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innovation is a combination of specific innovations in technology, business model, social-organization and demand with the objective to improve existing service systems incremental innovation, generate new value propositions (offering) or build new service systems radical innovation, services innovation may also result from novel combinations of existing service elements.7.There have been a number of articles in the business literature proclaiming the potentially large contributions that data mining could make to the service sectors. Show an example in which the application of data mining had actually made a difference to a service company.Data mining is an advanced is an advanced numerical modeling technique that could be used to extract valuable insights from databases that record the transactional activities and consumption patterns of customers. A well-known example is the way Harrah’s entertainment applied data mining to improve its probability (loveman 2003). Operates twenty six casinos in thirteen states. For the example, the company identified that 26 percent of its gamblers generated 62 percent of its revenue the pareto principle. These core customers are typically former teachers, doctor, bankers and machinist not the limousime rinding higher rollers. These are middle- aged and senior
adult who hav a discretional amounts of time and income. Thay prefer free casino chip rather than room or dinners. Many of them visit a casino on the wat home from work or on a weekend night out. The company also found that happy customers spend 24 percent more annually, whereas disappointed customers spend 10 percent less.Such information allows the company to fine-tune its knowledge of customer sments using advanced numerical modeling techniques, by designing it is marketing program to focus on these elements of customer service, the company secured customer loyalty and superior profitabitility.Sice the core customers are slot machine players, the company redesigned the floor plan to make it easier for customers to find the preferred slot machine designs as well as to benefit the company. To encourage customer loyalty, the company introduces the “ toral Rewards” card that allows customers to accumulate playing and other credits from any of the campany and the other credits from any casino companies of de the credit from bases od incentive rewards fo the customers, the card system provides a very useful source so propriety customer data for company. Because customers spend more when they stay in casino hotels, the company offers free rooms to high-value gamblers.All the changes that one makes in the different companies are evaluated so that they do not have losses but profits. In this case the casino rewards what can accrue from the rooms among other facilities that can have the hotel.