Advance Marketing Research ToolsHomework #1

Advance Marketing Research ToolsHomework #1

Please use the Avery-data.xlsx file and the associated survey instrument as well as coding table to conduct the following analysis:

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1) Use data from survey questions 12 through 20 (V21 to V29) and conduct a factor analysis to determine whether people’s attitude toward buying from catalogs is a one-dimensional trait or whether it has multiple dimensions to it.

Use SPSS to create a scree-plot and interpret its results (10 points)
The screeplot for the factors is given below.
The screeplot shows three principal components (Eigen value above 1). This means that buying from catalogues has three dimensions.
b) Identify which variables are included in each factor? (10 points)
In the first dimension, the principle component (un-rotated) has: Low probability that merchandise will get lost in the mail (V21), No need to discuss product with someone who has purchased it before (V22), Can be trusted to deliver product that’spictured in the catalog (V23), Catalog merchandise is less expensive (V27), Catalogs have lower prices because thecompany does not have to pay salespeople (V29) and Not difficult to negotiate the price (V25). Factor 2 has: Purchase from catalog with easiest form to fill out (V26), Catalogs deliver the product to door (V28), and Catalog purchasing saves time (V24). Factor 3 has: Catalog merchandise is less expensive (V27), Catalogs have lower prices because the company does not have to pay salespeople (V29), and Not difficult to negotiate the price (V25). The table is given below.

c) Now conduct a factor analysis with Varimax rotation. Compare the results of this factor analysis with the results of the non-rotated factor analysis. (10 points)
Factor analysis with varimax rotation (with coefficients less than 0.35 suppressed) shows that the first factor has variables: Can be trusted to deliver product that’spictured in the catalog (V23), Low probability that merchandise will get lost in the mail (V21), and No need to discuss product with someone who has purchased it before (V22). Factor 2 has: Purchase from catalog with easiest form to fill out (V26), Catalogs deliver the product to door (V28), and Catalog purchasing saves time (V24). Factor 3 has Catalogs have lower prices because thecompany does not have to paysalespeople (V29), Catalog merchandise is less expensive (V27), and Not difficult to negotiate the price (V25). The summary table is given below.

As can be seen from the table, the variables all load highly on the components.
In comparison to the non-rotated solution, the non-rotated variable are not highly differentiated amongst the factors. Moreover, some variables load weakly on the components.

d) Label each dimension of people’s attitude towards buying from catalogs. (10 points)
Three main dimensions appear from the factor analysis. Factor one is dependability of the vendor and their distribution (Can be trusted to deliver product that’spictured in the catalog, Low probability that merchandise will get lost in the mail). The second attitude towards buying from catalogue is convenience (delivers to the door, saves time), and the third factor is cost of catalogue products (cheaper, easy to bargain).

e) Attach output of both factor analyses as well as scree-plot with your submission. (10 points)

SEE APPENDIX 1

QUESTION 2

2) Use the data from Question 21 (v31 to v38) concerning the importance of the various services or features when purchasing through catalogs.
a) Use a TwoStep Cluster analysis to identify number of clusters. (5 points)
The clusters have been generated using the Akike Information Criterion instead of the BIC because BIC penalizes complex models severely compared to AIC. Using this criterion, two clusters have been generated. Cluster 1 with 96% membership and cluster 2 with 4% membership. The output table is presented below.

b) Conduct a Hierarchical Cluster analysis on variables using average linkage method to generate a Dendogram and interpret it. (10 points)
The dendogram for the analysis is represented below.

c) Group variables in different clusters. (5 points)

There are two main clusters, the first cluster has Availability of quantity discounts (V31), Guarantees (V37), Number of years company has been in business (V35), and Company policy on returning merchandise(V33). The second cluster has: Shipping time (V32), Reputation of the company (V36), and Provision of a trial period (V34). Prefer Shopping (V39) can be clustered with both cluster 1 and cluster 2. Company endorsements (V38) does not belong to any cluster.

d) List which variables are included in each cluster. (5 points)
V31, V37, V35, V33 belong to one cluster. Similarly, V32, V36, and V34 belong to another cluster.
e) Label each cluster appropriately based on the variables forming the cluster. (10 points)

Cluster 1 can is about product features (discount, warranty, policy on returning goods). Cluster two is about company reputation (reputation, shipping time).

f) Create a new variable in the data view and assign each response/case to clusters. (You must include a table with cluster membership of case 1 to 25 as a submission of your homework assignment) (5 points)

Advance Marketing Research

Advance Marketing Research