datamining

D a t a M i n i n g Data Mining Hanu Education and Research Dept Infosys Technologies Limited, Mangalore D a t a M i n i n g Overview of Data Mining D a t a M i n i n g Problem • You are a marketing manager for a cellular telephone company • Problem: Churn is too high • Turnover (after contract expires) is 40% • Customers receive a free phone (cost: $125) with contract • You pay a sales commission of $250 per contract • Giving a new phone to everyone whose contract is expiring is very expensive (as well as wasteful) • Bringing back a customer after quitting is both difficult and expensive D a t a M i n i n g Solution • Three months before a contract expires, predict which customers will leave • If you want to keep a customer that is predicted to churn, offer them a new phone • The ones that are not predicted to churn need no attention • If you don’t want to keep the customer, do nothing How can you predict future behavior? • Parrot Cards? • Magic Ball? • Data Mining? D a t a M i n i n g Definition • Data Mining is the process of discovering meaningful new corelations, patterns and trends by sifting through large amounts of data stored in repositories and by using pattern recognition technologies as well as statistical and mathematical techniques -The Gartner Group • In Simple words - The automated extraction of predictive information from large databases D a t a M i n i n g Goal of Data mining • Simplification and automation of the overall statistical process • Replace statistician D a t a M i n i n g Evolution of Data usage Technology • 1960s - Data Collection What was my total revenue in the last five years? • 1980s - Relational Database What were unit sales in California last March? • 1990s - OLAP What were unit sales in California last March? Drill down to San Jose D a t a M i n i n g Data Mining • Emerging Today What’s likely to happen to San Jose unit sales next month? Why? D a t a M i n i n g Functionality Chart D a t a M i n i n g Architecture of Data Mining