Joint Optimization of Customer Segmentation and Marketing Policy to Maximize Long-Term Profitability

Topics:
Direct Marketing
Tags:
Erasmus University Rotterdam,
Marketing,
Marketing Research,
Optimization,
Segmentation
Source:
Erasmus University Rotterdam

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Overview: This study presents a joint optimization approach addressing two issues: the segmentation of customers into homogeneous groups of customers and determining the optimal policy towards each segment. It implements this joint optimization framework in a direct-mail setting for a charitable organization. It further determines which marketing policy is optimal using markov decision processes, following similar previous applications. The attractiveness of this stochastic dynamic programming procedure is based on the long-run maximization of expected average profit.

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Format: PDF | Size: 296KB | Date: May 2002 | Pages: 29

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