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What is Data Mining

By Exforsys | on July 27, 2006 |
Data Mining

Data mining is a system of searching through large amounts of data for patterns. It is a relatively new concept which is directly related to computer science. Despite this, it can be used with a number of older computer techniques such as pattern recognition and statistics.

The goal of data mining is to extract important information from data that was not previously known. Data mining is a technique that has a large number of applications in a wide variety of different fields. However, it is commonly used by businesses or organizations that need to recognize certain patterns or trends.

For example, the sales department of a company may use data mining to track the type of items a customer buys. As they begin observing the type of items the customer purchases, they may notice that the customer buys a large quantity of coffee on a regular basis. The data mining program will automatically make a connection between that specific customer and a certain brand of coffee.

The sales department can then use this information to launch a direct mail campaign which informs the customer of a sale that is being held for the brand of coffee they enjoy buying. Because they know that the customer likes a particular brand of coffee, it is highly likely that they will purchace large quantities of it because it is on sale.

In addition to this, the company can also market other products or services to the customer. Data mining is profitable in a situation like this because it allows the company to find out detailed information about their customer that would have been difficult to determine otherwise. Data mining can also be used to track behaviors within a system for a long period of time. For example, a large retail store chain may use data mining to analyze the type and number of items which are purchased over a five year period. The company may find that a certain brand of toothpaste and tooth brushes are purchased in large quantities.

Based on this information, the retail store chain could then proceed to take the toothpaste and tooth brushes and put them next to each other. This will allow their profits to greatly increase. The name for this sales method is Market Basket Analysis. The increasing popularity of parallel computing has made it possible to search through massive amounts of data without the need for a theoretical framework. One important factor of data mining is that it will often be used to analyze information from a variety of different perspectives. The important information that is gained from data mining can be used to increase profits or lower costs.

There are a number of software products that have been designed for those who wish to use data mining techniques. Once you’re able to search through large amounts of information, you will be able to analyze it in a large number of different ways. Once you’ve analyzed the information, you can make conclusions and decisions which are based on logic. While the term data mining is a new, the concept of searching through data for patterns is not. Many large companies have powerful computers that allows them to search through information to analyze reports over a given period of time.

What sets data mining apart from these older research methods is that data mining is a result of the advancement of computer processing power. In addition to this, they storage capabilities of contemporary computers have allowed data mining to be much more accurate than techniques that were used in the past. Because most data mining tools come in the form of software, the costs involved with searching and analyzing information have greatly dropped. For example, if a retail store noticed that a large number of their customers were purchasing alcoholic beverages on Thursday, this would tell them that the drinks are being purchased for the upcoming weekend. The company could use this information by selling the drinks at full price on Thursdays in order to increase their profits.



The primary disadvantage to data mining is that users may discover things which are based on chances instead of a direct connection. In order for data mining to be used effectively, the users must be able to tell the difference between chance and a direct correlation.

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Editorial Team at Exforsys is a team of IT Consulting and Training team led by Chandra Vennapoosa.

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