Data Mining

What is Data Mining
Finding that single piece of intelligence your business needs in the large data warehouse that you have builtup over a long period if time.
–Multiple disciplines: database, statistics, artificial intelligence

Why use Data Mining?

• User is searching for answers to questions he/she did not know to ask
• Data warehouse can tell the business where the interesting patterns, relationships, and “hot spots” are
• Find the “unknown answer”

What does Data Mining do?

• Explores your data
• Finds patterns
• Perform predictions

Data Mining use in Business

• Customer profiling
  - Identifying those subsets of customers that are most profitable to the business
• Targeting
  - Determining the characteristics of profitable customers who have been captured by competitors
• Market-basket analysis
  - Determining product purchases by consumers, which can be used for product positioning and for cross-selling

The Baseline Pyramid

KD: Knowledge Discovery ( No Hypothesis) <--Most Complex
Modeling Segmentation (Mild Hypothesis)
Multidimensional (Moderate Hypothesis )
Standard Queries (Strong Hypothesis) <--Least Complex

Data Storage

•Data Warehouse
–A large-scale data storage system designed to contain complete and clean data that can be accessed efficiently.
•Data Mart
–A database system used to extract a subset of data from a data warehouse so that it can be used for a data mining application
•Online analytic processing (OLAP)
–Tools for accessing databases with the intent of providing users with a multidimensional display of information.