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Data mining application for customer segmentation based on loyalty: An iranian food industry case study

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3 Author(s)
Ali Hajiha ; Department of industrial management, Islamic Azad University, North Tehran Branch, Tehran, Iran ; Reza Radfar ; Samira Sarafi Malayeri

Data Mining (DM) is a powerful new technique to help companies discover the patterns and trends in their customers' preferences. It is also a well-known tool for customer relationship management (CRM). Data mining methodology has made a tremendous contribution for researchers wanting to extract hidden knowledge and information. This study has proposed a new procedure, based on an expanded RFM model, by including two additional parameters D and C. It constructs a model for clustering customer value based on RFMDC attributes and K-means algorithm. We evaluate the result and suggest suitable behavior policies for each cluster. The developed methodology has been implemented for Kalleh dairy company in Iran to illustrate the proposed procedure.

Published in:

Industrial Engineering and Engineering Management (IEEM), 2011 IEEE International Conference on

Date of Conference:

6-9 Dec. 2011