Market Basket analysis is a data mining technique that will analyze the pattern of the occurrence. It will determine the strength of the link between the purchases. It will leverage the ways recognized in any retail setting to understand the customer’s behavior by identifying the relationship between atoms bought by them.
In simple words, Market Basket analysis will help the retailers to know about the products that are frequently bought together. This will help them keep those items available all the time in the inventory. This process of collecting information about the frequently bought will help to understand the correlation between items in huge relational and transactional data sets.
It also helps in decision-making processes related to catalog design, consumer shopping analytics, and cross-marketing. Let us consider one example of buying a product constantly and another that goes with it. If people will buy Bread, it is evident that they may also purchase jam with it.
This relationship is depicted as a conditional algorithm. Marketing basket analysis Will help us understand the relationship between items. And also, and how helpful it would be to change our decisions based on the research.
What Terminologies are used in Market Basket Analysis?
- Support Count: It is the frequency of a specific item set appearing in the transaction database. For example, if the cheese has a support count of 20 out of 200 transactions, the probability is 0.1 or 20/200.
- Antecedent: The items set within the data are referred to as antecedents.
- Confidence: This refers to the conditional probability that will represent which items can be purchased together. As we have seen in the example above, this will find applications in the product placement strategy intending to increase profitability. Therefore, retailers can improve overall sales and revenue purchases.
In conclusion, Market Basket analysis in data mining will help derive customer insights to upscale their brand performance. Many companies will use just technique smartly and make millions of dollars by playing with the minds of their customers. It is considered one of the most effective ways of marketing or improving yourself without putting extra effort into the work.
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