation, Clustering, Fuzzy c-means, Fuzzy RFM, MPC (Modified Partition
Coefficient)
1.
INTRODUCTION
The company is difficult to arrange
customers who have high and low loyalty. This is
caused of data transaction growth fast and limited
ability to segmenting with manual computation.
Amount of data from furniture company has
important information to segmenting, the process
of finding in a set of data called data mining[1].
Data mining is used to give services to customers
based on views or insights of customers with CRM
strategy. Every relation with customers can make a
benefit to the company. Profitable relationship is
done by analyzing data transaction of customers.
Because of that marketing is important to dividing
customers[2]. Volume data is continues to grow and
can not be analysis with manual[1]. The application
of data mining can help in analyzing customers to
determine level of loyalty customer.
Effective
segmentation
leads
to
competitive
advantage,
recognition
and
exploitation of new market opportunities, selection
of the appropriate target market, enhanced
differentation and positioning, and increased
profitability. Despite the appealing strategic and
tactical benefit of market segmentation, cluster
analysis remain the most favoured method.[6] The
basic of idea of cluster analisys is to divide a
heterogeneous customers market into homogeneous
sub-grups[9]. But, some information is inevitably
lost when object are grouped. Information loss is
not problematic but it can result in the wrong
conclusions[8]. Hence, there is no succesful
segmentation without an appropriate clustering
algorithm[7].
Therefore, this research have a application
for customer segmentation to help analyzing
transaction data in a furniture company, the
application is developing method of Fuzzy CMeans and Fuzzy RFM. Software used to conduct
this experiment is Microsoft SQL Server for saving
database and Matlab as the tools. This application
used fuzzy clustering algorithm with Fuzzy CMeans method, the algorithm have been selected
because this method can make data grouped by the
cluster. Fuzzy RFM (Recency, frequency,
monetary) method used to choose customer with
high or low loyalty from the result data of Fuzzy CMeans method. Fuzzy RFM can determine
customer to the class with level loyalty their have.
2.
CUSTOMER SEGMENTATION
Segmentation is process for divided
customers to the some cluster with category of the
loyalty customer for build the market strategy. The
Characteristic of segmentation are made by
bussiness rule. The clustering algorithm can be
analize characteristic of data, cluster identification
and result of monitoring data model. The model of
operator data mining are build for searching the
380
Journal of Theoretical and Applied Information Technology
31st August 2015. Vol.78. No.3
© 2005 - 2015 JATIT & LLS. All rights reserved.
ISSN: 1992-8645
www.jatit.org
good cluster and characteristic distinctly.
Figure 1 explaining about system process for
customer segmentation, the input of this system is
database from the company. Database from the
company was choosed use data preparation process,
data will divided to third group with Fuzzy RFM
parameter. Data with paramater will be clustering
with Fuzzy C-Means method and then apply MPC
method for validity cluster. Output from this
application is class category of the customer.
Everyday Shopper
a.
b.
c.
Have raising transaction
Low transaction
Have value with middle until
low scale
Dormant Customer
a.
b.
Lowest frequency and value
Lowest recency
Attribute distribution base on RFM will
show in Table 2.
Table 2: Domain Value RFM
Atribute
Recency
Figure 1: System Process
3.
CLUSTERING
The RFM method used for determine
variable of measuring purchase products by
customers. Variable can determine as recency,
frequency and monetary[3].
a. Recency is range time (day, month, year) from
end transaction until this time by customers
purchase.
b. Frequency is transaction total or transaction
average in once period.
c. Monetary is average cost total of customers in
once period.
Segmentation cluster in the retail company divided
by six characteristic with RFM values of
customers[2].
E-ISSN: 1817-3195
Linguistic
variable
Long Time Ago
Rather Longer
Recently
Frequency
Seldom
Rather Frequent
Often
Very Often
Monetary
Very Low
Low
Rather Low
Rather High
High
Very High
Domain Value
0 ≤ r < Max_r1 day
Max_r1 day< r < Max_r2
day
Max_r2 day < r
0 ≤ f < Max_f1 transaction
Max_f1 transaction < f <
Max_f2 transaction
Max_f2 transaction