Data mining enables people to discover unanticipated information on an unaided basis. This is information they can act on to better understand, selectively market to and retain their best customers, or sharply cut consumer fraud. In a way, true data mining means finding and implementing the powerful tools to search your databases, in their entirety, for the very patterns you didn't know where there -- the patterns you didn't even think of asking about. The real power of true data mining has the capacity to amaze the most skeptical executive.
As mentioned before the purpose of using data mining is the use of pattern recognition logic to identity trends within a sample data set and extrapolate this information against the larger data pool.

Real life example of Data Mining use

An excellent example of data mining is the process used by telephone companies to market products to existing customers. The telephone company uses data mining software to access its database of customer information. A query is written to identify customers who have subscribed to the basic phone package and the Internet service over a specific time frame. Once this data set is selected, another query is written to determine how many of these customers took advantage of free additional phone features during a trial promotion. The results of this data mining exercise reveal patterns of behavior that can drive or help refine a marketing plan to increase the use of additional telephone services.

Uses of data mining

 

Data mining is widely used across many industries, below are few examples:

• Data mining can also be helpful to human-resources departments in identifying the characteristics of their most successful employees
• Data mining in customer relationship management applications can contribute significantly to the bottom line
• Data mining is widely used in gaming industry for certain combinational games
• Another example of data mining, often called the market basket analysis, relates to its use in retail sales.
• Data Mining is a highly effective tool in the catalog marketing industry.
• In recent years, data mining has been widely used in area of science and engineering, such as bioinformatics, genetics, medicine, education and electrical power engineering.