Quotation Reutterer, Thomas, Hornik, Kurt, March, Nicolas, Gruber, Kathrin. 2017. A Data Mining Framework for Targeted Category Promotions. Journal of Business Economics (JBE) (früher: Zeitschrift für Betriebswirtschaft ZfB), 87, (3), 337-358.


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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 customers’ multi-category purchase histories as input data and proceeds in a stepwise manner. It combines various data compression techniques and integrates an optimization 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 proposed 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.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Journal of Business Economics (JBE) (früher: Zeitschrift für Betriebswirtschaft ZfB)
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, INF-A, STRAT-B, WH-B
Language English
Title A Data Mining Framework for Targeted Category Promotions
Volume 87
Number 3
Year 2017
Page from 337
Page to 358
Reviewed? Y
URL http://link.springer.com/article/10.1007/s11573-016-0823-7
DOI http://dx.doi.org/10.1007/s11573-016-0823-7
Open Access Y
Open Access Link https://link.springer.com/article/10.1007%2Fs11573-016-0823-7

Associations

People
Reutterer, Thomas (Details)
Hornik, Kurt (Details)
Gruber, Kathrin (Former researcher)
External
March, Nicolas (Rewe Digital, Germany)
Organization
Service Marketing and Tourism IN (Details)
Research Institute for Computational Methods FI (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
5301 Distributive trades (Details)
5307 Business and management economics (Details)
5315 Commercial science (Details)
5320 Marketing (Details)
5321 Market research (Details)
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