Data mining is a powerful technology with great potential. It focuses on information and collection of data. It reveals facts effectively. It is also known as knowledge discovery. It analyses the enormous set of data. It predicts behavior and future trends. It allows business to make the decision. It derives its name from various valuable information. It acquires sourcing to an immense amount of material. The principle of data minimizing has been used in many modern business tools like CRM.
What can Data Mining do?
It deals with gaining knowledge. It analyses technology by various aspects of information. It helps to develop smarter marketing strategies. Uses of data mining includes-
- Fraud detection- It identify which transaction to be most likely fraudulent
- Customer churn- It predicts which customer likely to leave the company.
- Direct marketing- It identify which prospects should be included in the mailing list. It obtains highest response rate.
- Interactive marketing- It predicts how each individual access a website.
- Market basket analysis- It analysis what product or services to buy.
- Trend analysis- It reveal the difference between the typical customers.
This technology generates the new business trends by-
Automated behaviors of trends- It automates the process of finding a predictive information. It handles and analyzes different data. Targeted marketing is a typical example of it. This target is most likely to analyze the return on investments. It uses data on past promotional mailing. It resolves to forecast bankruptcy.
Automated detection of before unknown realities –
It sweeps through a database and identifies hidden patterns. It identified unrelated products and are often buy it together. It detects fraudulent credit card transaction. It identifies anomalous data that could represent data entry.
Development of Data Mining –
Development defines existing tools of the computerized database. It stores data and provides the answer to business analyst. It verifies a discount with a series of queries. It uses to generate a hypothesis.
How does Data mining work?
It uses evolutionary algorithms. Evolutionary algorithms for data mining effort by generating a series of random rules. It works by trying to emulate natural evolution. It produces a rule that matches the data set. If rule matches, then it is considered to be valid. If it doesn’t match the data, then it has been discarded.
What are the applications of Data Mining?
It is applicable for following domain:
- For market analysis and managements
- For market analysis and Risk Management
- For detecting fraud
Data mining are also used in the area of customer retention, customer acquisition.
What are the tasks of data mining?
It deals with the patterns. Two functions exist in it
- Prediction and classification
1) Descriptive- It deals with the general properties of data. It includes mining of association and correlation. It also includes mining of clusters and frequent pattern.
2) Prediction and classification- It is a process of finding a model that describe the class. It uses the model to predict the class of objects. The derived databases on training data. The derived model can represent a Neutral network.