Reutterer, Thomas and Hornik, Kurt ORCID: https://orcid.org/0000-0003-4198-9911 and March, Nicolas and Gruber, Kathrin
(2016)
A data mining framework for targeted category promotions.
Journal of Business Economics, 87 (3).
pp. 337-358.
ISSN 0044-2372
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Abstract
This research presents a new approach to derive recommendations for segment-specific, targeted marketing campaigns on the product category level. The proposed methodological framework serves as a decision support tool for customer relationship managers or direct marketers to select attractive product categories for their target marketing efforts, such as segment-specific rewards in loyalty programs, cross-merchandising activities, targeted direct mailings, customized supplements in catalogues, or customized promotions. The proposed methodology requires cus- tomers' multi-category purchase histories as input data and proceeds in a stepwise manner. It combines various data compression techniques and integrates an opti- mization approach which suggests candidate product categories for segment-specific targeted marketing such that cross-category spillover effects for non-promoted categories are maximized. To demonstrate the empirical performance of our pro- posed procedure, we examine the transactions from a real-world loyalty program of a major grocery retailer. A simple scenario-based analysis using promotion responsiveness reported in previous empirical studies and prior experience by domain experts suggests that targeted promotions might boost profitability between 15 % and 128 % relative to an undifferentiated standard campaign.
Item Type: | Article |
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Additional Information: | Open access funding provided by Vienna University of Economics and Business (WU). |
Keywords: | Cross-category purchases / Target marketing / Customized coupons / Clustering / Association rule mining |
Classification Codes: | JEL C52, C55, M3 |
Version of the Document: | Published |
Depositing User: | ePub Administrator |
Date Deposited: | 03 Jun 2016 12:15 |
Last Modified: | 24 Oct 2019 13:41 |
Related URLs: | |
FIDES Link: | https://bach.wu.ac.at/d/research/results/77071/ |
URI: | https://epub.wu.ac.at/id/eprint/5074 |
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