Segmenting markets

Segmenting markets Essay example
Undergraduate
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Marketing
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Discussion on Factor Analysis and Cluster Analysis [Student’s name] [Course title] [Supervisor’s name] [Date] Discussion on Factor Analysis and Cluster Analysis 1. Factor Analysis: Factor Analysis is a statistical tool that helps in understanding variables, or factors among the correlated and observed variables…

Introduction

Exploratory factor analysis is a technique for factor analysis which is often used for a larger set of variable. If the goal of a researcher is to identify the relationship with the measured variable then he should opt for the exploratory factor analysis. This method would help a researcher if no prior assumption or theory is made on the relation of the factors. However, in confirmatory factor analysis the variables are determined with the relation of prior assumptions or theory which aims to see if it meets the expectation as it was predicted. This method is selected when a social research is conducted. The simplification of a factor analysis is often interpreted by a method known as rotation which makes the output more understandable for the researcher. Rotation is the next step involved in factor analysis. The pattern of loadings in rotation works differently on each variable, the loading of each variable that has extracted factors are maximized while it minimizes the loading for other factors. There are five methods of rotation in which varimax, equamax and quartimax are orthogonal rotations whereas promax and direct oblimin are oblique rotations. ...
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