What makes data mining an important business tool? What types of information does data mining produce? In what type of circumstance would you advise a company to use data mining?

Question

What will be an ideal response?

Answer 1

Data mining is one of the data analysis tools that helps users make better business decisions and is one of the key tools of business intelligence. Data mining allows users to analyze large amounts of data and find hidden relationships between data that otherwise would not be discovered. For example, data mining might find that a customer that buys product X is ten times more likely to buy product Y than other customers.
Data mining finds information such as:
• Associations or occurrences that are linked to a single event.
• Sequences, events that are linked over time.
• Classification, patterns that describe the group to which an item belongs, found by examining existing items that have been classified and by inferring a set of rules.
• Clusters, unclassified but related groups.
I would advise a company to use data mining when they are looking for new products and services, or when they are looking for new marketing techniques or new markets. Data mining might also be helpful when trying to analyze unanticipated problems with sales whose causes are difficult to identify.