Data Mining


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.


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.

  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 ...
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