∗Gaurav Ahuja ABSTRACT
This paper studies the data mining as new and emerging tool for Market Analysis. This reveals that Data Mining which is the process of extracting the various kinds of business information from the data warehouse helps in various functional area of market analysis i.e. Market basket analysis, customer profiling web-marketing etc.to gain the competitive advantage for the organization. It shows that Data mining tools perform market analysis by clearing the business data, enhancing customer knowledge, enhanced marketing strategies and increasing profits.
This paper reveals how to gain competitive edge and enhance business profitability and efficiency of business organization world wide are taking help of different data mining tool. Data mining fill the growing gap between large storage systems and powerful retrieval systems and ability to analyse the information obtained. It helped in to contribute research by providing association techniques, techniques for on-line discovery, ensemble learning and distributed data sets. Large number of marketing analysis techniques are related to sales forecasting which can be performed by the data mining tools.
It shows if tools are used by marketing manages effectively then it provides edge to then business.
Introduction
Data Mining is the technique of extracting meaningful information from large database i.e. Data warehouse. It is process of discovering useful information, possible unexpected patterns in data that are valid, novel, useful and understandable. It help in providing the enterprise with the intelligence which help the companies better companies better comprehend their customer.
∗Astt. Professor and Controller of Examination, Delhi School of Professional Studies and Research.
A marketing manager there is no larger satisfied which simple listing of marketing contacts, but wants each and every detailed information about customer and market segmentation. Data mining has specific processes which help to define the process and then further help to create database for data mining further goes for exploring the database and for creating data mining model, evaluating the data mining model and deploying it by this computer process data mining tools helps to analysis the market and provide relevant information to manager.
Data mining process is gaining a lot of importance because of its vast applicability. It is being used increasingly in various business applications for understanding and the predicting valuable information like buying behaviours of the customer, selection of best profitable market to launch new products.
Data mining involves many different algorithm to accomplish different tasks which examine the data and determine a model that is closest to characteristics of data being examined data mining models can have their basic
components:-(a) Model-which define a model to fit for the data.
(b) Preference-which shows that what criteria we will use to fit one model over another.
(c) Search-which represent what technique we are using to search the data.
Architecture for Data
Mining-Data Ming architecture includes various processes which includes various feedbacks loops and reversing of earlier steps. Input is provided by some query from the data warehouse, transformation is applied and assimilated output is collected.
Architecture is divided into four different components as follows:
(1) Select (2) Transform (3) Mine (4) Assimilate
This architecture firstly extracts, transform and load the transaction data onto the data warehouse further it stores and manage the data in multidimensional database system using on line analytical processing which give the specific model for navigating the data warehouse. It gives the data access to business analyst as extracted knowledge and analyzed the data by using software and presents it in graphical form.
Market Analysis
Data Mining is emerging as a, new trend in the phase of Information Technology as a tool for knowledge Discovery. In this section we will discuss various operational area of the Market Analyses i.e. Market Basket Analysis, Analysing the customer, Web Marketing, Fraud detection etc. to provide the competitive data to the managers. Main functions in organization performed by the data mining tool according to the hierarchy of the organization from bottom to up.
(1) Improved and filtered data and removed unwanted figures.
(2) Providing key customer characteristics and profiles of customer along with superior customer knowledge.
(3) Finding Marketing Mix and better Market Segmentation with enhanced marketing skills.
(4) Help to retain the higher customer ratio along with the maximum sales volume along with reduced costs and maximization of profits.
Market analyses is a document of investigation of Market that is used to inform a firm’s planning activities like inventory, purchase, expansion etc and many other aspects of a company.
A market analysis is an important area in every business organization’s activities. Business organizations need to constantly analyse their market share to keep control over the changing business fortune.
Following are the some area where data mining is used by business organization for marketing analyses.
(A) Market Basket Analyses
Market Basket Analysis is form that suits the application of affinity rules to analyses customer purchase. It is based on the idea that if you buy a product once, you will more or less likely to purchase one more additional items. The set of items a customer buys is referred to as an item-set and market basket analysis seeks to find relationship between purchases
As a first step Market Basket Analyses can be used in deciding the location and promotion of goods. Organization always try to increase to sales of their less popular product to increase the overall sales figure .Using Market Basket analyses business organization or retailers can identify the fast selling and low selling products. Data mining tools with their scientific based calculation techniques come useful in such cases.
Data mining tools predict about the composition of popular product groups in systematic way. It has following
processes:-(a) Its first process is to collect all information about the product intensively.
(b) It differentiates the product in manner of the high selling one and low selling one.
(c) Various parameters have been characterized for the grouping of products with each other depending on the product characteristics & grouping requirements.
(d) Selected parameters are provided with input values based on customer preferences &
product sales analysis.
(e) Analyses the data mining results to divide the products into groups.
So, it provided better market analysis result as it is based on mathematical calculations.
(B) Web Marketing
The ratio of web marketing is rapidly gaining the momentum as hits are increasing on day to day basis by the customer on the internet it becomes challenge for the organization to plan efficient web marketing. As businesses are growing worldwide with large internet marketing potential so every organization needs to know everything about web marketing and should give through study to the marketing. This not only needs to be explanatory but also need to be equipped with more informative data which help to know market better in quantitative & qualitative way for this purpose data mining is a way important tool. It helps to find flows in the website of the organization. Data Mining tools helps in web marketing by various means like it helps to capture the result of web market research. It helps to know various Internet sales drives for the organization provide with the data of increase & satisfied customer. It also helps to match the performance of web business with other companies.
So, These Data mining tools helps to identify the areas of marketing which does not fulfill customer requirement and measure the performances of web marketing.
(C) Selections of Best Profitable Market to Lunch New Products
Data mining tool help in finding the market segmentation & profitable markets for new products by intensive calculation. Market segmentation is done with the method known as clustering which use software to analyses the data and identify the naturally occurring clusters of behavior which then form the basis of segmentation.
To ensure the profitability the organization tries to analyze acceptability of the product in the new regions before investing money. Data mining tool not only select the market but also quick enough to make fast changes in the criteria of the selection when the environment of the market changes. Data mining tools first identify the market segments containing customers or prospects with high profit potential and second are to build and execute campaign. It searches mountains of data to find patterns that are good predictors of purchasing of behavior. It represents the results in the forms of bar charts, graphs and histogram which help to make better marketing decisions.
(D) Customer Profiling
Data mining can play the lead role in maintaining the profits of the customer. It can find different patterns from the customer data warehouse that can be applied to a prospect database so that customer acquisition can be appropriately targeted by this it assist marketing department helps in targeting new prospects. Data mining tool helps to capture customer’s information that, What are the mayor demographic attributes of the customer? How do they spend money? Why should they purchase your goods? What kind of products they are including? Data mining helps to define better targeting strategy, generate higher response rates, grows base of the customer, improve market area. It helps to predict the behavior of the customer and also to predict their behavior and predict strategically according to the conditions.
(E) Analysing the Competitors
To have the edge on the competitors and to have larger base of the customer, every business organization tries to collect as much data about their competitors and convert that data into knowledge. So Business organizations need tools to convert data into knowledge and to analyze the advantages and disadvantages’ of the competitors. Data mining helps to focus on the specific reasons for the growth of the competitors. Data mining with the help of the summarization maps data into subsets with associated simple descriptions. As this is a task associated with the real world so, applications can be seen as predicting future data states based on past and current data.
Data mining tools with analytical approval helps to make use of valuable information to make strategic policy.
(F) Performance Analysis of Sales Territories
Data mining tools like regression and time series analysis helps to analyse the performance of various outlets of the business organization and there sales territories. It helps to know what kind of output these are providing and for what they are capable of. Each outlet is different on the basis of geographical boundaries so it difficult to measure the performance with the similar criteria. So, separate analysis of each has to be performed but this is again time consuming process. With the help of data mining tools it helps the managers to have effective control over performance which can be based on the regional characteristics.
Data mining tools consider various characteristics like sales figures customer feedback and markets shares as input and analyse accordingly. Data mining tool consider only that portion from the database which is related to the performance of the outlet.
Data mining tools also helps in Market Intelligence Management which clean data to removed unwanted information and provide the data in meaningful form. Data mining tools display mining results of complex relationship between product and sales in the form graph and figures.
Innovative sales techniques of data mining used to further increase the sales. It helps in identifying high selling products and effectively marketing them. With the help of output by data mining tool managers are unable to take their own decisions as it provides proper understanding of the data.
(G) Fraud Detection and Prediction
Its one of the other application of data mining which helps to predict and detect the fraud. This type of application is the great help to the business organization dealing which credit card, stocks, telecommunication, government agencies etc. With the help of data mining tools manager can catch the fraudulent transactions and contain damage. It is used by the financial institution to predict the performance of stocks on short and long term basis.
Data mining tools helps to check the fraud transactions and checking the authorized login conditions. It brings the data of appropriate user and conditions. It supports data with better security measures. As more and more data is available, misuse of it also grows. So challenge is also to maintain the integrity of the customers and the data.
Conclusion
As we have studied that Data mining is emerging as a new tool to provide its expertise knowledge in various area of Market Analysis. It has important applications to serve in various area of Science, engineering, healthcare, business, retails and education. It has base on research done in past few decades in various varsity of life and also depends hugely on the recent technological development explosion in various demand with specific knowledge and systems to analyze.
As data mining enables automatic detection of patterns and guides all to have better knowledge of customer psychology.
Using various tools and applications of data mining organization can effectively increase the profitability of the organization. It also helps in increase database of customer and appropriate knowledge about them. It has various applications to detect the fraud and improve risk management schemes. Patterns uncovered by the data mining technology help organizations make better and timelier decision.
Another issue covered that as large amount of data is available about the market, customer and competitors it is always challenge to develop privacy and security models and protocols appropriate for data mining to ensure the integrity and also set the rules for data mining tools to be develop in coming generation.
With all these things business benefit to have be proven through the integration of data mining applications to the wide audience of users.
So, Data mining plays important role in managing business organization and providing them knowledge by performing the analysis for them. For ensuring data mining technique privacy and security models must be and implemented because when the data is collected it involves individual people, the issue concerning privacy legality and ethics crop up.
References
Data mining : concepts and techniques by Jiawei Han and Micheline kamber Data Mining – Introductory and Advanced Topics by Margaret H. Dunham
Data Mining –Typical Data Mining process for Predictive Modeling by BPB Publications Fayyad et al. 1996
http://www.brandrepublic.com
http://en.wikipedia.org/wiki/Web_mining
META Group Application Development Strategies: "Data Mining for Data Warehouses:
Uncovering Hidden Patterns.", 7/13/95 .
Gartner Group Advanced Technologies and Applications Research Note, 2/1/95.
Gartner Group High Performance Computing Research Note, 1/31/95.
http://insight.nau.edu
http://www.anderson.ucla.edu http://www2.cs.uregina.ca/
http://www.rgrossman.com
http://blog.themarketinganalysts.com