Running Heading: DATA MINING
Assignment 4: Data Mining
As we know data mining takes place in retailing and sales, banking, education, manufacturing and production, health care, insurance, broadcasting, marketing, customer services, and a number of other areas. So with the understanding of where data mining happen this paper will determine the benefits of data mining to the businesses when employing in the following areas Predictive analytics to understand ...view middle of the document...
reduces the cost of making mistakes. This type of algorithm allows businesses to test all sorts of situations and scenarios it could take years to test in the real world. Studying customer behavior gives businesses a competitive advantage and allows them to stay ahead of the competition in their market place.
Associations Discovery and Customer Purchases
Association analysis is useful for discovering interesting relationships hidden in large amounts of data. There are two things to remember when using association analysis with regard to market data: discovering patterns from a large transaction data set can be computationally expensive and some of the discovered patterns are potentially spurious because they may happen simply by chance.
Association discovery finds rules about items that appear together in an event such as a purchase transaction. Market-basket analysis is a well-known example of association discovery. This algorithm is used for recommendation engines. These engines are used to recommend products to customers based on items they have already bought or shown interest in. This provides a benefit to the business by allowing them to effectively stage their products, as well as, knowing which customers to target for specific promotions or new products.
Web Mining to Discover Business Intelligence from Web Customers
Web data mining is the process of extracting structured information from unstructured or semi structured web data sources. Companies use web data mining as a tool to gather data from different websites and collate it together to do analysis, build websites which provide information from different websites. It helps the visitors to get a
lot of information in one location instead of reading information from different websites. For business intelligence, competitiveness in the markets of ecommerce and the vast number of options customers have today have forced business’s to employ marketing strategies that are built largely on data mined from web mining. Web usage mining is critical for effective Website management, creating adaptive Web sites, business and support services, personalization, network traffic flow analysis and more. Business intelligence keeps a business informed of market trends, alerts about new avenues of generating revenue, and helps determine the status of the competition.
Clustering and Customer Information
Clustering analysis subdivides a market into distinct subsets of customers where any subset may potentially be selected as a market target to be reached with a distinct marketing mix. This type of analysis finds clusters of data objects that are similar in some sense to one another and segments that data. Businesses today collect information about what pages site users visit, and about the order in which the pages are visited. Because the business provides online ordering, customers must log in to the site. This provides the
company with click information for each customer...