Have you come across a stylist in the salon offering a head massage or a facial when you go for a haircut? Almost every time right. Stop for a moment and think, how many times while shopping online have you been recommended an additional product at a discounted price. And how times have you purchased that recommended products?


Market Basket Analysis (MBA) is an analytical technique which is commonly put in use by retailers to understand their customer’s purchase behaviour. The purpose here is to identify the common attributes associated between pairs of products that are purchased together and identify the patterns of co-occurrence. Market Basket Analysis leads to effective marketing and sales by uncovering what items are frequently brought together by the customers.

The application of MBA is an important factor in Online product selling and can also be used in other segment of industry that sells multiple products.There are so many products and possibility that managers are not aware of. In a recent survey by Aberdeen group, 38% of the retailers felt MBA had a positive impact on their business.



You can organize the products in the store according to Market Basket Analysis in order to increase sales and revenue. You can arrange or place the products according to the Market Basket Analysis so that it catches the eyes of the customer and helps in making a decision to buy the other product. MBA acts as a guide to organize products & combos resulting in increased sales.


A retail store contains thousands of items that have some relationship with each other. In most cases, the sale of a product is driven by the increase or decrease in sales of other items. For instance, consumers of tea in a particular area can create an impact on the sale of sugar. Another example where Lay's American Style Cream & Onion Flavour Chip is a favorite type of chips among the consumers, and if the production of this flavor is stopped the sale of mayonnaise would decrease, even though there is no change in the other flavors and no relation between the products. This way marketers can understand the influence of such activities in customer behavior and sales.


Market basket analysis is the underlying principle that empowers recommendation engines. Many online retailers use this, even you would have come across a recommendation while you are shopping online. A recommendation engine is a software that analyzes, identifies and recommends products based on the interest of the customer.


Market Basket Analysis helps retailers to understand which Stock Keeping Units (SKUs) are more preferred by the customers (Stock Keeping Units is a method which is used to track inventory in retail stores). For instance milk powder and diapers are frequently bought by mothers, so there is a high probability of purchasing it when you compared to baby oil. Without MBA retailers would usually lower the quantity of diaper assuming diapers are sold at certain times when mothers buy milk powder. However, Market Basket Analysis can show us whenever mothers of certain age group purchases milk powder they end up buying diapers. This helps retailers to set the prices and also maintain the sales volume.



Businesses define cross-selling in many different ways depending on the factors involved. But in simple words cross-selling is a technique where a seller suggests complementary goods to customers with the primary product which is already purchased. MBA helps retailers to understand the behavior of the customer and then go for cross-selling.


Customer behaviour in general is a study of how an individual or a group of customers purchase to satisfy their needs and wants. As I mentioned above Market Basket Analysis helps to understand the consumer behaviour. It provides an insight into customer purchasing patterns and helps retailers to identify the relationship between two products where a customer tends to purchase.


Affinity promotion is a method which helps to discover the co-occurrence relationships among the items that have been purchased by specific individuals or groups using data analytics. By understanding the customer purchasing behavior organizations can take up decisions on Cross-selling, Loyalty programs, store layouts & prepare discount plans.


Market Basket Analysis is also applied to detect fraud. You might ask how? It is possible to identify fraudulent transactions by understanding customer behaviour under different conditions. For instance data that contains the usage of credit card can help us in detecting fraud which is associated with purchase behaviour.

In addition to its popularity as a retailer’s technique, it is also applicable in many other areas like bioinformatics, finance etc.
Bioinformatic in layman terms is the collection, classification & analysis of biochemical and biological information which is used to prescribe medicines to different patient groups.
In the area of finance, retailers can accumulate various information and MBA for detecting frauds, customer segmentation, etc.

In conclusion, MBA is becoming an essential tool for all organizations to discover the associations and hidden relationships among products which in turn is boosting their market presence. Yet MBA has lots of undiscovered scope left for discovery.

About the Author

Business Development Executive @Jb Nithin

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