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    Data Mining - Target Marketing

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    Kunal Somaiya
    The catalog company wants to increase sales of TVs by targeting their marketing more effectively. They will use data mining techniques on demographic data to create a model that predicts which individuals are most likely to respond positively to the marketing offer. This supervised classification model will help the company identify the 1.5 lakh highest potential customers to send brochures to, reducing marketing expenses compared to random mailing while increasing expected revenue. Testing different sample sizes can help optimize the targeting strategy.

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    Data Mining - Target Marketing

    Uploaded by

    Kunal Somaiya
    40 views1 page
    The catalog company wants to increase sales of TVs by targeting their marketing more effectively. They will use data mining techniques on demographic data to create a model that predicts which individuals are most likely to respond positively to the marketing offer. This supervised classification model will help the company identify the 1.5 lakh highest potential customers to send brochures to, reducing marketing expenses compared to random mailing while increasing expected revenue. Testing different sample sizes can help optimize the targeting strategy.

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    Data_Mining_-_Target_Marketing

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    The catalog company wants to increase sales of TVs by targeting their marketing more effectively. They will use data mining techniques on demographic data to create a model that predicts which individuals are most likely to respond positively to the marketing offer. This supervised classification model will help the company identify the 1.5 lakh highest potential customers to send brochures to, reducing marketing expenses compared to random mailing while increasing expected revenue. Testing different sample sizes can help optimize the targeting strategy.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as doc, pdf, or txt
    40 views1 page

    Data Mining - Target Marketing

    Uploaded by

    Kunal Somaiya
    The catalog company wants to increase sales of TVs by targeting their marketing more effectively. They will use data mining techniques on demographic data to create a model that predicts which individuals are most likely to respond positively to the marketing offer. This supervised classification model will help the company identify the 1.5 lakh highest potential customers to send brochures to, reducing marketing expenses compared to random mailing while increasing expected revenue. Testing different sample sizes can help optimize the targeting strategy.

    Copyright:

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    Data Mining – Target Marketing

    1. A catalog company operating from Mumbai plans to sell TV. It expects to sell about
    10,000 sets at price of Rs. 10,000 each. Marketing strategy is to mail the brochure and
    offer to the families in surrounding states. Cost of sending one catalog is Rs. 20.
    a. How will company determine positive response rate?
    b. If positive response rate is 1% (for sending mail randomly), how many
    brochures need to be sent? What is the expense? What is the expected
    revenue? What it the expense as % of revenue?
    c. What is the business problem?
    d. What can be done to reduce the expense?

    2. What is the data mining problem?

    3. What is the output variable? How many values does it take?

    4. What are the input variables? Who is the best person in deciding the input
    variables?

    5. Is it Supervised / Unsupervised technique?

    6. Is it Classification / Regression problem?

    7. Company buys demographics of 1 Million persons for Rs. 100,000. What do we


    get as far as Data Mining problem is concerned?

    8. Company then randomly sends the brochure to 10,000 persons. About 100
    persons accept the offer. What do we get as far as Data Mining is concerned?
    How much does it cost?

    9. Data Mining techniques are used to relate the demographic attributes to the
    acceptance / rejection to the offer

    10. It was found that response rate was 10% for the persons where predicted
    probability for accepting the offer from the data-mining model was 0.75 and
    above. (How?)

    There are 1.5 lakh persons, for which predicted probability is 0.75 and above

    a. How many persons will company send the brochure and to whom?
    b. What will be the total cost? (Cost of data mining analysis is Rs. 5 lakh)
    c. What is the total savings?
    d. If instead of 1.5 lakh such persons, only 75,000 persons had predicted
    probability of 0.75, what will you do?

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