What is market basket analysis ? Explain with example

Market Basket Analysis
• Business Decision Making – catalog design, customer behavior analysis and cross marketing.
• Here we can analyze the Customer Behavior –his buying habits and association between different item sets kept in “shopping baskets”
• “Which group of items the customer are likely to buy on a given trip to a store”
• Use this result to plan the marketing strategy or design new catalog.
• Solution proposed for sale:
1. Items frequently purchased together are placed in proximity.
2. Keep items at two different ends.
• Items that are frequently purchased together form association rules.
Computer => antivirus [support = 2% and confidence = 60%]
• Support and Confidence are two measures of rule interesting ness
• Respectively reflect the usefulness and certainty of rules discovered.
• Support – 2% of all transactions under analysis show that computer and antivirus are bought together
• Confidence – 60% of all customers who purchased the computer also bought the antivirus.
Minimum Support Threshold and Minimum Confidence Threshold – set by user domain and experts.
• They make the rules interesting.