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The term market basket or commodity bundle refers to a fixed list of items used specifically to track the progress of inflation in an economy or specific market.
The most common type of market basket is the basket of consumer goods, used to define the Consumer Price Index (CPI). Other types of baskets are used to define
- Producer Price Index (PPI), previously known as Wholesale Price Index (WPI)
- various commodity price indices
The term market basket analysis in the retail business refers to research that provides the retailer with information to understand the purchase behaviour of a buyer. This information will enable the retailer to understand the buyer's needs and rewrite the store's layout accordingly, develop cross-promotional programs, or even capture new buyers (much like the cross-selling concept). An early illustrative example for this was when one super market chain discovered in its analysis that customers that bought diapers often bought beer as well, have put the diapers close to beer coolers, and their sales increased drastically. Although this is only an example that professors use to illustrate the concept to students, the explanation of this imaginary phenomenon might be that fathers that are sent out to buy diapers often buy a beer as well, as a reward. This kind of analysis is an example of the use of data mining. A widely used example of cross selling on the web with market basket analysis is Amazon.com's use of 'customers who bought book A also bought book B', e.g. 'People who read History of Portugal were also interested in Naval History'.
See also
References
Article is licensed under GNU Free Documentation License.
It uses material from Wikipedia.org Original article is here.
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