Essay On Market Basket Analysis
Market Basket Analysis is one of the most common and useful types of data analysis for marketing and retailing. The purpose of market basket analysis is to determine what products customers purchase together. It takes its name from the idea of customers throwing all their purchases into a shopping cart (a "market basket") during grocery shopping. Knowing what products people purchase as a group can be very helpful to a retailer. A store could use this information to place products frequently sold together into the same area (or the different areas), while a catalog or World Wide Web merchant could use it to determine the layout of their catalog and order form. Direct marketers could use the basket analysis results to determine what new …show more content…
Typically the relationship will be in the form of a rule:
IF {beer, no bar meal} THEN {crisps}.
The probability that a customer will buy beer without a bar meal (i.e. the antecedent is true) is referred to as the support for the rule. The conditional probability that a customer will purchase crisps is referred to as the confidence.
The algorithms for performing market basket analysis are fairly straightforward ("Berry and Linhoff" is a reasonable introductory resource for this). The complexities mainly arise in exploiting taxonomies, avoiding combinatorial explosions (a supermarket may stock 10,000 or more line items), and dealing with the large amounts of transaction data that may be available.
A major difficulty is that a large number of the rules found may be trivial for anyone familiar with the business. Although the volume of data has been reduced, we are still asking the user to find a needle in a haystack. Requiring rules to have a high minimum support level and a high confidence level risks missing any exploitable result we might have found. One partial solution to this problem is differential market basket analysis, as described
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