Complete Guide: What Are Data Mining Functionalities?

Indeed Editorial Team

Updated 19 January 2023

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

With the advent of computers, the Internet, and large databases, it is now possible to collect a large volume of data from various websites. Data is retrievable in the form of data relationships, correlations, and patterns and data mining is the analysis of enormous amounts of datasets to extract useful intelligence to resolve issues, mitigate risks, predict trends, and identify new opportunities. In data mining, functionalities are used to represent the kinds of patterns that are necessary to be discovered. In this article, we discuss the different types of data mining functionalities and look at some of their techniques.

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What Are Data Mining Functionalities?

Data mining functionalities identify trends and correlations within data mining activities. Data mining makes use of large datasets using machine learning, statistics, and database systems. From marketing strategies to investment analysis, companies use data mining and machine learning to improve everything from their sales processes to their financial analysis. Here are some of the data mining functionalities:


Classification is a process of determining a model that describes and differentiates data classes with the intention of using it to predict a class of unknown or anonymous objects. In classification, a model categorizes elements within a collection, according to certain predefined properties. The model can also classify instances that do not yet have a classification. It uses methods like decision trees, if-then statements, and neural networks to predict a class or to classify a set of items.


Professionals opt for prediction using regression analysis or other models to find the unavailable data. If the class labels are unavailable, then they use classification functionality for prediction. Prediction is important in business intelligence because it helps find missing values. This may be a prediction of time-related increase or decrease trends or missing numeric values.


Clustering differs from classification and prediction, which analyze class-labeled data objects. Clustering can generate class labels for such data objects. The objective of clustering algorithms is to maximize the intraclass similarity and minimize the interclass similarity between features. Data are grouped based on similarities and differences between features. Professionals use it widely in a number of applications including data analysis, pattern recognition, and image processing.

Class/Concept Description

It is possible to link data to classes and concepts. In a simple, descriptive, and precise manner, it may be useful to define individual groups and concepts. Data mining can be used to determine the data types and concepts present in data stores by using two ways:

Data characterization

Data characterization is the process of summarising general characteristics or features of a class of data by defining the target class through specific rules. In general, a database query collects data corresponding to user-specified classes. An individual can organize the results of data characterization in several different ways.

Data discrimination

Data discrimination refers to data objects of the target class being compared to those class(es) of contrasting objects. The discrimination process separates distinct sets of data based on their disparate attributes. There are different ways to present the output, including pie charts, bar graphs, and curves.

Association analysis

Association analysis is a process of determining relationships between data and establishing the rules of the association. Also known as market basket analysis, association analysis finds its use in retail sales, and involves discovering patterns of items occurring together frequently using rules with two parts, for example, antecedents (if) and consequences (then). Association analysis helps to find out how different items have a relationship.

Outlier analysis

A database may contain data objects, known as outliers, that do not conform to the general behavior or model of the data. Data mining methods often discard outliers as noise or exceptions in databases. It is important to conduct an outlier analysis to gauge the quality of data. If the data contains too many outliers, it is impossible to trust the data or develop patterns from it. Algorithms are primarily used to categorize data that are not classifiable.

Evolution analysis

It is a process of studying datasets that have undergone changes or transformations. Evolution analysis models capture those trends, contributing to the characterization, classification, or discrimination and cluster analysis of data for multivariate time series. Studying stock exchange data may allow you to identify stock price evolution patterns for overall stocks and for stocks of specific companies. These patterns may help you anticipate future trends in stock market prices, which can contribute to your stock investing decisions.

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Usage Of Data Mining

The purpose of data mining is to discover insight and visions from large data sets. As part of the data mining process, mining algorithms are applied to a data warehouse or database to unravel valuable insights. Data mining has become a standard process in businesses and organizations. Here are some of the usages of data mining:

Identify purchase patterns

An accurate understanding of buying behavior is essential to marketing management. The analysis of buying behavior aids professionals in implementing production plans and marketing strategies. By using clusters, it becomes easy to group things according to their known characteristics, such as classifying customers according to their purchase habits and demographics. This helps find the target audience for a particular product thus increasing sales and generating revenue.

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Analyze claims and behavior of insurers

Data mining is one of the most effective ways of transforming data into information regarding customers, competitors, and the market. Many insurance industries are implementing data mining successfully and have obtained enormous competitive advantages. It is possible to utilize data mining to analyze claims in the insurance sector, for instance, to determine which medical procedures someone can claim together. As a result, data mining can predict potential customers who are likely to buy new schemes. Insurers can also use data mining to detect risky customer behavior patterns and detect fraudulent activity.

Help perform web optimization

The objective of data mining in search engine optimization (SEO) is to identify new patterns of traffic and uncover niche opportunities from the collected data to market a product or service efficiently to a certain segment of users. The most successful and actionable SEO tactics rely on data mining by collecting data from different search engines, identifying inconsistencies in traffic, behavior, or conversion patterns, and understanding the significance of each.

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Analyze financial data

A banking institution gathers and stores information about transactions, profitability, client portfolios, market assets, operations, and behavior patterns in databases accessible to each entity. In the financial and banking sectors, data mining can be used to assess credit risk, optimize stock portfolios, identify fraudulent transactions, segment customers and determine profitability, predict payment defaults, rank investments, and do marketing analyses.

Manage data from telecommunication networks

Telecommunication companies generate and store large volumes of high-quality data, have massive customer bases, and operate in quickly changing and highly competitive environments. Companies extensively use data mining to enhance their marketing efforts. This involves collecting call detail data, network data, and customer data. The data mining applications in the telecommunication industry involve customer profiling, fraud detection, and network fault isolation among others.

Help in recruiting suitable candidates

Data mining is a technique used by companies to analyze large quantities of data to gain insight into employee performance. Data mining can be used to gain insight into the performance of high-performing and/or longstanding employees. Recruiters and HR professionals use data mining and predictive analytics to predict a candidate's tenure by using historical data and statistical methods.

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Popular Data Mining Techniques

Data mining is essential in both business intelligence and data science. Organizations often use a wide range of data mining techniques to transform raw data into actionable insights, including artificial intelligence and machine learning. Here are some of the commonly used data mining techniques:

  • Neural networks: Often used in conjunction with AI and deep learning, neural networks are a type of machine learning model that has similar workings to that of the layers of neurons in the brain. Neural networks are one of the most accurate types of machine learning models.

  • Data warehousing: The modern data warehouse can analyze data in detail in real time, unlike traditional data warehouses that were used primarily for archiving and analyzing historic data. There are semi-structured and non-structural cloud data warehouses.

  • Decision trees: Technically, a decision tree is a type of machine learning model. Its inherently straightforward nature makes it more commonly referred to as a white-box model. Each leaf node of a decision tree corresponds to a class label, while internal nodes represent attributes.

  • Finding patterns: Identifying and tracking trends or patterns in datasets is an essential part of data mining. For instance, it may be useful for marketers to know when and why specific products are getting more sales, such as when the holidays approach or when the winter begins.

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The Average Salary Of A Data Scientist

The salary of a data scientist may depend on factors such as education, experience, and performance. The national average salary for a data scientist is ₹13,36,743 per year. Other factors such as geographical location and place of employment also affect the salaries of data mining professionals.

Related: 12 Common Data Mining Interview Questions (With Answers)

Salary figure reflects data listed on Indeed Salaries at the time of writing. Salaries may vary on the hiring organization and a candidate's experience, academic background, and location.

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