Data mining is an important tool in business environment and its effective running. The process is aided by a computer and aims to dig out and analyze specified information from huge sets of data. The name is quite self-explanatory though. This data is used to predict the future trends, observe past behavior and determine why the current situation is the way it is. Owing to the computer's fast pace and precise calculations the data mining tool proves to be a very helpful one in making business future decisions, planning the business overall strategy and understanding relation between various factors that may affect the business. The calculations otherwise will be too complicated and may require months of human effort to be done.
It is not a very old concept rather it has been introduced recently but has gained popularity because of its effective and widespread application. Different businesses want to use it for knowing the trends, patterns and relations between various sets of information and then use this extracted data to help improve their growth and sales. They can also predict customer loyalty in an exact figure and aid in making better strategic decisions and promotional campaigns. This tool will help the business in market segmentation which will enable the company to know the shared characteristics of people who buy their products on a regular basis. It also helps in predicting which of these customers will stay loyal to the business and how many will switch to another seller. The tool has a wide range and can carry out fraud detection, market basket analysis, trend changes, direct marketing and interactive marketing. Interactive marketing is the kind of promotion that predicts what different users look for in different products. The tool works on the principle of law of averages; it uses traditional query tools and methods to analyze a certain set of data. The results are tested against various situations before a final outcome is delivered.
The data mining tool is yet to grow as it has been introduced recently but businesses and companies all around the globe are already relying on it to use historical data for their betterment. Industries like aerospace, finance, medical care; manufacturing, retail and finance have already adopted the tool for their research methods. The tool uses pattern identifying technology and highlights results that will otherwise not be visible and would require ages to be sorted out.