Chapter 2: What Is Data Mining?

Chapter 2: What Is Data Mining?

It?s about Predators and Patterns

Data mining is a ?hot? new technology about one of the oldest processes of human endeavor: pattern recognition . Our hairy ancestors relied on their ability to recognize the patterns of predators, paths, prey, and the seasons to survive. Today, companies inundated with data that is daily generated with every customer transaction, web hit, bar scan, credit card swipe, and phone call are faced with the same challenge of recognizing the patterns of opportunity and threat to their survival. Throw in the real-time, hyper-competitive, networked business environment that is the Web, and you will see why the ability to decipher these patterns is fast becoming a critical factor to a company.

For example, let?s say you are a retailer of hot pepper sauces on the Web. A data mining tool can discover the following rule?which is actually an important ratio?or insight about your customers? identity and purchasing patterns:

Visitor Sub-Domain is AOL

AND

Visitor Gender is MALE

AND

Visitor Age is 37?42

AND

Visitor is from ZIP Code ?High Rise Renter? 78?85%

THEN

Visitor Will Purchase Score = 81%

You can benefit from data mining even if you don?t sell habaneros online. Whether you provide a service or a product, data mining can assist you in discovering previously unknown patterns or features about your website visitor, your online customers, and your relationship with them. By recognizing who your customers are you can begin to establish a stronger...

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Chapter 2: What Is Data Mining?

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