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As by profession, being a Market Research Analyst, came across a interesting Data Mining technique, called as Market Basket Analysis. It is nothing but a type of If – then Data Mining Technique, in simple world, “Modeling technique based upon the school of thought that if you buy a certain group of items, you are more or less likely to buy another group of items” Lets understand the same with the help of a simple Beer Bar Example.

If you are in an Bar and you buy a Beer and don’t buy a bar meal, you are more likely to buy Potato Chips at the same time than somebody who didn’t buy beer. Here the Beer bought by you is known as the ITEM SET and bar Meal is Known as a Support for the Confidence (Chips)

Typically the relationship in the Market Basket Analysis will be in the form of a rule:

IF {beer, no bar meal} THEN {crisps}.

In retailing, most purchases are bought on impulse. Market basket analysis gives clues as to what a customer might have bought if the idea had occurred to them.

As a first step, therefore, market basket analysis can be used in deciding the location and promotion of goods inside a store. If, as has been observed, purchasers of Barbie dolls have are more likely to buy candy, then high-margin candy can be placed near to the Barbie doll display. Customers who would have bought candy with their Barbie dolls had they thought of it will now be suitably tempted.

But this is only the first level of analysis. Differential market basket analysis can find interesting results and can also eliminate the problem of a potentially high volume of trivial results.

In differential analysis, we compare results between different stores, between customers in different demographic groups, between different days of the week, different seasons of the year, etc.

Hoping this would help you all understand the buying habits of the customers and sell your product more effective way, hence forth.

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