Market Basket Analysis Flashcards, test questions and answers
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What is Market Basket Analysis?
Market Basket Analysis (MBA) is a data mining technique used to analyze and identify relationships between items in large datasets. It is often used by businesses to understand customer behavior and develop marketing strategies. MBA looks at the frequency of items purchased together within a given dataset, typically from retail sales or transactional databases, to determine correlations that can be used for various purposes such as understanding what products are frequently bought together, revealing patterns that might not otherwise be seen, identifying potential cross-selling opportunities, predicting future purchases made by customers, and more.The primary goal of Market Basket Analysis is to look for associations among different items in order to better understand consumer behavior. A popular example of this type of analysis would be looking at what products customers tend to purchase together in supermarkets. For instance, if customers typically buy beer and chips when they shop together then it could indicate that these two items should always be placed near each other on store shelves so as to encourage further purchasing. Additionally, marketers may use the insights gained from these analyses in order to create special offers tailored towards consumers who purchase certain combinations of products or services regularly. In terms of implementation there are several methods available for performing market basket analysis including using specialized software programs designed specifically for this purpose or making use of existing statistical packages like SAS Enterprise Miner which allow users to run complex queries across large datasets with relative ease. Typically however most organizations choose an off-the-shelf solution as it makes sense both financially and logistically due the fact that setting up such systems from scratch can require significant upfront investment before any real results are generated. Overall Market Basket Analysis has become increasingly popular over recent years due its ability provide valuable insights into customer behavior without requiring costly investments or complicated programming skillsets allowing companies to gain invaluable knowledge about their target audiences quickly and effectively while also helping them remain competitive in today’s ever changing marketplace environment.