(EMBA) A Study on Customer Retention And Growth Through Customer Relationship Management -An Electronic Manufacturer Case : :
EMB92 06/20/2003 I
RFM MODEL 4P : RFM MODEL II
ABSTRACT The Persian Gulf War was just over. US impressed everyone with achieving military goals within 1 month. The victory attributed to high tech weapon, successful strategies and calculated tactics. Running a business is similar to engaging a battle. Good quality products are not only factor to gain market, you got to have comprehensive marketing instruments and strategies to dominate the market. Therefore, a marketing manager needs to think about how to acquire and keep customers in the short time and under limited resources. It also means he must figure how to search target, choose target and achieve target in a big pool of customers. The study uses a case from an electronic manufacturer. The firm engages in an export business. The main purpose of the research is to find a cost effective approach for the firm doing international marketing in the era of Internet. The study presents an approach which uses customer database, transaction files and e-mail as the target of data mining. Two techniques, RFM models for target selection and statistical analysis for selecting active customer are applied in data mining process. The study shows the proposed methods are very helpful to support the customer relationship management. The results are essential to develop market strategy. Key words: RFM, data base marketing, relationship marketing, e-mail marketing, RFM model. III
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Marketing Mix Target Market Place Promotion 11
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G i = X U c i=1 G i G φ( i j) j µ Gi µ G i ik ik µ ik µ {0,1 } 1 i c 1 k n ik c µ ik = 1} k { 1,2,..., n i= 1 n 0 < µ ik < n } i { 1,2,..., c k =1 25
µ ij [ 0,1], i = 1,2,..., N; j = 1,2,..., K k µ ij = 1, i = 1,2,..., N j= 1 N 0 < µ ij < N, j = 1,2,..., K i= 1 m 2 J ( U, X, C) = µ x c m K N j= 1 i= 1 1 < m < µ c µ c ij j ij ij i j j m µ ij xi i= 1 c j µ ij = K j = 1,2,..., K m µ N i= 1 ij 26
µ ij µ ij = K i = 1,2,..., N; j = 1,2,..., K 2 xi c j m 1 ( ) x c k = 1 i k 1 < m < d ij ( t 1) = xi c j ( t 1) ; j = 1,2,..., K 1 µ ij ( t) = ; j = 1,2,..., K K 2 d ij ( t 1) m 1 ( ) d ( t 1) k = 1 m µ ij ( t) xi i= 1 c j ( t) = ; j = 1,2,..., K N m µ ( t) K ik N t= 1 ij 2 E( t) = c ( t) c ( t 1) < ε j= 1 j j 27
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λ ( λt) λ λ x! x X =1,2,... λ λ λ λ λ µ τ µ µ µ τ τ τ µ τ µ µ τ µ µ λ 29
γ α γ 1 αγ λ e λ α γ, Γ( γ ) λ γ, α λ α γ, γ α λ α γ, γ α 2 µ ς β ς 1 βµ µ e µ ς β Γ( ς ) µ ς β µ ς β ς β µ ς β ς β 2 λ µ α β γ ς α β γ ς 30
i 1 T Ε[ X T ] = X ( i) N( T ) i= 1 i 1 T 2 Var[ X T ] = ( X ( i) E[ X T ]) N( T ) 1 i= 1 γβ β ς 1 E[ X α, β, γ, ς, T] = [1 ( ) ] α( ς 1) β + T Var[ X α, β, γ, ς, T ] = E[ X α, β, γ, ς, T ] ( E[ X α, β, γ, ς, T ]) β T ( ) β + T ς 1 ] 2 2γ ( γ + 1) β β β β + [ ( ) 2 α ( ς 1) ς 2 ς 2 β + T α β γ ς E[ X E[ X α, β, γ, ς, T α, β, γ, ς, T a b ] ] 1 ( β /( β + T )) ς 1 a = ς 1 1 ( β /( β + Tb )) 31
E[ X E[ X T a T b ] ] 1 ( β /( β + T )) ς 1 a = ς 1 1 ( β /( β + Tb )) E[ X T E[ X T c d ] ] 1 ( β /( β + T )) ς 1 c = ς 1 1 ( β /( β + Td )) ς β γ α ( ς 1) E[ X T e = s 1 β 1 ( β /( β + Te )) ] γ α γ ς α β α α β P( τ > T α > β, γ, ς, X β + T ( ) α + T ς F( a, b ; c ; z 1 1 1 1 ς α + T = x, t, T ) = {1 + [( ) γ + ς + x α + t ( t))]} 1 γ + x β + T ( ) α + t ς F( a, b ; c ; z 1 1 1 1 ( t)) 32
33 ς γ + + = x a 1 1 1 + =ς b 1 1 + + + = ς γ x c y y z + = α β α ) ( 1 α β 1 2 2 2 2 2 2 2 2 ))]} ( ; ;, ( ) ( )) ( ; ;, ( ) ( ) [( {1 ),,,,, ( + + + + + + + + + + + = = < > t z c b a F T T t z c b a F t T t T x T t x X T P x ς γ ς γ β α β β β α ς γ ς ς γ β α τ γ + ς + = x a 2 ς =γ + 2 b 1 2 + + + = ς γ x c y y z + = β α β ) ( 2 α β 1 1]} ) [( {1 ),,,,, ( + + + + + + + = = = > ς γ α α ς γ ς ς γ β α τ x t T x T t x X T P = + Γ + Γ + Γ Γ Γ Γ = 0! ) ( ) ( ) ( ) ( ) ( ) ( ) ; ;, ( n n n z n c n b n a b a c z c b a F θ 2 w σ 2 w σ θ θ
2 σ a σ 2 a θ λ µ 2 σ a σ 2 + σ 2 a w E[ θ Z i ] = P1 Z i + (1 P 1) E( θ ) Z Z X Z i i= = 1 X 2 σ a PX = 2 2 σ σ ( w a + ) X E( θ Z1, Z 2,..., Z X ) = PX Z + (1 PX ) E( θ ) 34
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Receiver Sender Date Inq. Amount (USD) Order Amount (USD) Item HT NA99 0 D E B NA99 HT 020415 E E B HT NA99 020415 E E B 4P 37
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