Understanding Market Basket Analysis
Market Basket Analysis basically refers to the analysis of customer buying
habits by finding association rules between different itemsets that customer
places in their basket. It is the earliest form of frequent pattern mining for
the association rules.
Terms to Understand
Frequent Patterns: The
patterns that appear frequently.
Frequent Itemset: The
set of item(eg milk and bread) that appear together frequently
Frequent Sequential
Pattern: The itemsets that appear together in a sequential pattern.
The frequent itemset
pattern is represented by the association rules.
Eg. Laptop => Mouse [support
5%, confidence = 50%]
The above association
rules says that the customer who buys laptop also buys mouse with 5% support
and 50% confidence. The measure of interestingness of any rule in based on the
support and confidence of the rule.
(Support 2%)
2% of all the transaction under analysis show that laptop and mouse are
purchased together.
(Confidence 50%)50%
of the customer who purchased laptop also purchased mouse.
Significance of Market Basket Analysis
Market Basket Analysis
is done to help business in decision making process. The major areas of
significance are:
1.
It helps in
gaining insights into the items that are frequently purchased together by the
customer.
2.
It helps in developing
marketing strategies.
3.
It helps in the
design of store layouts.
4.
It helps in
catalog design.
5.
It helps to
determine the items that are to be placed on sales.
6.
It helps in
customer shopping behavior analysis.
7.
It helps in
identifying the regular and valued customers.
