ITE2006 - DATA MINING TECHNIQUES

Dr.B.Valarmathi

28-02-2022
Associate Professor (Senior),
Department of Software and Systems Engineering,
School of Information Technology and Engineering

(B. Valarmathi)
ITE2006 - DATA MINING TECHNIQUES
VIT University, Vellore.
Cabin No. SJT 611F
valarmathi.b@vit.ac.in

1 B.Tech. (Information Technology) Programme

Winter Semester 2021 - 2022
 28-02-2022
Module 4: Mining Frequent

(B. Valarmathi)
ITE2006 - DATA MINING TECHNIQUES
Patterns, Associations and
Correlations

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Module 4: Mining Frequent
Patterns, Associations and
Correlations

28-02-2022
 Market Basket Analysis

(B. Valarmathi)
ITE2006 - DATA MINING TECHNIQUES
 Frequent Item Set Mining methods
 Apriori algorithm
 Generating Association Rules
 A Pattern Growth Approach
 Association Analysis to Correlation Analysis

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 ITE2006 - DATA MINING TECHNIQUES
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4.1 Market Basket
Analysis
4.1 Market Basket Analysis
Introduction to Market Basket Analysis

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What Is Market Basket Analysis ?
Definition of Market Basket Analysis

(B. Valarmathi)
ITE2006 - DATA MINING TECHNIQUES
Market Basket Analysis – Example
Applications of Market Basket Analysis
Limitations Market Basket Analysis
Benefits of Market Basket Analysis

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Introduction to Market Basket
Analysis

 Used to analyze the customer purchasing

behavior.

 Helps in increasing the sales and maintain

inventory by focusing on the point of sale
transaction data.

 Given a dataset, the Apriori Algorithm trains and

identifies product baskets and product association
rules
 What Is Market Basket Analysis ?

 Frequent item-set mining

 To find how items purchased by customers are

related

 Process analyzes customer buying habits by finding

associations between the different items that
customers place in their “shopping baskets”.

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 Contd…

 Help retailers develop marketing strategies by gaining

insight into which items are frequently purchased
together by customers.

 (e.g.) if customers are buying milk, how likely are

they to also buy bread (and what kind of bread) on
the same trip to the supermarket?

 Such information can lead to increased sales by

helping retailers do selective marketing and plan their
shelf space

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Contd…

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 Definition of Market Basket
Analysis

 Market Basket Analysis (Association Analysis) is a

mathematical modeling technique based upon the
theory that if you buy a certain group of items,
you are likely to buy another group of items.
Market Basket Analysis - Example

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Transaction database:
Attributes converted to binary flags
TID Products TID A B C D E
1 A, B, E 1 1 1 0 0 1
2 B, D 2 0 1 0 1 0
3 B, C 3 0 1 1 0 0
4 A, B, D 4 1 1 0 1 0
5 A, C 5 1 0 1 0 0
6 B, C 6 0 1 1 0 0
7 A, C 7 1 0 1 0 0
8 A, B, C, E 8 1 1 1 0 1
9 A, B, C 9 1 1 1 0 0

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Contd….

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Contd…

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 Contd…
 INPUT: list of purchases by purchaser
 do not have names

 identify purchase patterns

 what items tend to be purchased together
 obvious: steak-potatoes; beer-pretzels

 what items are purchased sequentially

 obvious: house-furniture; car-tires

 what items tend to be purchased by season

 Contd…

 Categorize customer purchase behavior

 identify actionable information

 purchase profiles
 profitability of each purchase profile
 use for marketing
 layout or catalogs

 select products for promotion

 space allocation, product placement

 Applications of Market Basket
Analysis

 Retail outlets

 Telecommunications

 Banks

 Insurance
 link analysis for fraud

 Medical
 symptom analysis
Limitations Market Basket Analysis

 LIMITATIONS
 takes over 18 months to implement
 market basket analysis only identifies hypotheses,
which need to be tested
 neural network, regression, decision tree analyses

 measurement of impact needed

 difficult to identify product groupings
 complexity grows exponentially
Benefits of Market Basket Analysis

 Benefits:
 simple computations
 can be undirected (don’t have to have hypotheses
before analysis)
 different data forms can be analyzed
 selection of promotions, merchandising strategy

 sensitive to price: Italian entrees, pizza, pies, Oriental

entrees, orange juice
 uncover consumer spending patterns
 correlations: orange juice & waffles
 joint promotional opportunities
Summary
 Introduction to Market Basket Analysis
 What Is Market Basket Analysis ?

 Definition of Market Basket Analysis

(B. Valarmathi)
ITE2006 - DATA MINING TECHNIQUES
 Market Basket Analysis – Example

 Applications of Market Basket Analysis

 Limitations Market Basket Analysis

 Benefits of Market Basket Analysis

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Thank you!