Utility-based association rule mining: A marketing solution for cross-selling

Abstract

Recently, a utility-based mining approach has emerged as an alternative mechanism to frequency-based mining in an attempt to reflect not only the statistical correlation but also the semantic significance (e.g., price and quantity) of items. However, existing mining trajectories utilizing high-utility itemsets may not offer firms sufficient business insights unless they can precisely assess the value of association rules, which may vary substantially depending on many business parameters included in the assessment. In this study, we propose a utility-based association-rule mining method that valuates association rules by measuring their specific business benefits accruing to firms. Based on previous studies, three key elements (opportunity, effectiveness, and probability) are identified to define and operationalize a users' preference as a utility function. To apply the utility-based mechanism to the processing of large transaction databases, we constructed functional algorithms, with heightened attention paid to their pruning strategies, and evaluated them based on real-world databases. Experimental results show that the proposed approach can provide users with greater business benefits than the high-utility itemset mining approach, suggesting several important strategic implications for both research and practice. (C) 2012 Elsevier Ltd. All rights reserved.