DATA MINING IN THE
CORPORATE WORLD
BY RYANN A. WARD
WHAT IS DATA MINING?
• The process of applying algorithms to large amounts of data to extract data patterns
• Used to enhance the predictive power of the business.
• Assists in future sales and marketing tactics.
• Used in business to strengthen customer-client relationship.
• Commonly used in fields such as:
•
Business
•
Finance
•
Science
•
Engineering
•
Education
DATA MINING IN FINANCE
• Common technique used by banks.
• Used to determine the risk held by loaning money:
•
Likelihood of client paying back loan.
•
Amount of interest to apply to loan.
•
Chance of financial gain.
• Detect fraudulent activity.
• Hopefully resulting in financial gain and stronger client relationships.
CORPORATE USE OF DATA MINING
• Information gathered by data mining aid in companies marketing strategy.
• Finds useful patterns within data pertaining to customer history.
• Predictability of the companies sales increases.
• Advertising and Promotions can be adjusted by region or sector of a company, to fit customer needs.
• Helps companies adjust for the future.
WAL-MART STORES INC.
• October 15, 2006, Wal-Mart signed a deal with Howard Draft of DraftFCB for $563 million.
• One of the largest pieces of business available that year.
• Draft had a strategy of sorting through their data bank to find behavioral data analysis.
• Previously used this method for companies such as Verizon Communications and The U.S. Postal Service
• Allowed Wal-Mart to adjust advertising and marketing in each store, daily.
Howard Draft
ONLINE COMMERCE
• Some companies exist solely online, such as Amazon.com
• These companies depend on data mining to help maintain strong customer relationship.
• Companies encourage people to use their website by:
•
Offering discounts to frequent customers
•
Offering benefits to members (ex. Amazon Prime)
•
Sending out promotional emails.
•
Save customer information to make use of the website more convenient.
•
Having a “Suggestion” list under other items while on the website.
PROS OF DATA MINING
Corporations:
Consumer:
• Creates stronger relationship with customer.
• Companies target their needs.
• Advertising determined by data mining patterns. • Easier access to accounts.
• Selective marketing for each store or branch.
• Benefits gained by being a repeat customer.
• Better Predictability of future events.
• Banks may become more willing to loan money.
CONS OF DATA MINING
Corporations:
Consumers:
• Gather useless data.
• Companies track your movements.
• Sorting threw irrelevant or useless patterns.
• Danger of company being hacked, losing personal
information.
• Predictions may be wrong and can result in failure.
• Using wrong strategy, suffering from financial loss
• Privacy does not exist.
• May be more of an annoyance than an attraction.
FINAL THOUGHTS
• Although, data mining is not a commonly known topic, we are surrounded by
it no matter where we go. Data mining is major tool used by companies across
the United States, and across the world, to help create stronger relationships
with customers and to help larger corporations gain more profit. Even though,
personal privacy may not be an option in this day in age, but the benefits of
data mining is apparent for both the corporations and the consumers. Data
mining is a very useful tool for major companies and helps to expand business
and create stronger relationships with customers.
BIBLIOGRAPHY
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2015).
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Relationship Management (3rd Edition). Hoboken, NJ, USA: Wiley Computer Publishing, 2011. Accessed
November 30, 2015. ProQuest ebrary.
• Han, Jiawei, Kamber, Micheline, and Pei, Jian. Data Mining : Concepts and Techniques : Concepts and
Techniques (3rd Edition). Saint Louis, MO, USA: Morgan Kaufmann, 2011. Accessed November 30, 2015.
ProQuest ebrary.
• Kiley, David. "MAD AVE'S MAN OF THE HOUR; Howard Draft won over Wal-Mart with a potent mix of
data-mining and creativity."Business Week, 2006., Academic OneFile, EBSCOhost (accessed December 1,
2015).
• Reyman, Jessica1. "User Data on the Social Web: Authorship, Agency, and Appropriation." College
English 75, no. 5 (May 2013): 513-533. Humanities Source, EBSCOhost (accessed December 2, 2015).
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November 30, 2015. ProQuest ebrary.