A company wants to improve its sales by analyzing customer preferences and purchase behavior over the last year. Which technique should they use to understand the relationship between the products customers frequently buy together?
Focus on individual product sales without considering relationships.
Implement random sampling of customer data to make generalizations.
Use correlation analysis to identify common purchase patterns.
Conduct a survey to ask customers what they might buy together.
The correct answer is a method that identifies and analyzes relationships between different data points. This technique helps businesses leverage data to recognize trends and associations, which can lead to targeted marketing strategies and increased sales. The other options do not specifically address the relationship between variables, making them less suitable for this scenario.
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What is correlation analysis, and how does it help businesses?
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Why is a survey not as effective for identifying product purchase relationships?