Lesson 1, Topic 1
In Progress

4.2 Data Mining Applications

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Data mining has become a popular tool in addressing many complex businesses problems and opportunities. It has been proven to be very successful and helpful in many areas, some of which are shown by the following representative examples. The goal of many of these business data mining applications is to solve a pressing problem or to explore an emerging business opportunity to create a sustainable competitive advantage. 

Customer Relationship Management 

  • Maximize return on marketing campaigns 
  • Improve customer retention (churn analysis) 
  • Maximize customer value (cross-, up-selling) 
  • Identify and treat most valued customers 

Banking & other financials

  • Automate the loan application process 
  • Detecting fraudulent transactions 
  • Maximize customer value (cross-, up-selling) 
  • Optimizing cash reserves with forecasting 

Retailing and Logistics 

  • Optimize inventory levels at different locations 
  • Improve the store layout and sales promotions 
  • Optimize logistics by predicting seasonal effects 
  • Minimize losses due to limited shelf life 

Manufacturing and Maintenance 

  • Predict/prevent machinery failures 
  • Identify anomalies in production systems to optimize the use manufacturing capacity 
  • Discover novel patterns to improve product quality 

Brokerage and Securities Trading 

  • Forecast the direction of stock fluctuations 
  • Assess the effect of events on market movements 
  • Identify and prevent fraudulent activities in trading 


  • Forecast claim costs for better business planning 
  • Determine optimal rate plans 
  • Optimize marketing to specific customers 
  • Identify and prevent fraudulent claim activities 
  • Computer hardware and software 
  • Science and engineering 
  • Government and defense 
  • Homeland security and law enforcement 
  • Travel, entertainment, sports 
  • Healthcare and medicine 
  • Sports,… virtually everywhere…