What is Data Mining? Well, it can be defined as the process of getting hidden information from the piles of databases for analysis purposes. Data Mining is also known as Knowledge Discovery in Databases (KDD). It is nothing but the extraction of data from large databases for some specialized work.
Data Mining is largely used in several applications such as understanding consumer research marketing, product analysis, demand and supply analysis, e-commerce, investment trend in stocks & real estates, telecommunications and so on. Data Mining is based on a mathematical algorithm and analytical skills to drive the desired results from the huge database collection.
Data Mining has great importance in today's highly competitive business environment. A new concept of Business Intelligence data mining has evolved now, which is widely used by leading corporate houses to stay ahead of their competitors. Business Intelligence (BI) can help in providing the latest information and used for competition analysis, market research, economic trends, consumer behavior, industry research, geographical information analysis and so on. Business Intelligence Data Mining helps in decision-making.
Data Mining applications are widely used in direct marketing, health industry, e-commerce, customer relationship management (CRM), FMCG industry, telecommunication industry, and the financial sector. Data mining is available in various forms like text mining, web mining, audio & video data mining, pictorial data mining, relational databases, and social networks data mining.
Today, businesses are collecting more information that is available in a variety of formats. This includes operational data, sales reports, customer data, inventory lists, forecast data, etc. In order to effectively manage and grow the business, all of the data gathered requires effective management and analysis. One such way of controlling the vast amount of information flow is a process called Data Mining.
Data mining is the process of taking a large amount of data and analyzing it from a variety of angles and putting into a format that makes it useful information to help a business improve operations, reduce costs, boost revenue, and make better business decisions. Today, effective data mining software has developed to help a business to collect and analyze useful information.
This process allows a business to collect data from a variety of sources, analyze the data using software, load the information into a database, store the information, and provide analyzed data in a useful format such as a report, table, or graph. As it relates to business analysis and business forecasting, the information analyzed is classified to determine important patterns and relationships. The idea is to identify relationships, patterns, and correlations from a broad number of different angles from a large database. These kinds of software and techniques allow a business easy access to a much simpler process which makes it more lucrative.
Data mining works allow a company to use the information to maintain competitiveness in a highly competitive business world. For instance, a company may be collecting a large volume of information from various regions of the country such as a consumer national survey. The software can compile the mined data, categorize it, and analyze it, to reveal a host of useful information that a marketer can use for marketing strategies. The outcome of the process should be an effective business analysis that allows a company to fully understand the information in order to make accurate business decisions that contribute to the success of the business. An example of the effective use of data mining is acquiring a large amount of grocery store scanner data and analyzing it for market research. Data mining software allows for statistical analysis, data processing, and categorization, which all helps achieve accurate results.
It is mostly used by businesses with a strong emphasis on consumer information such as shopping habits, financial analysis, marketing assessments etc. It allows a business to determine key factors such as demographics, product positioning, competition, pricing, customer satisfaction, sales, and business expenditures. The result is the business is able to streamline its operations, develop effective marketing plans, and generate more sales. The overall impact is an increase in revenue and increased profitability.
For retailers, this process allows them to use sales transactions to develop targeted marketing campaigns based on their customer's shopping habits. Today, mining applications and software are available on all system sizes and platforms. For instance, the more information that has to be gathered and processed, the bigger the database. As well, the type of software business will use depends on how complicated the data mining project. The more multifaceted the queries and the more queries performed, the more powerful system will be needed.
When a business harnesses the power of this system, they are able to gain important knowledge that will help them not only develop effective marketing strategies leading to better business decisions, but it will help identify future trends in their particular industry. Data mining has become an essential tool to help businesses gain a competitive edge.