TAILIEUCHUNG - INFLUENTIAL MARKETING: A NEW DIRECT MARKETING STRATEGY ADDRESSING THE EXISTENCE OF VOLUNTARY BUYERS

The traditional direct marketing paradigm implicitly assumes that there is no possibility of a customer purchasing the product unless he receives the direct promotion. In real business environments, however, there are “voluntary buyers” who will make the purchase even without marketing contact. While no direct promotion is needed for voluntary buyers, the traditional response-driven paradigm tends to target such customers. In this thesis, the traditional paradigm is examined in detail. We argue that it cannot maximize the net profit. Therefore, we introduce a new direct marketing strategy, called “influential marketing.” To achieve the maximum. | INFLUENTIAL MARKETING A NEW DIRECT MARKETING STRATEGY ADDRESSING THE EXISTENCE OF VOLUNTARY BUYERS by Lily Yi-Ting Lai . University of British Columbia 2004 THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE In the School of Computing Science Lily Yi-Ting Lai 2006 SIMON FRASER UNIVERSITY Fall 2006 All rights reserved. This work may not be reproduced in whole or in part by photocopy or other means without permission of the author. APPROVAL Name Lily Yi-Ting Lai Degree Master of Science Title of Thesis Influential Marketing A New Direct Marketing Strategy Addressing the Existence of Voluntary Buyers Examining Committee Chair Dr. Martin Ester Associate Professor of Computing Science Dr. Ke Wang Senior Supervisor Professor of Computing Science Dr. Jian Pei Supervisor Assistant Professor of Computing Science Dr. S. Cenk Sahinalp Internal Examiner Associate Professor of Computing Science Date Approved ii ABSTRACT The traditional direct marketing paradigm implicitly assumes that there is no possibility of a customer purchasing the product unless he receives the direct promotion. In real business environments however there are voluntary buyers who will make the purchase even without marketing contact. While no direct promotion is needed for voluntary buyers the traditional response-driven paradigm tends to target such customers. In this thesis the traditional paradigm is examined in detail. We argue that it cannot maximize the net profit. Therefore we introduce a new direct marketing strategy called influential marketing. To achieve the maximum net profit influential marketing targets only the customers who can be positively influenced by the campaign. Nevertheless targeting such customers is not a trivial task. We present a novel and practical solution to this problem which requires no major changes to standard practices. The evaluation of our approach on real data provides promising results. Keywords classification direct

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