Market Basket Analysis :
Market Basket Analysis is a type of data mining technique that is used to identify the relationship between different products or services that are purchased together. This analysis is typically used by businesses to understand consumer behavior and make better business decisions, such as identifying new product opportunities or optimizing pricing strategies.
One example of market basket analysis is a grocery store using the technique to identify which items are frequently purchased together. For example, the analysis may show that customers who purchase bread are also likely to purchase milk and eggs. Based on this information, the grocery store can make strategic decisions, such as placing these items in close proximity to each other in the store, offering discounts for purchasing the items together, or promoting the items as a meal solution.
Another example of market basket analysis is an online retailer using the technique to identify which products are frequently purchased together. For example, the analysis may show that customers who purchase a certain brand of shoes are also likely to purchase a specific brand of socks. Based on this information, the retailer can make decisions such as displaying the sock brand on the shoe product page, offering a discount for purchasing the items together, or promoting the combination as a bundle.
Overall, market basket analysis allows businesses to gain valuable insights into consumer behavior and make data-driven decisions that can increase sales and improve customer satisfaction. By identifying the products or services that are commonly purchased together, businesses can create targeted marketing campaigns, optimize pricing strategies, and improve product placement to drive customer engagement and loyalty.