In today’s competitive market, firms are always trying to expand their product/service line into new market in hopes of capturing new costumers. For example, we can see that McDonalds have attempted to expand into the premium coffee market through the introduction of McCafe in some of its locations or – as we all see in class – Ritz has introduced its “toasted chips” in invade the bigger and faster expanding chips market. Data-mining plays an important role in the introduction of new products because the trends and relationship between products that can be extracted by firms can significantly determine how a new product/service would do when introduced to a market. For example, McDonalds must have been confident that a decent portion of their customers would like to grab a cup of coffee after a meal there before introducing the McCafe.
The power of data-mining is evidential when we look at Budweiser, whose primary product is beer. My friend observed that another product line that has been introduced by Budweiser is BBQ sauce, which has been packaged as a ‘6 pack’ like a pack of beer. With a 100 guesses, how many people would have expected a beer producer to introduce a BBQ sauce product? However, if we really think about it, many beer drinker will drink during a BBQ with friends or with some snacks, therefore, the idea possibly isn’t that far-fetched after all… and here ladies and gentlemen: this is the power of data-mining!