What is Data Mining? Key Concepts and How Does It Work?

September 27, 2021 | Louis Garrick | Online Courses

What is Data Mining? Key Concepts and How Does It Work?

Converting raw data into beneficial information requires a systematic process – this process is termed data mining. With the help of data mining software, one can oversee the patterns in massive datasets and extract valuable knowledge.

With the help of data mining, businesses can attain more knowledge about the customers to form more efficient marketing strategies that increase sales and reduce costs. This entirely depends on warehousing, computer processing, and effective data gathering.

One most frequently asked question that people often ask is;

“What is data mining, and how to begin a career in this direction?”

In simple words, data mining is a process to explore data by finding patterns, design models, cleaning, and creating tests. Data mining includes statistics, machine learning, and database management.

What is Data Mining? Key Concepts and How Does It Work
What is Data Mining? Key Concepts and How Does It Work

This is the reason why it is confused with data science, data processes, and data analytics.

This article will thoroughly discuss the key concepts and how data mining works, along with a few examples to give you a clear overview.

Main Data Mining Concepts

You’ll need numerous techniques, tools, concepts, and strategies to carry out data mining tasks. Let’s discuss some of the most widely used data mining concepts.

Data Preparation

During this process, raw data from various sources is converted into a standard format which is then processed and analyzed. This includes removing errors, locating missing values, erasing the duplicates, and identifying the issues.

Data Preparation
Data Preparation

Artificial Intelligence

AI systems perform analytical activities like human intelligence. These activities include problem-solving, learning, planning, and reasoning. Artificial intelligence has gained significant popularity over the past few years and is now used almost everywhere.

Artificial Intelligence
Artificial Intelligence

Association Rule Learning

This strategy is also known as market basket analysis. It is a concept for finding the relationship among different variables of a dataset. It helps determine which products are purchased together, which is why it is among the most crucial components.


Quite evident from the name itself, clustering helps divide more enormous datasets into smaller and meaningful subsets – known as clusters. This way, clustering, and grouping can be done quickly. The collection helps in analyzing which datasets match closely and fit together perfectly.



This is the concept of classification, which helps in assigning products in a more extensive dataset. This improves the prediction accuracy of the new targeted data.

Data Analytics

Once you’ve gathered the information, it is brought together and processed. After being processed, data analytics is used to analyze the data, generating insights, and finding patterns.

Data Warehousing

This process means storing extensive business data to facilitate rapid decision-making. Data warehousing is among the most wide-ranging data mining projects.


It is a technique that helps predict numeric values like stock prices, sales, and temperature on a specific dataset.

How Does Data Mining Work?

Discovering and examining a large amount of data to figure out the different patterns and trends are usually involved in data mining. It is currently used in database marketing, spam email filtering, credit risk management, and fraud detection.

The organized data is stored and managed in the cloud servers. The data is then evaluated by management teams, information technology professionals, and business analysts to determine how to gather and organize the data.

Depending on the results, it is then sorted by the application software. Lastly, the end-user obtains the data in a table or a graph that is convenient to understand.

Examples of Data Mining

Data mining techniques are most widely used in grocery stores. Several supermarkets often provide free loyalty cards to buyers – this includes access to lesser prices that are not available for non-members. These cards make it easier for stores to track when the customer is purchasing, who is buying, and at what price.


If used appropriately, data mining offers excellent benefits over competitors. It enables a business to analyze the trend of customers to form marketing strategies that are efficient to bring down the costs and upsurge the revenue.

You can pursue your data mining career quickly. Just make sure you have a bachelor’s degree in software engineering or computer science – this will help you rapidly grasp the technical terms. Other than this, you can also complete a few short-term courses like data analytics, machine learning, and artificial intelligence for better command of the subject.

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