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Market Basket Analysis in Data Warehousing and Mining Activity 2
Market Basket Analysis in Data Warehousing and Mining Activity 2
This is a technique that gives the careful study of purchases done by a customer in a
supermarket. This concept identifies the pattern of frequent purchase items by customers.
This analysis can help to promote deals, offers, sale by the companies, and data mining
techniques helps to achieve this analysis task. Example:
Data mining concepts are in use for Sales and marketing to provide better customer
service, to improve cross-selling opportunities, to increase direct mail response
rates.
Risk Assessment and Fraud area also use the data-mining concept for identifying
inappropriate or unusual behavior etc.
Data Warehousing in Market Basket Analysis
Data Warehousing is essential for effective Market Basket Analysis. It involves the process of
collecting and integrating data from various sources, such as sales transactions, customer
records, and inventory databases, into a centralized data warehouse. This consolidated data
provides a single source of truth for analysis, making it easier to perform MBA.
Data Cleansing : Data quality is crucial for accurate analysis. Data cleansing
techniques are applied to remove inconsistencies, errors, and redundancies in the data.
Data Integration : Data from different sources are integrated and structured in a way
that allows for meaningful analysis.
Data Preprocessing : The data is pre-processed to remove noise, missing values, and
outliers.
Association Rule Mining : MBA employs association rule mining techniques to find
patterns in the data. The most common algorithm used is the Apriori algorithm, which
identifies item sets with high support and confidence.
Rule Generation : The identified item sets are used to generate association rules,
such as "If A is purchased, then B is likely to be purchased."
Rule Evaluation : The generated rules are evaluated based on metrics like support,
confidence, and lift to determine their significance and relevance.
2. Predictive Market Basket Analysis : Market basket analysis that predicts future
purchases based on past purchasing patterns is known as predictive market basket
analysis. Large volumes of data are analyzed using machine learning algorithms in this
sort of analysis in order to create predictions about which products are most likely to
be bought together in the future. Retailers may make data-driven decisions about which
products to carry, how to price them, and how to optimize shop layouts with the use of
predictive market basket research.
Sales Growth : Market basket analysis can assist businesses in determining which
products are most frequently bought together and where they should be positioned in
the store to grow sales. Retailers may boost revenue and enhance customer shopping
experiences by improving store layouts and product positioning.
Applications of Market Basket Analysis
Market Basket Analysis has several applications in Data Warehousing:
Product Placement : Retailers can optimize the placement of products in physical
stores or online platforms by placing related items together, encouraging customers to
buy more.
Conclusion
Market Basket Analysis is a powerful tool for businesses to gain insights into customer
behaviour, improve sales strategies, and enhance customer satisfaction. When integrated with
a well-structured data warehousing system, MBA can provide valuable information that drives
business growth and profitability. However, it is crucial to address data quality and privacy
concerns and continuously update MBA strategies to stay competitive in the market.