By Jacob LaRivierePreston McAfeeJustin RaoVijay K. NarayananWalter Sun
The author attempts to offer specific, real-world case studies to show how big data has provided value for companies that have worked with Microsoft’s analytics teams. These cases reveal the circumstances in which big data predictive analytics are likely to enable novel and high-value solutions, and the situations where the gains are likely to be minimal.
Starting with the use case for predicting demand for consumer products that are in the “long tail” of consumption, the authors discuss the role of big data in Improved pricing, predictive maintenance and radically new applications that are disrupting existing processes.
The author delves into economics and behavioral traits of customers to illustrate how using a single price can be economically inefficient based on the demand curve and how data can be used judicially for price adjustments that are form of experimentation, allowing firms to learn more about their customers’ price responsiveness.