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Data Mining The Foundational Elements Of Data Research Paper

¶ … data mining? The foundational elements of data mining are multidisciplinary in nature, encompassing analytics, computer science, database systems integration and management, statistics and artificial intelligence. Often these technologies are used to create a single system of record used for analysis and advanced queries by the enterprises who build them. Data mining is often included in business intelligence (BI) suites and the analytics layer of an enterprise-wide computing system, as each application needs to gain access to the metrics and key performance indicators (KPIs) (Peacock, 1998). The use of data mining has become more pervasive in marketing, sales and service as organizations strive to gain insights from the terabytes of data they have accumulated over years and in some cases decades of operation. Data mining can provide marketers with greater insights into the preferences, needs and wants of customers, in addition to potential new product or service ideas based on a careful analysis of the accumulated data on customer bases (Koh, Kin, 2002).

Data mining also creates a highly effective platform for completing simulations of potential pricing and service strategies, and can serve as a very effective source of product line enhancement ideas (Peacock, 1998). The potential also exists to use data mining as a means to create a highly effective segmentation model based on previous customer purchases and the patterns of services purchased as well. Data mining's greatest potential however is being seen in the precise aligning of pricing and the potential to generate greater profits over time.

2. What is the Value Map?

The foundational elements of a value map is the charting of price and benefits of a given product. This two-dimensional grid is often...

Advanced forms of value maps can also provide insights into the price elasticity of products, and how a per unit change in a given pricing schedule will impact demand over the long-term.
Marketers also rely on the value map to determine the perceived quality of their products relative to competitors and also substitutes. The market share changes that can occur over time with differences in perceived cost and quality are also tracked in this two-dimensional model. There is no single, optimal point for a product to occupy in the matrix as differentiation and market position varies significantly by product, its relative competitive position and value delivered. For more inelastically-priced goods having a higher perceived price and higher perceived quality, and therefore continually stay at a price premium that ensures long-term profitability. As products encounter greater competition the pressure to move into an economic-driven positioning strategy of mid-to-low cost with perceived quality at a lower point begins to force commoditization into markets. These dynamics occur slowly in markets with highly elastic product demand and very quickly in highly inelastic markets. The greater the elasticity of a product in a given market, the higher the probability of being able to resist the commoditization that occurs in markets comprised of products that lack differentiation over time.

3. What are the approaches to market segmentation?

There are four major types of market segmentation used today. The most common are demographic and geographic with behavioral and psychographic being most often used for consumer products (Tuma, Decker, Scholz, 2011). Geographic segmentation is often defined by…

Sources used in this document:
References

Craft, S.H. (2001). An empirical investigation of international consumer market segmentation decisions. The George Washington University). ProQuest Dissertations and Theses,, 155-155

Ganeshasundaram, R., & Henley, N. (2006). The prevalence and usefulness of market research: An empirical investigation into 'background' versus 'decision' research. International Journal of Market Research, 48(5), 525-550.

Koh, H.C., & Chan Kin, L.G. (2002). Data mining and customer relationship marketing in the banking industry. Singapore Management Review, 24(2), 1-27.

Peacock, P.R. (1998). Data mining in marketing: Part 1. Marketing Management, 6(4), 8-18.
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