AUTOMATED MARKET BASKET ANALYSIS SYSTEM

1.1 Introduction

Market Basket Analysis System is a widely used technique among the Marketers to identify the best possible combinatory of the products or services which are frequently bought by the customers. This is also called product association analysis. Association analysis is mostly done based on an algorithm named “Apriori Algorithm” (Kavita et al., 2017). The Outcome of this analysis is called association rules. Marketers use these rules to strategize their recommendations. Market Basket Analysis (MBA) was coined from a supermarket scene where a customer enters and picks a basket to start shopping. The goal of a Market Basket Analysis System is to predict the customers buying pattern and possibly the goods in the superstore within the categories that the customer will like to pick and useful information to support retail marketing decisions (Savi et al., 2014).

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Limitations of the Study and Definition of technical terms.

1.2 Background of Study

Marketing concentrates primarily on the buyers, or consumers. After determining the customers’ needs and desires, marketers develop strategies that are designed to educate customers about a product’s most important features, persuade them to buy it, and then to enhance their satisfaction with the purchase. Where marketing once stopped with the sale, today businesses believe that it is more profitable to sell to existing customers than to new ones. As a result, marketing now also involves finding ways to turn one-time purchasers into lifelong customers. Marketing includes planning, organizing, directing, and controlling the decision-making regarding product lines, pricing, promotion, and servicing. In most of these areas marketing has overall authority; in others, as in product-line development, its function is primarily advisory. In addition, the marketing department of a business firm is responsible for the physical distribution of the products, determining the channels of distribution that will be used, and supervising the profitable flow of goods from the factory or warehouse.

The challenges encountered that led to the execution of the research work is that, the inefficiency and lack of effectiveness in focus group and individual market research or survey methods by developing a windows based application that uses qualitative (also called subjective or judgmental) survey techniques to report consumers behavior or reaction towards particular product(s) and/or service(s) of company over a reasonable period of time.

There are two types of research: qualitative and quantitative. To gain a general impression of the market, consumers, or the product, companies generally start with qualitative research. This approach asks open-ended rather than yes or no questions in order to enable people to explain their thoughts, feelings, or beliefs in detail. One of the most common qualitative research techniques is the focus group in which a moderator leads a discussion among a small group of consumers who are typical of the target market. The discussion usually involves a particular product, service, or marketing situation. Focus groups can yield insights into consumer perceptions and attitudes, but the findings cannot be applied to the whole market, because the sample size is too small. Focus group results, then, are suggestive rather than definitive.

The insights generated by a focus group are often explored further through quantitative research, which provides reliable, hard statistics. This type of research uses closed-ended questions, enabling the researcher to determine the exact percentage of people who answered yes or no to a question or who selected answer a, b, c, or d on a questionnaire. One of the most common quantitative research techniques is the survey in which researchers sample the opinions of a large group of people. If the sample group is large enough and is representative of a particular group, such as executives who use cell phones, statisticians consider the findings statistically valid, which means that if all consumers in that particular category could be surveyed, the findings would still be the same. This means that quantitative findings are conclusive in a way that qualitative findings cannot be.

1.3 Statement of the Problem

Investigation reveals the problems of the existing Market Basket Analysis System which entails that, the existing system is inefficiency and lack of effectiveness in focus group and individual market research or survey methods by developing a windows based application that uses qualitative (also called subjective or judgmental) survey techniques to report consumers behavior or reaction towards particular product(s) and/or service(s) of company over a reasonable period of time.

1.4 Aim and Objectives of Study

The aim of the study is to Design and Implement an Automated Market Basket Analysis System that offer a better services to the consumers. In achieving this aim, the following specific objectives were laid out as follows to design and develop an application software that will:

1. Implement a well market basket analysis tool to see how different products in a market shop assortment interrelate and how to exploit these relations by marketing activities
2. Provide valuable information about co-occurrences and co-purchases of products.
3. Analyze customers buying habits by finding association between the different items each customer place in their "shopping Basket".
4. Increase the amount of data that is been generated every second and to allow experts to search for meaningful associations among customer purchases.
5. Ensure maximum utilization of any available resources in a production process to meet-up with consumers’ needs and specifications.
6. Eliminate the bottleneck at all stages of production and to solve problems related to market research deficiency.

1.5 Significance of Study

Due to the commonly identified problem and issues in market basket analysis system, this thesis will go a long way to bring to the knowledge of sellers mining purchasing patterns of customers, store settings and serve customers better. The proposed system will be able to products with affinity to be sold together, also, improve in-store settings and optimize product placement and control inventory based on product demand being able to find the probability of purchase for each product or a certain set of products. Finally, the expected contribution and knowledge of this research work will benefit the researcher, and the end users.

1.6 Scope of Study

The study focuses on the Design and Implementation of Automated Market Basket Analysis System. It will cover the analysis of a market place on its market basket analysis, the market data mining, identifying customer requirements and customer profile system mapping. This system is basically a market analytical software or market utility tools which shall revolve on the listed objectives and scope.

1.7 Limitations of the Study

During the course of this study, many things militated against its completion, some of which are:

1. Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
2. Research material: availability of research material is a major setback to the scope of the study.
3. Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
4. Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet).

1.8 Definition of Terms

1. Internet: The Internet is a global wide area network that connects computer systems across the world.
2. Business: A business is defined as an organization or enterprising entity engaged in commercial, industrial, or professional activities.
3. Virtual Store: The virtual store is an online store that displays merchandise and an order form.
4. Marketing: Marketing is the process of teaching consumers why they should choose your product or service over those of your competitors, and is a form of persuasive communication.
5. Promotion Channels: In marketing, promotion refers to any type of marketing communication used to inform or persuade target audiences of the relative merits of a product, service, brand or issue.

Customer Relation: Customer relations describe the ways that a company will engage with its customers to improve the customer experience.