Data Mining

AAA

DEFINITION of 'Data Mining'

A process used by companies to turn raw data into useful information. By using software to look for patterns in large batches of data, businesses can learn more about their customers and develop more effective marketing strategies as well as increase sales and decrease costs. Data mining depends on effective data collection and warehousing as well as computer processing.

INVESTOPEDIA EXPLAINS 'Data Mining'

Grocery stores are well-known users of data mining techniques. Many supermarkets offer free loyalty cards to customers that give them access to reduced prices not available to non-members. The cards make it easy for stores to track who is buying what, when they are buying it, and at what price. The stores can then use this data, after analyzing it, for multiple purposes, such as offering customers coupons that are targeted to their buying habits and deciding when to put items on sale and when to sell them at full price.


Data mining can be a cause for concern when only selected information, which is not representative of the overall sample group, is used to prove a certain hypothesis.

RELATED TERMS
  1. Barcode

    A graphical representation of a product's identifying information ...
  2. Data Warehousing

    The electronic storage of a large amount of information by a ...
  3. Data Smoothing

    The use of an algorithm to remove noise from a data set, allowing ...
  4. Certified Data Processor - CDP

    An information technology (IT) certification. The certificate ...
  5. Bias

    Biases are human tendencies that lead us to follow a particular ...
  6. Longitudinal Data

    The process of collecting sample observations from a larger population ...
Related Articles
  1. Consumer Spending As A Market Indicator
    Markets

    Consumer Spending As A Market Indicator

  2. Data Mining For Investors
    Active Trading

    Data Mining For Investors

  3. What Can an Investor Learn from DuckTales?
    Investing Basics

    What Can an Investor Learn from DuckTales?

  4. What is the average salary for an accountant?
    Personal Finance

    What is the average salary for an accountant?

Hot Definitions
  1. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  2. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  3. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  4. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  5. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  6. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
Trading Center