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On the differential benchmarking of promotional efficiency with machine learning modelling (II): Practical applications

Abstract:

The assessment of promotional sales with models constructed by machine learning techniques is arousing interest due, among other reasons, to the current economic situation leading to a more complex environment of simultaneous and concurrent promotional activities. An operative model diagnosis procedure was previously proposed in the companion paper, which can be readily used both for agile decision making on the architecture and implementation details of the machine learning algorithms, and for differential benchmarking among models. In this paper, a detailed example of model analysis is presented for two representative databases with different promotional behaviour, namely, a non-seasonal category (milk) and a heavily seasonal category (beer). The performance of four well-known machine learning techniques with increasing complexity is analyzed in detail here. In particular, k-Nearest Neighbours, General Regression Neural Networks, Multilayer Perceptron (MLP), and Support Vector Machines (SVM), are differentially compared. Present paper evaluates these techniques along the experiments described for both categories when applying the methodological findings obtained in the companion paper. We conclude that some elements included in the architecture are not essential for a good performance of the machine learning promotional models, such as the semiparametric nature of the kernel in SVM models, whereas other can be strongly dependent of the database, such as the convenience of multiple output models in MLP regression schemes. Additionally, the specificity of the behaviour of certain categories and product ranges determines the need to establish suitable and specific procedures for a better prediction and feature extraction. © 2012 Elsevier Ltd. All rights reserved.