Data mining commonly referred to as knowledge discovery. It is the process which involves analysing of data from different perspectives and then briefing the useful information which helps in increasing cost, revenue etc.
Data mining software is the most important analytical tool. It is used in analysing, categorisation and measuring various dimensions and angles. In simpler words data mining is finding of correlations or patterns amongst various fields.
Data mining is a new term but we must not forget technology is prevalent since ages. Various companies have used latest computers to analyse and find out market research reports since years. The continuous innovation of computer has led to increase in accuracy and efficiency of the technology.A good example can be seen in Midwest Grocery chain, which used data mining software of Oracle, which analysed consumer-buying pattern. Here it was noted when men bought diapers on Thursdays and Saturdays they preferred to buy beer along with diapers. Thus, it was concluded that the retailer must stock up beer cans especially on weekends. This conclusion was only possible through the data mining soft wares. This helps the smart marketer to strategize its marketing techniques and promotions.
Data mining is effectively used by companies, which focus strongly on their consumer. Today we all know customer is the king. Thus it is essential for every sector be it finance, retail, communications or any other marketing organization to know the behaviour of its consumers.
Through data mining, companies can build up relationship between internal and external factors. Like price, product and promotion can be correlated with competition, demography and economic indicators.
A retailer can use the individual purchase history in forecasting monthly buying capacity and at the same time use this data for targeted promotions. By mining small information like demographic data knowledge about warranty cards, development of specific customer segments and promotions are effectively utilized.
Information technology has evolved analytical systems and separate transaction, by using data mining both the elements can be interlinked. There are different kinds of analytical software like:
- Machine learning
- Neural networks
Wal-Mart is the pioneer in Data Mining. It has transformed supplier relationships over the years. It captures point of sale records from 2900 stores based in 6 countries. This data is continuously transmitted to its data warehouse. Wal-Mart then allows its 3500 suppliers to go through its data reports and identify consumer-buying patterns. This helps in store display managements and many merchandising opportunity for brands. The placement and position of products on which part of shelf space is all based on data through the information system.
In this highly competitive world, correct data mining is very important. Through advanced tools, huge pool of customer data can be extracted within seconds which helps the brands to transform themselves according to their consumers and clients.
Data mining is definitely a very successful tool, which is the crucial requirement of every company. All the strategies and decisions are based on data mining reports. The promotions, launch of new products and brands are all based on the data mined from the consumer buying behaviour and pattern.
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