Practical Problem Solving - Java Data Mining: Strategy, Standard, and Practice - page 291

considerations about the practical problems to be solved, and the
skills needed to solve them.
Each scenario is associated with its business environment, the
main actors involved in the process, and the specifications leading to
the actual Java implementation. When needed, the scenario itself is
broken down into operations or tasks.

12.1 Business Scenario 1: Targeted Marketing Campaign

As discussed in Chapter 2, there are many potential applications of
data mining in customer relationship management (CRM). For exam-
ple, response modeling can be used to determine whether a customer
will respond positively to a campaign: often, the offer is made via a
marketing campaign that can be a mass e-mailing, paper brochure, or
call center solicitation to propose a new product to consumers. We
have selected a scenario in this domain to illustrate the classification
mining function. The scenario description follows.
The company High End Widgets (HEW) sells high-tech appliances
to wealthy individuals. Because it is a very dynamic environment,
HEW must perform marketing campaigns to its base of a million cus-
tomers to present their new offers. On average, the company offers
two new products every month. So, currently, all HEW customers are
contacted twice a month. The HEW marketing department has been
asked to reduce the cost of mailing campaigns as well as to reduce the
number of mails per customer, because some of these customers are
now complaining about the number of mails they receive from
HEW—customer fatigue. The current response rate of each campaign
is about 2 percent, which means that roughly 2 percent of the people
contacted through these campaigns actually buy products.
Because these mailings are done twice a month, the HEW market-
ing department has decided to develop a specific application to tar-
get the consumers to contact. In marketing, this is called targeting or
campaign optimization . This application will be realized in Java and
will be used by a campaign manager. The following section describes
the specifications of this application example.

12.1.1 Campaign Specifications

To both reduce the number of mails and avoid contacting customers
not interested by the new offers, HEW has decided to focus its