1 / 10

Customer Relationship Management: A Database Approach

MARK 7397 Spring 2007. Customer Relationship Management: A Database Approach. Class 11 Discriminate Analysis. James D. Hess C.T. Bauer Professor of Marketing Science 375H Melcher Hall jhess@uh.edu 713 743-4175. Discriminant Analysis of Toaster Customers.

jelani-simmons
Download Presentation

Customer Relationship Management: A Database Approach

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. MARK 7397 Spring 2007 Customer Relationship Management:A Database Approach Class 11 Discriminate Analysis James D. Hess C.T. Bauer Professor of Marketing Science 375H Melcher Hall jhess@uh.edu 713 743-4175

  2. Discriminant Analysis of Toaster Customers GS = location of Goldstar buyer Size of Family BD = location of Black & Decker buyer 10 BD BD 9 GS 8 BD 7 BD 6 BD GS GS 5 4 GS GS 3 2 1 Taste for 0 10 20 30 40 50 60 70 80 90 100 Speed

  3. Toaster Customers Means and Confidence Circles Size of Family Location of average Black & Decker buyer 10 BD BD 9 GS Location of average Goldstar buyer 8 BD 7 BD 6 BD GS GS 5 4 GS GS 3 2 1 Taste for 0 10 20 30 40 50 60 70 80 90 100 Speed

  4. Toaster Customers Means and Confidence Ellipses Size of Family 10 BD BD 9 GS 8 BD 7 BD 6 BD GS GS 5 4 GS GS 3 2 1 Taste for 0 10 20 30 40 50 60 70 80 90 100 Speed

  5. Discriminant Analysis of Toaster Customers Size of Family 10 BD BD 9 0=-2.0-.013TS+.456SF or SF=4.2+.03TS GS 8 BD 7 BD 6 BD GS GS 5 4 GS GS 3 2 1 Taste for 0 10 20 30 40 50 60 70 80 90 100 Speed

  6. qGSC(BD|GS) XBDb+XGSb Xb < -------------- + ln --------------------- 2 qBDC(GS|BD) Assignment of Observation to Population Suppose we have computed discriminant coefficients b and have observed a value X for an observation. Suppose that a priori we think the two populations have probabilities qBD and qGS and the costs of misclassification are C(BD|GS) and C(GS|BD). Let the group centroids be XBD and XGS then the observation should be allocated to GS if Note: if prior probabilities and costs are symmetric then the last term above is ln(1)=0. However, suppose that qGS=2/3 and misclassifying a GS as BD is 5 times more costly than misclassifying a BD as GS. Then the threshold for allocating to GS is easy since ln(10)=+2.3.

More Related