Download Presentation
Factor Analysis

Loading in 2 Seconds...

1 / 27

# Factor Analysis - PowerPoint PPT Presentation

Factor Analysis. Factor Analysis. A data reduction technique designed to represent a wide range of attributes on a smaller number of dimensions. Factor Analysis.

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

## PowerPoint Slideshow about 'Factor Analysis' - emily

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

### Factor Analysis

Factor Analysis
• A data reduction technique designed to represent a wide range of attributes on a smaller number of dimensions.
Factor Analysis
• For example, suppose that a bank asked a large number of questions about a given branch. Consider how the following characteristics might be more parsimoniously represented by just a few constructs (factors).
Factor Analysis

- Benefits include: (1) a more concise representation of the marketing situation and hence communication may be enhanced; (2) fewer questions may be required on future surveys; and, (3) perceptual maps become feasible.

- Ideally, interval data (e.g., a rating on a 7 point scale), regarding the perceptions of consumers are required regarding a number of features, such as those noted above for the bank are gathered.

Cumulative percent of variance explained.

We are looking for an eigenvalue above 1.0.

Expensive

Exciting

Luxury

Distinctive

Not Conservative

Not Family

Not Basic

Appeals to Others

Attractive Looking

Trend Setting

Reliable

Latest Features

Trust

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?

Expensive

Exciting

Luxury

Distinctive

Not Conservative

Not Family

Not Basic

Appeals to Others

Attractive Looking

Trend Setting

Reliable

Latest Features

Trust

TRENDY

EXCLUSIVE

RELIABLE

Calculate Component Scores

EXCLUSIVE

= (Expensive + Exciting + Luxury + Distinctive – Conservative – Family – Basic)/7

TRENDY

= (Appeals to Others + Attractive Looking + Trend Setting)/3

RELIABLE

= (Reliable + Latest Features + Trust)/3

### Cluster Analysis

Cluster Analysis
• A mechanism for grouping objects, frequently used for segmentation.

Vacation Anyone?

Relaxation

Distant Vacation

Adventure

Historical

Local Vacation

No Vacation

Cluster Analysis
• It would be possible to run factor analysis and then examine clusters after this.
• Two fundamental types of clustering exist: (1) hierarchical; and, (2) k-means.