Data Mining

and
Predictive Modelling
(CSET228)
Lecture 1: Introduction to Data Mining, Purposes, and Procedures

Dr. Madhuri Gupta

SCSET
madhuri.gupta@bennett.edu.in
 Components Percentage
Mid-Term 15
End-Term 35
Tentative
Evaluation Project 15
Components
MOOC 5
Lab Continuous Evaluation 20
End Term Lab Examination 10

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 Data mining is the process of discovering
interesting patterns and knowledge from
large amounts of data.

Data The data sources include databases, data

warehouses, the web, other information
repositories, or data that are streamed into
Minin the system dynamically.

g It is one of the steps in the knowledge

discovery process, but the essential one
because it uncovers hidden patterns for
evaluation.

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 To identify the insights and visions of the data.

Purpose of To analyze the data and then covert that data into
meaningful information, which helps the business to
take accurate and better decisions in an organization.
Data Helps to develop smart market decision, run accurate
Mining campaigns, make prediction and more.

Analyze customer behaviors and their insights that

leads to great success and data-driven business.

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 Data Mining
Process
Requirement Gathering

Data exploration

Data preparations

Modeling

Evaluation

Deployment

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 Application
s
Banking: Loan/Credit card approval

• Predict good customers based on old customers

Customer relationship management

• Identify those who are likely to leave for a competitor

Targeted marketing

• Identify likely responders to promotions

Fraud detection: telecommunications, financial transactions

• From an online stream of event identify fraudulent events

Manufacturing and production

• Automatically adjust knobs when process parameter changes

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 Application
s
Medicine: disease outcome, effectiveness of treatments

• Analyze patient disease history: find relationship between diseases

Molecular / Pharmaceutical: identify new drug

Scientific data analysis

• Identify new galaxies by search for sub clusters

Web site/store design and promotion

• Find affinity of visitor to pages and modify layout

Manufacturing and production

• Automatically adjust knobs when process parameter changes

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 Basic
Operations

Predictive Descriptive
Regression Clustering/similarity matching
Classification Association rules and
Collaborative variants Deviation detection
Filtering

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 Classificatio
n
• Given old data about customers and payments, predict new
applicant’s loan eligibility.

Previous customers Classifier Decision rules

Salary > 5 L
Age Good/
Salary Prof. = Exec bad
Profession
Location
Customer
type New applicant’s data

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 Clustering or Unsupervised
Learning
Unsupervised learning when old data with class labels not available e.g., when
introducing a new product.

Group/ cluster existing customers based on time series of payment history

such
that similar customers in same cluster.

Key requirement: Need a good measure of similarity between instances.

Identify micro-markets and develop policies for each.

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 Applications (Unsupervised
Learning)
Customer segmentation e.g., for targeted marketing
• Group/cluster existing customers based on time series of payment history such that
similar customers in same cluster.

Collaborative filtering

• Group based common items purchased

Text clustering

Compression

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 Association
Rules
Given set T of group of items

Example: set of item sets purchased

Goal: find all rules on item sets of the form ab such that

Example: Milk  bread

Purchase of product A  service B

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 Application
Areas
Industry Application
Finance Credit Card Analysis
Telecommunicatio Claims, Fraud Analysis
n Transport Call record analysis
Consumer goods Logistic management
Data Service providers Promotion Analysis
Utilities Value added data
Power usage analysis

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Thank
You