Object Oriented Programming & E-Commerce

Data Mining

Group Members
Am i t S i n g h

Anchor Faculty
‡ Prof.Swati Rekha Mohanty

Ar t i K u m a r i Sarabjit Kaur Bharti Singh GROUP NO:-5

AGENDA 
What is data mining? Examples of data mining. Related terms of data mining. What can data mining do? How does data mining work? Examples of data mining in today¶s scenario. Five major elements. Major components of data mining. Data mining classification. Functions. Stages. Popularity growing reason. Future of data mining. Organizational issues. Solutions of industries. Challenges. Applications. Advantages. Data mining models. DM in banking : ICICI bank DM in retail : wal- mart Conclusions Bliography

and actionable information from large databases and then using the information to make crucial business decisions . .What is Data Mining? ‡ Data mining is defined as the process of extracting previously unknown. ‡ Data mining refers to extracting or ¶mining¶ knowledge from large amounts of data. valid.

The company uses data mining to find out what advertising are effective for their competitors.Examples Of Data Mining Predicting whether a newly arrived customer will spend more than 100 $ at a department store. .

associations. or relationships among all this data can provide information.Some Related Terms Of Data Mining  Data:Data are any facts.  Data warehousing:Data warehousing is defined as a process of centralized data management and retrieval. .  Information:The patterns. or text that can be processed by a computer. numbers.

‡ It enables the companies to determine relationships among ³Internal factor´ and ³External factor´. ‡ Some examples of ³Wall Mart´. .What can data mining do? ‡ Data mining is primarily used today by companies.

‡ Data mining works on a modeling system . .How does data mining w ork ‡ Data mining work through that take your information and makes predictive that will forecast . ‡ It also help the company to identify the characteristics of the consumers.

‡ A super market becomes uses an information broker.Examples of Data mining in today's scenario ‡ The US government uses data mining to track fraud. ‡ Bank of America uses it for Sales forecasting. ‡ Basketball teams use it to track game strategy. .

‡ Store and manage the data in a multidimensional database system. ‡ Provide data access to business analysts and information technology professionals. and load transaction data onto the data warehouse system. such as a graph or table. transform. ‡ Analyze the data by application software. ‡ Present the data in a useful format. .Data mining consists of five major elements: ‡ Extract.

Data mining system has major components ‡ Database . Data warehouse or other information repository ‡ Database or data warehouse server ‡ Knowledge base ‡ Data mining engine ‡ Pattern evaluation module ‡ Graphical user interface .

It characterize the general properties of the data in the database.Data mining tasks can be classified as tw o types: ‡ Descriptive:. .It perform inference on the current data in order to make predictions. Predictive:.

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 Understand what products or services are commonly purchased together.  Identify which transactions are most likely to be fraudulent. ..  Segment markets and personalize communications. e. beer and diapers.  Predict what each individual accessing a web site is most likely interested in seeing.  Predict cross-sell opportunities and make recommendations.  Identify which prospects should be included in a mailing list to obtain the highest response rate.  Learn parameters influencing trends in sales and margins.g.Functions of Data Mining  Identify your best prospects and then retain them as customers.  Reveal the difference between typical customers this month and last.

Stages of Data Mining ‡ Explorations ‡ Model building and validations ‡ Deployment .

Contd«.Diagram of Stages Selection Pre-processing PROCESSED DATA DATA TARGET DATA Transformation TRANSFORMED DATA Mining MINING PATTERN Evaluation KNOWLEDGE .

Reasons for grow ing popularity of Data Mining Growing Data Volume Limitations of Human Analysis Low Cost of Machine Learning .

Future of Data Mining ‡ Unfulfilled expectations ‡ Common goals ‡ Technology cycle .

Organisational issues There are many organisational issues such as Political issues« .

including real-time. and affiliate marketing ‡ Microarray data analysis. email. analytics in the cloud. BI (Business Intelligence). web. Database and OLAP software Bioinformatics and Pharmaceutical solutions CRM (Customer Relationship Management) Data Providers. and marketing Fraud Detection solutions Health Care and Human Resources solutions Knowledge Management and News Marketing solutions. Data Cleansing (Cleaning) Tools E-Commerce solutions Email analysis. response. analytics on-demand. gene expression analysis .Data Mining Solutions for Different Industries ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ SaaS Analystics.

Contd«. ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Personalization solutions Privacy software and solutions Real-Time Analytics and Decisioning solutions Retail solutions Risk Analysis and Credit Scoring Sports and Entertainment Stock and Investment Analysis and Prediction Survey creation and analysis Telecom Travel sites and solutions Twitter Analytics sites and solutions. Web Content Mining . Web Advertising Web Mining.

Challenges faced by Data Mining Privacy issue Security Issue Misuse of information / Inaccurate information .

manufacturer can detect faulty equipment.Advantages of Data Mining models based on historical data to predict who will respond to new marketing campaign Marketing: helps in marketing companies to build Finance: helps financial institutions to provide information about loan information and credit reporting Manufacturing: by Applying DM in operational engineering data. Government: DM helps government agency by analyzing records of financial transaction to build pattern that can detect money related fault and criminal activity .

Application of Data Mining Industry Finance Insurance Telecommunication Transport Consumer Goods Data Service Provider Utilities Application Credit card analysis Claim fraud analysis Call record analysis Logistic management Promotion analysis Value added data Power usage analysis .

Types of Data Mining Models used in different business ‡ Claims Fraud Models ‡ Customer Clone Models ‡ Response Models ‡ Revenue and Profit Predictive Models ‡ Cross-Sell and Up-Sell Models ‡ Marketing Effectiveness Creative Models ‡ Real Time Web Personalization with eNuggets .

‡ ICICI bank uses Data mining technology to handle its data effectively and efficiently . ‡ It is one of the 2nd largest private bank of India Established in 1994 ‡ CHANDA KOCHHAR is the CEO of ICICI Bank.Data Mining: A competitive tool in the banking Example: ICICI bank ‡ ICICI: Industrial credit & investment corporation of India.

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.Software used by ICICI ICICI bank and all other public and private banks are computerized and all sort of transaction takes place through a software that is TBC (total branch computerization) software package. It is design to carry out day to day operation at the branch level This software packages help them to connect with all the branch of bank as well as the RBI and head offices.

.Data Mining solve the issue in the following areas ICICI bank uses DM for the following areas:  Customer segmentation  Profitability  Credit scoring and approval  Predicting payment default  Marketing  Detecting fraudulent transaction  Cash management  Forecasting operations  To identify their most profitable credit card customers or high risk loan applicant.

thus bank is able to market and sell targeted services to customers.ICICI uses Data mining in the following area ‡ Marketing: ICICI uses database marketing to improve customer satisfaction and by consolidating five year of customer history records. ‡ Risk Management: Bank executives uses Data mining to know whether the customer dealing with is reliable or not. . 2nd by using hybrid approach ‡ Fraud detection: ICICI has two approaches to detect fraud- ‡ Customer acquisitions and retentions: Data Mining help bank to retain its present customer and as well gain new customer. ‡ Cross-selling: here a service provider make it attractive for a customer to buy additional product or service with the same business. 1st the bank taps the data warehouse of the 3rd parties and uses data mining programs to identify fraud pattern.

.Data Mining a competitive tool in Retail industry Retailers have been collecting enormous amount of data through out the year and now they have the tool to sort those data's and find useful piece of information Data mining helps in providing information's on: ‡ Sales trends ‡ Customer buying habits and preference ‡ Seasonal variations ‡ Customers peak traffic So this are some vital area where DM is used bu big retail companies.

500 stores in 15 countries. is an American multinational retailer corporation that runs chains of large discount department stores and warehouse stores. Wal-Mart Stores.Wal-Mart Stores. branded as Walmart since 2008 and Wal-Mart before then. Its was founded in 1962 by Walton family. so it has to deal with large amount of data and information to run their efficiently and effectively . Inc. The company is the world's 18th largest public corporation. under 55 different names. Inc. Wal-Mart has 8.

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It is the method to find optimum location for promotion of product.Use of Data Mining in following area ‡ Marketing: Wal-Mart uses ³Market Basket analysis´. Under marketing there are some sub area where DM is used by Wal-Mart:o o o o o o Store operations Loss prevention Merchandising Inventory Workforce management Customer ‡ Risk Management: Wal-Mart uses DM to understand which product will be vulnerable to competitive offers or changing customer purchasing power .

. Wal-Mart uses ³exception based reporting´ which record all the transaction done throughout the day by the employee and it provide detail information about and the fraud can be easily detected. ‡ Fraud detections: it was estimated that 38% of retail shrink occur due to dishonest employees but by implementing DM the loss has been decreases. ‡ Customer acquisitions and retentions: by studying past purchasing behavior of the customer..Contd«. they could plan their promotional strategies and incentives to retain their present customer as well as to gain their new customers .

Undoubtedly. retail and telecom) are using data mining effectively. Its practical applications in such areas as analysing medical outcomes. optimising manufacturing processes etc. It is universally accepted that many industries (including banking. They use data warehousing to combine various data from databases into an acceptable format so that the data can be mined. The data is then analysed and the information that is captured is used throughout the organisation to support decision-making. . predicting customer purchase behaviour. data mining has many uses in industries. have been very successful. predicting the personal interests of Web users.Conclusion ‡ Data mining is a tool used to extract important information from existing data and enable better decision-making throughout the banking and retail industries. detecting credit card fraud.

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