Kenneth C. Laudon,Jane P. Laudon Management Information System 12th Edition pdf

Predictive analytics

use data mining techniques, historical data, and assump-

tions about future conditions to predict outcomes of events, such as the probabil-

ity a customer will respond to an offer or purchase a specific product. For exam-

ple, the U.S. division of The Body Shop International plc used predictive analytics

with its database of catalog, Web, and retail store customers to identify customers

who were more likely to make catalog purchases. That information helped the

company build a more precise and targeted mailing list for its catalogs, improving

the response rate for catalog mailings and catalog revenues.

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Business intelligence tools deal primarily with data that have been structured in

databases and files. However, unstructured data, most in the form of text files,

is believed to account for over 80 percent of an organization’s useful informa-

tion. E-mail, memos, call center transcripts, survey responses, legal cases,

patent descriptions, and service reports are all valuable for finding patterns and

trends that will help employees make better business decisions.