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Market basket
From Wikipedia, the free encyclopedia
- For the Texas and Louisiana grocery store chain, see Market Basket.
- For the New England grocery store chain, see DeMoulas' Market Basket.
The term market basket or commodity bundle refers to a fixed list of items used specifically to track the progress of inflation in an economy or specific market.
The most common type of market basket is the basket of consumer goods, used to define the Consumer Price Index (CPI). Other types of baskets are used to define
- Producer Price Index (PPI), previously known as Wholesale Price Index (WPI)
- various commodity price indices
The term "market basket" in the retail business refers to research that provides the retailer with information to understand the purchase behaviour of a buyer. This information will enable the retailer to understand the buyer's needs and rewrite the store's layout accordingly, develop cross-promotional programs, or even capture new buyers (much like the cross-selling concept). Most famous illustrative example for this is that when one super market chain discovered in its analysis that customers that bought diapers often bought beer as well, have put the diapers close to beer coolers, and their sales increased drastically. Although this is only an example that professors use to illustrate the concept to students, the explanation of this imaginary phenomenon might be that fathers that are sent out to buy diapers often buy a beer as well, as a reward[1]. This kind of analysis is one of the main uses of data mining.