DATA MINING

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 What is data mining ?

● Data mining is a collection of technologies, processes and analytical approaches

brought together to discover insights in business data that can be used to make better
decisions.

● It combines statistics, artificial intelligence and machine learning to find patterns,

relationships and anomalies in large data sets.

● With data mining, a business can discover patterns in current customer behaviors that
may not be apparent to a human analyst. It also can predict future trends.
 How Data Mining Works ?
• Data mining works through the concept of predictive modeling.

• Suppose an organization wants to achieve a particular result. By analyzing a dataset

where that result is known, data mining techniques can build a software model that
analyzes new data to predict the similar results.

• Data mining involves exploring and analyzing large blocks of information to glean
meaningful patterns and trends.

• It can be used in a variety of ways, such as database marketing, credit risk

management, fraud detection.
 Data Mining Process

1 2 3 4

Start with historical Analyze the Write rules Apply the rules
data historical data
 What Can Data Mining Do?
• Data mining finds hidden relationships and patterns in data that human analysts
and other analysis techniques are likely to miss.
• The insights it reveals can help a business make better decisions, increasing
revenue or making marketing more efficient

Importance
• The benefits are almost endless. Understanding customer behaviors can lead to
new product, service or marketing ideas.
• Detecting intrusions can prevent a devastating theft of customer data.
Data Mining Techniques

Descriptive model
01 Descriptive analytics finds patterns and
relationships in current data.

Predictive model
02 Used to predict future outcomes, such as whether
a loan applicant is a good risk

Outlier Analysis
03 Used to find anomalies, that is, data that doesn’t fit
neatly into patterns. Outlier analysis is especially
useful in fraud detection
 Key Data Mining Concepts

Data cleansing Target

The process of correcting errors The goal of data mining .for

and omissions in data before example, identifying high-value
analyzing it. customers.

Model Predictors

The knowledge discovery of The related data that leads to

relationships among data, often the target
expressed as rules
 Key Data Mining Concepts

Case Machine learning

A specific instance of data, such Mercury is the smallest and

as a particular customer’s innermost planet in the entire
information Solar System

Market analysis

Discovering buying behaviors of

customers based on past
buying patterns.
 Advantages

Improved customer Better marketing

Increased cost efficiency
retention
Understanding customer Data mining can help a
Manufacturing costs could
behavior can improve company get more value
be lowered through it
customer relations out of their marketing
campaigns

Higher service
Optimal product pricing
quality
Finding and fixing areas Using data mining to
where quality falters analyze the interplay of
pricing variables
Tools Complexity
Accuracy
Many data analytics tools are Data mining techniques are
complex and challenging to use. not infallible, so there’s
always the risk that the
information isn’t entirely
accurate.

Drawbacks of
Data Mining
Large Size Cost

Data mining requires large Data mining involves lots of

databases, making the technology in use for the data
process hard to manage collection process which cost a lot.
 conclusion
• Data mining opens opportunities for companies to improve
their bottom lines by finding patterns and relationships in
data they already collect.

• It has proven benefits in every industry. Meanwhile, the

technologies required to perform data mining are becoming
more automated