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Factor Analysis
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Factor Analysis
- Benefits include: (1) a more concise representationof the marketing situation and hence communication
may be enhanced; (2) fewer questions may berequired on future surveys; and, (3) perceptual mapsbecome feasible.
- Ideally, interval data (e.g., a rating on a 7 pointscale), regarding the perceptions of consumers arerequired regarding a number of features, such asthose noted above for the bank are gathered.
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We are looking for an eigenvalue above 1.0.
Cumulative percent of variance explained.
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Expensive
Exciting
Luxury
Distinctive
Not Conservative
Not Family
Not Basic
Appeals to Others
Attractive Looking
Trend Setting
Reliable
Latest Features
Trust
What shall these components be called?
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Expensive
Exciting
Luxury
Distinctive
Not Conservative
Not Family
Not Basic
Appeals to Others
Attractive Looking
Trend Setting
Reliable
Latest Features
Trust
EXCLUSIVE TRENDY RELIABLE
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= (Expensive + Exciting + Luxury + Distinctive Conservative Family Basic)/7
= (Appeals to Others + Attractive Looking + Trend Setting)/3
= (Reliable + Latest Features + Trust)/3
EXCLUSIVE
TRENDY
RELIABLE
Calculate Component Scores
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Exclusive Trendy Reliable
Beetle 1.4 6.7 6.9
Hummer 3.9 6.2 6.7
Lotus 4.1 7.3 6.7
Minivan -1.67 4.83 6.5
Pick-Up -0.43 4.93 6.3
Not much differing on
this dimension.
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Exclusive Trendy Reliable
Beetle 1.4 6.7 6.9
Hummer 3.9 6.2 6.7
Lotus 4.1 7.3 6.7
Minivan -1.67 4.83 6.5
Pick-Up -0.43 4.93 6.3
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Vehicle by Component
-3 -2 -1 0 1 2 3 4 5 6 7 8
Beetle
Hummer
Lotus
Minivan
Pick-Up
Exclusive Trendy
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Cluster Analysis
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Cluster Analysis
A mechanism for grouping objects,
frequently used for segmentation.
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How would you group these faces?
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VacationAnyone?
No Vacation
Local
Vacation
Distant
Vacation
Relaxation
Adventure
Historical
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