Modeling? Why Is Data Modeling Term Paper

It allows users to analyze data from many different dimensions or angles, categorize it, and summarize the relationships identified. Technically, data mining is the process of finding correlations or patterns among dozens of fields in large relational databases" (Palace, 1996).

One common example of using data mining is that of store inventory, such as a Midwest grocery chain called Kroger that used the data mining capacity software to discover: "that when men bought diapers on Thursdays and Saturdays, they also tended to buy beer. Further analysis showed that these shoppers typically did their weekly grocery shopping on Saturdays. On Thursdays, however, they only bought a few items. The retailer concluded that they purchased the beer to have it available for the upcoming weekend. The grocery chain could use this newly discovered information in various ways to increase revenue. For example, they could move the beer display closer to the diaper display. and, they could make sure beer and diapers were sold at full price on Thursdays" (Palace, 1996)

The pairing of promotions is especially useful in the food industry, where consumers are often very price sensitive, and there is a wide variety of substitutes. For example, a chain such as McDonald's when attempting to launch a new line of healthier salads might discover that the customers that consume salads most often purchase Happy Meals as well, indicating they are mothers going to the chain because of the child 'nag factor' or pressure.McDonald's might use this information to create promotional discounts (a coupon for any purchase of a salad with a Happy Meal), the creation of Happy Meals with more nutritionally friendly food for health-conscious mothers, or even the inclusion of wider aisles in its stores, to allow for mothers to take strollers into the seating area. Trying to find if the target salad/Happy Meal consumer uses the store to eat in, or eats in her car, would be another way of using demographic customer data accumulated by data mining to design stores, allocate raw materials, and to design advertising and promotional campaigns for new menu offerings.

Works Cited

Amber, Scott. (2002). "Data Modeling 101." Agile Data. Retrieved 167 Jul 2007 at http://www.agiledata.org/essays/dataModeling101.html

McGinn, Dan. (1 May 2001). "McDonald's Case Study: Burger Time."

The Jungle Magazine.

Retrieved 17 Jul 2007 at http://www.jungleonline.com/magazine.cfm?INC=inc_article.cfm&artid=1503&template=1&date=May2001&refid=g3

Palace, Bill. (1996)."Data Mining: What is Data Mining?" UCLA. Retrieved 17 Jul 2007 at http://www.anderson.ucla.edu/faculty/jason.frand/teacher/technologies/palace/datamining.htm.....