An overview of a market basket analysis

Market basket analysis is a data mining technique that has the purpose of finding the optimal combination of products or services and allows marketers to exploit this knowledge to provide recommendations, optimize the product placement, or develop marketing programs that take advantage of cross-selling. In short, the idea is to identify what items go well together, and profit from this.

You can think of the results of the analysis as an IF-THEN statement. IF a customer buys an airplane ticket, THEN there is a 46 percent probability that they will buy a hotel room, and IF they go on to buy a hotel room, THEN there is a 33 percent probability that they will rent a car. (With all the travelling in my business, this is a never-ending annoyance for me.)

However, it is not just for sales and marketing. It is also being used in fraud detection and healthcare; for example, if a patient undergoes treatment A, then there is a 26 percent probability that they might...