Factor analysis is a technique used to reduce a large set of variables down to a smaller set of underlying factors or components. It can identify hidden constructs or dimensions in a set of data that may not be obvious. For example, when a bank asks customers many questions, factor analysis can group related characteristics like dependability, honesty and reliability into a single "trustworthiness" factor. It provides a concise representation of the data while also identifying interrelationships between variables.

1. Factor AnalysisBy: Vineet JogalekarVinayak Potadar Sucheta S. Sirsikar

2. FACTOR ANALYSIS A data reduction technique designed to represent a wide range of attributes on a smaller number of dimensions.

3. 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 represented by just a few constructs (factors).

4. FACTOR ANALYSIS

5. BENEFITS A more concise representation of the market situation.Fewer questions may be required on future surveys.Identification of groups of interrelated variables to see how they are related to each other.Factor analyses can be used to identify hidden dimensions or constructs which may not be apparent from direct analysis.It is easy and inexpensive to do.

6. CONDUCTING FACTOR ANALYSISFormulate the problemDetermine the method of factor analysisDetermine the number of factorsRotate the factorsInterpret the factors

8. SPSS DATA

9. COMPONENT MATRIX OBTAINED FROM SPSS

10. WHAT SHALL THESE COMPONENTS BE CALLED?

11. THESE COMPONENTS MAY BE CALLED ASATTRACTIVENESSTRUSTWORTHINESSEXPERTISE

12. CALCULATE COMPONENT SCORESTRUSTWORTHINESS= (Dependable + Honest + Reliable + Trustworthy + Sincere)/5 (0.6874)ATTRACTIVENESS= (Attractiveness + Classy + Beautiful + Elegant + Sexy)/5 (0.9)EXPERTISE= (Knowledgeable + Qualified)/2 (0.756)

13. APPLICATIONS IN MARKET RESEARCHUsed in market segmentation for identifying the underlying variables to group the customers.Identify the brand attributes that influence consumer choiceIdentify the characteristics of a certain type of customers (eg. price sensitive)

14. THANueries????"Q"THAN