Chapter 2 - Solving Problems in Industry

Abstract

This chapter explores various business problems that are common to many industries and that can be addressed with a strategy based on data mining. The chapter further identifies and discusses several cross-industry solutions, where data mining plays a central role. The solutions discussed in this chapter are customer acquisition, customer retention, response modelling, fraud detection, cross-selling, new product line development, survey analysis, credit storing, warranty analysis, and defect analysis. Understanding such common data mining scenarios is a beginning for identifying uses of data mining in individual application domains. This chapter also highlights several industries and their particular uses of data mining. Each of these industries can apply the cross-industry solutions, cited and tailored to their own domain-specific needs. This chapter also reveals that data mining's benefits can be leveraged by companies both big and small, from large financial institutions to local car dealerships, those with millions of customers and those with hundreds, and those with scientific as well as manufacturing process data analysis needs.