Unit 4

Data Mining
Applications & Tools
 Benefits of Data Mining
They can use that information to improve business decision-making and
strategic planning through a combination of conventional data analysis
and predictive analytics.
Specific data mining benefits include the following:
• More effective marketing and sales. Data mining helps marketers better
understand customer behavior and preferences, which helps them create
targeted marketing and advertising campaigns. Similarly, sales teams can
use data mining results to improve lead conversion rates and sell
additional products and services to existing customers.
• Better customer service. Data mining helps companies identify potential
customer service issues more promptly and give contact center agents up-
to-date information to use in calls and online chats with customers.
• Improved SCM. Organizations can spot market trends and forecast
product demand more accurately, enabling them to better manage
inventories of goods and supplies. Supply chain managers can also use
information from data mining to optimize warehousing, distribution and
other logistics operations.
 Benefits of Data Mining
• Increased production uptime. Mining operational data from
sensors on manufacturing machines and other industrial
equipment supports predictive maintenance applications to
identify potential problems before they occur, helping to
avoid unscheduled downtime.
• Stronger risk management. Risk managers and business
executives can better assess financial, legal, cybersecurity and
other risks to a company and develop plans for managing
them.
• Lower costs. Data mining helps improve cost savings through
operational efficiencies in business processes and reduces
redundancy and waste in corporate spending.
Role of data mining for the Telecommunication Industry

The telecommunication industry has quickly evolved from providing local and
long-distance telephone services to providing several other
comprehensive communication services, such as fax, pager, cellular
phone, web messenger, images, e-mail, computer and Web data
transmission, and several data traffic.
The integration of telecommunication, computer network, the Internet, and
several other means of communication and computing is also underway.
Furthermore, with the deregulation of the telecommunication market in
several countries and the development of new computer and
communication technologies, the telecommunication industry is rapidly
expanding and hugely competitive.
This makes a huge demand for data mining in order to support understanding
the business involved, identify telecommunication designs, catch
fraudulent events, create better use of resources, and enhance the quality
of service.
The following are a few methods for which data mining can improve
telecommunication services −
• Multidimensional analysis of telecommunication data − Telecommunication
data are intrinsically multidimensional, with dimensions including calling-time,
duration, location of the caller, location of the callee, and type of call. The
multidimensional analysis of such data can be used to recognize and compare
the data traffic, system workload, resource management, customer group
behavior, and profit. For instance, analysts in the market can wish to regularly
view charts and graphs concerning calling source, destination, volume, and
time-of-day usage designs.
• Fraudulent pattern analysis and the identification of unusual patterns −
Fraudulent activity costs the telecommunication market thousands of dollars
per year. It is important to identify potentially fraudulent users and their
atypical usage patterns. It can detect attempts to gain fraudulent entry into
customer accounts.
• It can discover unusual patterns that may need special attention, such as busy-
hour frustrated call attempts, switch and route congestion patterns, and
periodic calls from automatic dial-out equipment (like fax machines) that have
been improperly programmed. Some patterns can be found by
multidimensional analysis, cluster analysis, and outlier analysis.
• Multidimensional association and sequential pattern analysis − The
discovery of association and sequential patterns in multidimensional
analysis can be used to promote telecommunication services.
• Mobile telecommunication services − Mobile telecommunication, Web
and data services, and mobile computing are becoming increasingly
integrated and common in our work and life. The feature of mobile
telecommunication data is its relations with spatiotemporal data.
Spatiotemporal data mining can become important for finding specific
designs.
• For instance, unusually busy mobile phone traffic at specific areas can
denote something abnormal happening in these areas. Furthermore, ease
of use is essential for enticing users to adopt new mobile services. Data
mining will play a major role in the design of adaptive solutions allowing
users to obtain useful data with relatively few keystrokes.
Role of data mining for the Retail Industry

• Retail data mining can help identify user buying behaviors, find user
shopping patterns and trends, enhance the quality of user service, achieve
better user retention and satisfaction, increase goods consumption ratios,
design more effective goods transportation and distribution policies, and
decrease the cost of business.

There are a few examples of data mining in the retail industry are as follows:
• Design and construction of data warehouses based on the benefits of
data mining − Because retail data cover a broad spectrum (such as sales,
customers, employees,goods transportation, consumption, and services),
there can be several methods to design a data warehouse for this market.
• Multidimensional analysis of sales, customers, products, time, and
region − The retail market needed timely data regarding customer
requirements, product sales, trends, and fashions, and the quality, cost,
profit, and service of commodities. It is essential to provide dynamic
multidimensional analysis and visualization tools, such as the construction
of sophisticated data cubes according to the requirement of data analysis.

• Analysis of the effectiveness of sales campaigns − The retail market

conducts sales campaigns using advertisements, coupons, and several
types of discounts and bonuses to promote products and attract users.
Careful analysis of the efficiency of sales campaigns can support improve
company profits.
• Improve Customer Service
Data mining can make the customer’s shopping experience more
personalized and efficient. Consumers who can’t find what they need
often get frustrated and turn to the competition. Retail data mining allows
you to push the right products when your customers want them.
• Churn Analysis
Customer churn, also called customer attrition, is a measure of customer
loss. Churn analysis involves analyzing past customer data like
demographics and transaction history. This will help you understand who
is leaving, why they are leaving, who is more likely to leave faster, and how
you can improve customer retention. The data analysis seeks to uncover
the cause of attrition.

• Elevate Target Marketing

Knowing your target customers is critical to improving sales. With data
mining and customer segmentation analysis, you’ll learn who your best
customers are and how you should tailor your marketing campaigns to
their needs and wants.
 Industry examples of data mining
• Retail. Online retailers mine customer data and internet
clickstream records to help them target marketing campaigns,
ads and promotional offers to individual shoppers. Data
mining and predictive modeling also power the
recommendation engines that suggest possible purchases to
website visitors, as well as inventory and SCM activities.

• Financial services. Banks and credit card companies use data

mining tools to build financial risk models, detect fraudulent
transactions, and vet loan and credit applications. Data mining
also plays a key role in marketing and identifying potential
upselling opportunities with existing customers.
 Industry examples of data mining
• Insurance. Insurers rely on data mining to aid in pricing insurance policies
and deciding whether to approve policy applications, as well as for risk
modeling and managing prospective customers.

• Manufacturing. Data mining applications for manufacturers include efforts

to improve uptime and operational efficiency in production plants, supply
chain performance and product safety.

• Entertainment. Streaming services analyze what users are watching or

listening to and make personalized recommendations based on their
viewing and listening habits. Likewise, individuals might data mine
software to learn more about it.
 Industry examples of data mining
• Healthcare. Data mining helps doctors diagnose medical
conditions, treat patients, and analyze X-rays and other
medical imaging results. Medical research also depends
heavily on data mining, machine learning and other forms of
analytics.
• HR. HR departments typically work with large amounts of
data. This includes retention, promotion, salary and benefit
data. Data mining compares this data to better help HR
processes.
• Social media. Social media companies use data mining to
gather large amounts of data about users and their online
activities. This data is controversially either used for targeted
advertising or might be sold to third parties.
 Data Mining and Social Media
• One of the most lucrative applications of data mining has
been undertaken by social media companies. Platforms like
Facebook, TikTok, Instagram, and X (formerly Twitter) gather
reams of data about their users based on their online
activities.

• That data can be used to make inferences about their

preferences. Advertisers can target their messages to the
people who appear to be most likely to respond positively.
• At the heart of the issue is that users may agree to the terms
and conditions of the sites not realizing how their personal
information is being collected or to whom their information is
being sold
 eBay and e-Commerce
• eBay collects countless bits of information every day from
sellers and buyers. The company uses data mining to attribute
relationships between products, assess desired price ranges,
analyze prior purchase patterns, and form product categories.

• eBay outlines the recommendation process as:

– Raw item metadata and user historical data are aggregated.
– Scripts are run on a trained model to generate and predict the item
and user.
– A KNN search is performed.
– The results are written to a database.
– The real-time recommendation takes the user ID, calls the database
results, and displays them to the user
 Recommender Systems
Recommender systems can use a content-based approach, a collaborative
approach, or a hybrid approach that combines both content-based and
collaborative methods.
• Content-based − In the content-based approach recommends items that are same
to items the customer preferred or queried in the previous. It depends on product
features and textual item definition.
In content-based methods, it is calculated based on the utilities assigned by the
similar user to different items that are same. Many systems target on
recommending items including textual data, including websites, articles, and news
messages. They view for commonalities between items. For movies, they can view
for same genres, directors, or actors.

• Collaborative − In the collaborative approach, it can consider a user’s social

environment. It recommends items depends on the opinions of different
customers who have same tastes or preferences as the user.
Recommender systems need a wide range of methods from information retrieval,
statistics, machine learning, and data mining to search for similarities between
items and user preferences.
 Data mining Tools
• Data Mining tools have the objective of discovering
patterns/trends/groupings among large sets of data and
transforming data into more refined information.
• It is a framework, such as R Studio or Tableau that allows
you to perform different types of data mining analysis.
• We can perform various algorithms such as clustering or
classification on the data set and visualize the results
itself.
• Data mining tools are the framework that provide us
better insights for our data and the phenomenon that
data represent.
 WEKA
• Weka is a comprehensive software that lets you to
preprocess the big data, apply different machine
learning algorithms on big data and compare various
outputs.
• This software makes it easy to work with big data and
train a machine using machine learning algorithms.
• WEKA is an open source software provides tools for data
preprocessing, implementation of several Machine
Learning algorithms, and visualization tools so that you
can develop machine learning techniques and apply
them to real-world data mining problems.
 WEKA
• WEKA supports several clustering algorithms such as EM,
FilteredClusterer, HierarchicalClusterer, SimpleKMeans and so
on. You should understand these algorithms completely to
fully exploit the WEKA capabilities.

• As in the case of classification, WEKA allows you to visualize

the detected clusters graphically.
What Weka can do?
 WEKA
WEKA supports a large number of file formats for the data. Here is the
complete list −
• arff
• arff.gz
• bsi
• csv
• dat
• data
• json
• json.gz
• libsvm
• m
• names
• xrff
• xrff.gz
 WEKA
Case Study – on Clustering using IRIS
dataset
• To demonstrate the clustering, we will use the
provided iris database. The data set contains
three classes of 50 instances each. Each class
refers to a type of iris plant.
 IRIS - Loading Data in WEKA

In the WEKA
explorer select
the Preprocess ta
b. Click on
the Open file ...
option and select
the iris.arff file in
the file selection
dialog. When you
load the data, the
screen looks like
as shown below
• You can observe that there are 150 instances and 5 attributes.
The names of attributes are listed
as sepallength, sepalwidth, petallength, petalwidth and class

• The first four attributes are of numeric type while the class is
a nominal type with 3 distinct values. Examine each attribute
to understand the features of the database. We will not do
any preprocessing on this data and straight-away proceed to
model building.
 IRIS - Clustering in WEKA

• Click on
the Cluster
TAB to
apply the
clustering
algorithms
to our
loaded
data.
• Click on
the Choose
button.
• Now, select EM as
the clustering
algorithm. In
the Cluster
mode sub window,
select the Classes
to clusters
evaluation option
as shown
 IRIS - Examining Output
• Click on
the Start butto
n to process
the data. After
a while, the
results will be
presented on
the screen.
• The output of
the data
processing is
shown
• From the output screen, you can observe that −

• There are 5 clustered instances detected in the database.

• The Cluster 0 represents setosa, Cluster 1 represents

virginica, Cluster 2 represents versicolor, while the last two
clusters do not have any class associated with them.

• If you scroll up the output window, you will also see some
statistics that gives the mean and standard deviation for each
of the attributes in the various detected clusters.
 IRIS - Visualizing Clusters

• To visualize
the clusters,
right click on
the EM result
in the Result
list. You will
see the
following
options
• Select Visualize cluster assignments.
• As in the case of classification, you will notice the distinction between the
correctly and incorrectly identified instances. You can play around by
changing the X and Y axes to analyze the results.
 Rapidminer – data mining tool
• RapidMiner is a free of charge, open source software tool for
data and text mining.

• It is used for business, commercial applications and research,

education, rapid prototyping, training, and application
development also supports the machine learning process,
including results from visualization, data preparation, model
validation, and optimization.

• Rapid Miner provides the server on-site as well as in public or

private cloud infrastructure. It has a client/server model as its
base. A rapid miner comes with template-based frameworks
that enable fast delivery
 Rapidminer
• RapidMiner provides data mining and machine
learning procedures including: data loading and
transformation (ETL), data preprocessing and visualization,
predictive analytics and statistical modeling, evaluation, and
deployment.
• RapidMiner allows connections to the most varied of data
sources such as Oracle, Microsoft SQL Server, MySQL, and
access to Excel, Access as well as numerous other data
formats.
• RapidMiner provides a GUI to design an analytical process
(reading data from source, transformations, applying
algorithm). All GUI changes are stored in an XML (eXtensible
Markup Language) file and then this file is read by RapidMiner
to run the analyses.
 IBM Watson for data mining
• IBM Watson is a data analytics processor that leverages
natural language processing to help industries such as
healthcare, finance, retail and more make better business
decisions.
• IBM Watson is an excellent data analysis platform integrated
with advanced application programming interfaces, software-
as-a-service application and specialized tooling.
• It leverages these tools for complex data analysis use cases
and can be integrated with different platforms for optimizing
daily tasks and enabling businesses to make the right
decisions.
 Key features of IBM Watson
• Cloud environment
IBM Watson’s cloud availability means companies can start
small and pay for what they use. In addition, this means
businesses won’t have to invest in in-house computing
devices or hardware, which can be expensive.

• API integration
IBM Watson is integrated with various APIs, allowing
developers to combine different features of Watson into the
business apps.
 Key features of IBM Watson
• Watson Assistant
Assistant builds better virtual agents to quickly get accurate
answers across applications and devices from customer
service to internal IT help desk and human resources teams. It
delivers consistent and intelligent customer care across all
channels and touchpoints with conversational AI.

• Watson Code Assistant

Code Assistant enables developers with various levels of
expertise to write code with AI-generated recommendations,
making it easier for anyone to write code.
 IBM Watson vs. other analytics
applications
IBM Watson stands out from other analytics applications because it
focuses on artificial intelligence and cognitive computing capabilities.
While traditional analytics applications provide valuable insights based on
historical data and statistical methods, Watson goes beyond that by
incorporating AI, machine learning, natural language processing and other
advanced technologies:

• AI-powered insights: IBM Watson’s AI offers the ability to analyze

unstructured data like text, images and audio to provide deeper insights
from diverse data sources, unlocking valuable information that would
otherwise remain untapped.
 IBM Watson vs. other analytics
applications
• Natural language understanding: NLU capabilities enable users to interact
with systems using natural language queries, making IBM Watson more
user-friendly and accessible to a broader range of users and allowing
nontechnical stakeholders to gain insights and make data-driven decisions
easily.
• Machine learning integration: IBM Watson seamlessly integrates with ML
algorithms, allowing users to build predictive models and perform
advanced analytics tasks as well as streamlining the process of developing
and deploying AI-driven solutions.
• Domain-specific solutions: IBM Watson’s domain-specific applications
come with pretrained models, making it quicker for businesses to adopt AI
in their specific fields.
• Natural language generation: IBM Watson’s NLG capabilities enable it to
generate human-like written responses or summaries, which can be
beneficial for creating reports, communicating insights and automating
content generation.
 Use cases of IBM Watson
• Healthcare
Watson’s ability to process and understand large amounts of complex data
makes it extremely valuable in healthcare. Watson can analyze medical
literature, clinical guidelines and patient records to assist doctors in
diagnosing diseases and suggesting treatments.

• Finance
Watson has been used in the financial industry to enhance customer service,
risk management and financial forecasting. Watson’s natural language
processing capabilities in customer service can build sophisticated chatbots
that handle customer inquiries.

• Retail
Watson’s machine learning and natural language processing abilities create
personalized shopping experiences in retail. For instance, Watson can analyze
a customer’s shopping history and preferences to recommend products they
might be interested in
THANK YOU