The targeted marketing of consumer durables

Abstract

In this article, an approach for identifying prime prospects and developing targeted marketing strategies for durables is presented and empirically illustrated using a set of major home appliances. The proposed approach combines probability models for identifying segments (as a function of household characteristics) and determining replacement potentials (as a function of the age of a current unit). Importantly, these models use data that are generally available to manufacturers and retailers of durable products 1e.g.. syndicated survey data, warranty card information, data overlays from commercial firms).

Customer Relationship Management (CRM)

“…Regression methods were soon enhanced by three developments: (1) multivariate statistics such as factor analysis (Cremer, 1974), which has more recently been updated by singular value decomposition methods (Ansari, 2013), and cluster analysis (Cremer, 1974;David Shepard Associates, 1999), (2) probability models (Bayus, 1993;Rao and Steckel, 1995), and (3) a series of advanced econometric models. Factor analysis and cluster analysis often worked hand in hand to provide orthogonal regressors for regression models (Cremer, 1974) or segmentation schemes within which analysts could run separate regression models.…”