By Kardi Teknomo, PhD .

Market Basket Analysis

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Applications of Market Basket Analysis

Once you get association rules, you can use this new knowledge for many things in science and business. Here are examples of few ideas for business

Cross selling : offer the associated items when customer buy any items from your store

Product placement : items that are associated (such as bread and butter, or tissue and cold medicine, potato chip and beer) can be put near to each other. If the customers see them, it has higher probability that they will purchase them together.

Affinity promotion : design the promotional events based on associated products.

The fact that both independent and dependent variables of Market Basket Analysis are nominal (categorical) data type makes this method very useful to analyze questionnaire data.

Fraud detection : based on credit card usage data, we may be possible to detect certain purchase behavior that can be associated with fraud.

Customer behavior : associating purchase with demographic, and socio economic data (such as age, gender and preference) may produce very useful results for marketing.

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