FACTOR ANALYSIS:

Factor analysis is s very useful method of reducing data complexity by

reducing the no. of variables being studied.

Brands/objects have large number of different attributes and factors that

define them. Each attribute may or may not be correlated to each other.
Also, certain attributes may exist in combinations/underlying dimensions and
some may be unique. These combinations/underlying dimensions are called
as Factors.

Factor Analysis helps the researcher to determine the important attributes or

factors that affect the consumer buying behaviour. Also, it reduces the
complexity of the attributes by correlating/joining them into factors. The
distinguishing attributes identified are grouped under the factors and the
Perceptual Maps are drawn with the factors as the axes. The attributes are
plotted on the perceptual maps. The direction of the vector line indicates the
nature of association between the factor and the attribute and the length of
the vector line determines the strength of association of the factor with the
attributes.

In marketing, we need to know the exact reasons why a consumer buys the
product. The consumers’ purchasing criteria varies in number from 2 or 3 to
15 or 20. We need to understand the underlying significant drivers of buying
behavior for a particular product. Factor Analysis reduces the complexity of
the features/attributes into relevant factors. Factors thus created provide
insight into relevant psychographic of target customer.

How Factor Analysis is carried out?

The basic problem is identified and the attributes that define the problem are
obtained through Questionnaire and Focus Group Discussions. The identified
variables are then converted into questionnaire using questionnaire design
techniques. The questionnaire was in the form of statements and the
respondents are asked to rate them in a Likert scale ranging from 1 to 5
where 1-Strongly Agree and 5-Strongly Disagree.

The responses are loaded into SPSS and the variables that significantly affect
the behaviour are recorded. First, the total variable explained table contains
all the factors (components) with their respective eigen values. The factors
with eigen values > 1 are considered.
Also, from the Rotated Component Matrix, correlation between attributes and
factors can be obtained wherein the attributes having r value (coefficient of
determination) > 0.7 and <-0.7 are related to the corresponding components
(factors).

Once the factors are identified and the variables are grouped under the
factors, the factors are given the suitable names. Then the attributes are
plotted on the perceptual maps with the factors as the axes, taken 2 at a
time. Thus, for every combination of 2 factors, the perceptual maps are
drawn. And the length of the vector gives the strength of association and the
direction gives the nature of the association.

For example, a 2-Wheeler manufacturer wanted to analyze the buying

behaviour of the consumers and he conducted a suitable research study to
find out the affecting attributes.

After the exploratory research, focus group discussions and the

questionnaire design techniques, he identified 10 attributes in the form of
question statements for which the respondents had to rate from 1 (SA) to
5(SD) in a Likert scale. These attributes were:

1. Affordability
2. Safety
3. Comfort
4. Economy
5. Friends’ jealous
6. 3 people on a ride
7. Man’s vehicle
8. Power
9. Ads Feel good
10.Sense of freedom

(Explain how it is done using SPSS)

F1: Economy (affordability, legal 3)

F2: Features (comfort, safety)

F3: Macho (man’s vehicle, power, friends’ jealous, ads feel good)

<<Classify the attributes into the factors and draw the perceptual maps. >>
DISCRIMINANT ANALYSIS:

The major application of discriminate analysis technique is to be able to

distinguish between two or three sets of objects or people, based on the
knowledge of some of their characteristics. Discriminant analysis can be
used by credit rating agencies to rate individuals, to classify them into good
lending risks or bad lending risks. Typically, grouping could be made as
users/ non-users ; potentially successful salesman/ potentially unsuccessful
salesman ; high risk/low risk customers or on similar lines.

Discriminate analysis is very similar to the multiple regression technique.

The form of the discriminant function is :

Y = a + k1.x1 + k2.x2

Where,

Y  Dependent variable. It is a grouping variable, used for classifying into 2

or more groups.

X1, x2  independent variables. These are continuous scale variables

K1 ; k2  unstandardised discriminant function co-efficient.

Discriminant analysis helps build a discriminate model in the firm of a linear

equation. The co-efficient of the equation can be used to calculate the
discriminant score(Y), for any new data points that we want to classify into
one of the groups. A decision rule is formulated for this process, to determine
the cutoff score, which is usually the midpoint of the mean discriminant
scores of the groups. Based on the decision rule, we classify a new object
into one group or the other; this is the predicted group membership for the
new object.

For e.g : if we have 3 variables – age , income, and no of year married for;
which have been identified to have impact on customer credit worthiness.

We may get discriminant function as

Credit worthiness = 0.194 ( Age ) + 0.0095 ( Income ) + 0.163 ( Yrs

married ) – 9.06

Accuracy of the discriminant function is given by the classification matrix,

which tells what percentage of the existing data points are correctly
classified by the discriminant function. This percentage is somewhat
analogous to the R2 in regression analysis. This step also helps us identify
the misrepresented cases by the model, if any.

Statistical significance of the model is explained by the Wilk’s lambda value

and the eigen value

When eigen value > 1 , groups are distinct , and hence the model has good
discriminating power.

WIlk’s lambda is a measure of the extent of misfit of the discriminant

solution. Values of lambda range from 0 to 1. Values close to 0 : groups are
distinctly different.

Values close to 1 : groups are overlapping.

When lambda < 0.5, solution is statistically significant and acceptable.

Best discriminator in order to determine which one of the independent

variables is more important in discriminating between groups. We refer to
the discriminant function co-efficient. To overcome the problem of different
measurement units, we obtain the standardized discriminant function co-
efficient.

The higher the standardized discriminant co-efficient of a variable, the higher

is its discriminating power.

For e.g, from the standardized table, if we get

Y = 0.907 &(Age) + 0.924 (Income) + 0.285 (Yrs married);

Best discriminator is Income.

Discriminant criteria :How to classify a new credit card applicant as “high
risk” or “ low risk”

We determine the means for the group centroids.

-1.27 0 1.27

( low risk) (high risk)

(mean of group1 ) (mean of group 2)

Disc Crit. =(μHigh Risk*Nos High Risk)+(μ low risk*Nos Low Risk)Nos High
Risk+Nos Los Risk =-1.269*9+ (1.269*9)18 = 0

This gives us a decision rule for classifying any new case. If the discriminant
score of an applicant falls to the right of the midpoint ( i.e. greater than 0 ),
we classify the applicant as “high risk”. Alternatively, if the discriminant
score falls to the left of the midpoint ( i.e. less than 0), we classify the
applicant as “low risk”.

Thus, discriminant analysis helps us determine the credit worthiness (and

hence classify them into groups) of any person whose age, income and years
married are known. The discriminant model provides an unbiased decision
model, which is as good as the data on which on which it is based.
CLUSTER ANALYSIS

Application Area:

Cluster analysis is a multivariate procedure ideally suited for the

segmentation applications in the marketing research. This is because a
cluster by definnation is a group of similar objects. And segmentation
involves identifying the groups of target customers who are similar in their
buying habits, demographic Characteristics or psychographics.

Methods:

The basic methods of clustering used in computer packages are of two types:

1. Hierarchical clustering or Methods.

2. Non-Hierarchical clustering or Nodal method

Hierarchical Clustering:

– The Linkage could be single/completed/average.

– The number of clusters to be extracted is not pre-specified.
– Solution would provide the range of clusters which the researchers
may decide from.
To select the right number of clusters we need to make judgemental call.

Nodal Methods( K mean approach)

– Requires no of cluster to be pre-specified(which we get from the

Linkage clustering)
– Typically , both methods use Euclidean distance ( Measure proximity)
to create cluster.
– Nodal method is more stable.

Data/Scales of Variables:

– Interval-scaled variable s are generally suited for cluster analysis.

– Standardisation may be necessary if the unit of measure of the
different variables are widely different from each other.

1 2 3 4 5 6 7

SA Agree MA NAND MD Disagree

SD

To find the number of clusters we need to use the agglomeration schedule.

The agglomeration schedule shows all possible solution from 1 cluster to (n-
1) clusters where n is the number of respondents.

Two Questions:

– I normally read books at home during the weekends

– I normally go out for dinners during the weekends.

R1(3,4) R2(7,7) R3(1,1) R4(7,6) R5(4,4) R6(4,3) R7(2,1) R8(1,2)

R9(3,3) R10(6,7)

Stage Cluster 1 Cluster 2 Fusion Cell

1 2 10 1

2 1 9 1

3 3 8 1

3
4 5 6 1

5 1 5 1

6 3 7 1.12

7 2 4 1.12

8 1 3 3.42

9 1 2 4.8

The biggest leap is from the stage 7 to 8 and this mean we are trying widely
separated . Hence we should segment up to 7.

Distinguished (3,8,7) (2,10,4) (1,5,9,6)

Hierarchical Cluster is not a stable cluster if the respondents changes we get

different clusters.

It might happen that two members who are near to each other are part of
different cluster and farther from its centroid.

In the above cluster the P1 is part of the cluster with centroid C1 but in
reality it is much closer to C3 similarly P2 though it is a part of C2 it is closer
to C4.
C1 C2
Anova:
The analysis of the anova table is very necessary for analysis the factors
which are signifcant. P1 P2

Assume that there are 15 factors and we have 4 Clusters. For confidence
level of 90% we tend to get some variables which have a 90% confidence
and some less than 90%.The variable with less C4
than 90% confidence are
statistically insignificant. In order
C3 to get a crisp clustering we need to ignore
the insignificant variables and do the K men cluster with significant variables
only.

K-means and derivatives

K-means clustering
The K-means algorithm assigns each point to the cluster whose center (also
called centroid) is nearest. The center is the average of all the points in the
cluster — that is, its coordinates are the arithmetic mean for each dimension
separately over all the points in the cluster.
Example: The data set has three dimensions and the cluster has two
points: X = (x1, x2, x3) and Y = (y1, y2, y3). Then the centroid Z becomes
Z = (z1, z2, z3), where z1 = (x1 + y1)/2 and z2 = (x2 + y2)/2 and z3 =
(x3 + y3)/2.
The algorithm steps are:
• Choose the number of clusters, k.
• Randomly generate k clusters and determine the cluster centers, or
directly generate k random points as cluster centers.
• Assign each point to the nearest cluster center.
• Re compute the new cluster centers.
• Repeat the two previous steps until some convergence criterion is met
(usually that the assignment hasn't changed).
The main advantages of this algorithm are its simplicity and speed which
allows it to run on large datasets. Its disadvantage is that it does not yield
the same result with each run, since the resulting clusters depend on the
initial random assignments. It minimizes intra-cluster variance, but does not
ensure that the result has a global minimum of variance.
After the K means clustering we get the final cluster centers for each factor
in each cluster. Now depending on the cluster center and the scale designed
previously we describe each cluster on the various factor .
Once description for each factor is made for each cluster we give a label
which describes the cluster the best.

MULTIDIMENSIONAL SCALING FOR BRAND POSITIONING:

MDS is primarily used to create perceptual maps of brands in a given product
category. This is used for product/brand positioning. Positioning is essentially
concerned with mapping a consumer’s mind and placing all the competing
brand of a product category in appropriate slots or ‘positions’ on it.

Perceptual maps are used for:

1. Deliberate positioning of a new brand based on ‘gaps’ in the current

map.
2. Finding out the current position of an existing brand on the map.
3. Repositioning the brand if the desired position of an existing brand and
the one perceived by consumer are different.
4. Understanding product improvements required.

Concepts:

It may possible to identify for a particular product category the important

attributes from a customer’s point of view. These attributes have an impact
on the positioning of each brand in the customer’s mind and on buying
behavior.

In the method of perceptual mapping only two attributes are taken at a time
and then the perceived position of different competing brands are plotted on
a two dimensional graph with attributes as the axes.

Such a plot may be relatively straight forward but does not/may not capture
the consumer’s mind accurately. This is because consumers think
simultaneously on multiple product dimensions/attributes rather than one
attribute at a time. So above method is only an approximation of that
process because it forces consumers to rate brands on only one attribute at
a time.

The better technique is MDS as:

1. It captures the complex interactions between attributes and brands in

a particular way.
2. Derives attributes or dimensions which explain the positions given by
consumers to various brands.

Method:

There are two methods used in MDS:

1. Attribute based.
 2. Similarity/Preference based also called similarity/dissimilarity based.

Attribute based approach:

It is similar to attribute based cluster analysis or even factor analysis.

Similarity/dissimilarity based approach:

In this approach :

1. Conceptual distance measure is used between brands being rated.

2. Distance measure could also be a ranking of distances between a
specific brand and other brands.

Procedure:

1. Customer/ respondents are provided with cards each containing the

name of two brands.
2. All pairs of brands being studied are shown.
3. No attributes are specified to customer/respondent to decide on brand
differences.
4. Customer/respondent are asked to convey their
preference/dissimilarity between brands in terms of distance in some
numerical value (say 0-10).
5. This distance or numerical value is converted into a matrix.
6. These are then analyzed after running through MDS process.
7. We then decide the no. of dimensions on which the brand needs to be
plotted. It decided upon by a measure known as Stress also called
Kruskel’s Stress which is given by the computer output for a solution in
each dimension. We get the solution with an acceptably low value of
stress in the possible numbers of dimensions.

Kruskel’s Stress is a measure of lack of fit of MDS solution for a specific

no. of dimensions. Value of Kruskel’s Stress vary from 0 to 1. For an
acceptable solution Kruskel’s stress should be less than 0.15.

8. Once the dimensions are decided these are then named. This is done
while keeping in mind:
1. The attributes of the brand
2. Their target segments by age, price, quality.
3. Attempted positioning through brand communication.
1. MDS process is run to create perceptual maps.
2. We create 2-D maps for better brand positioning.
 3. The brands are plotted on a map with a combination of dimensions as
the axes.

Derivation:

From this we derive :

1. The no. of dimensions creating differentiation and have positioning.

2. Interpretation of derived dimensions.

This is done by administering an attribute based DRAS questionnaire on a

matched sample.

From a given sample, two matched samples are formed. On one sample, the
MDS questionnaire is administered and on the other, the DRAS questionnaire
is administered. Same group may also be used, provided MDS is carried out
first and then DRAS.

MDS(non-attribute based) DRAS (attribute based)

Identification of dimensions that Brand evaluation summary on a set

consumers use to evaluate brands of attributes

Scores of each brand on each

dimension

We identify the no. of dimensions that consumers use to evaluate brands.

The respondents are asked to score each brand on each dimension. The
summary of this response is mapped on to the dimension obtained from the
MDS process to understand the constituent attributes of each dimension.
These dimension are then labeled based on dominant characteristics.

Eg:

A detergent producer desires to understand the brand positioning of 8

detergent brands as per customers perception .For this purpose they have
conducted a suitable research . In pat a MDS research was conducted in part
B a DRAS was conducted.

BRANDS

1.RIN 2 NIRMA

3 ARIEL 4 OK
5 ETA 6 WHEEL

7.TRILO 8 501 BAR

DATA SHEET

1 2 3 4 5 6 7 8

1 0 2 3 5 4 2 1 8

2 2 0 5 7 6 4 1 3

3 3 5 0 2 5 1 8 7

4 5 7 2 0 3 4 7 8

5 4 6 5 3 0 7 3 2

6 2 4 1 4 7 0 5 6

7 1 1 8 7 3 5 0 2

8 8 3 7 8 2 6 2 0

LOW HIGH

WHITENE N W R/T A S OK E
SS

SOFTON R E/T OK W A/N S

HAND

QTY T/E S/N W R OK A

REQD

CLEANS W R T/N S A E OK
COLLARS

COLOUR E T/R OK W/A N S

S LAST
LONGER

PRICE N/S T.E W R OK A

This helps in positioning product in empty spaces of positioning map

Dimensions

1st Stress = .38368

RSQ = .50566

2nd Stress = .15375

RSQ = .80545

3rd Stress = .07747

RSQ = .90540

1 Price qty required Economy

Whitene Clean colours and Cleansing
2 ss cuffs Power
soft on User Friendly
3 hand colour last ness

Numb Brand Econmy Cleansin User

er s g Power Friendly
1 rin -0.3295 -0.9897 -1.0969
2 nirma 0.9221 -1.1941 0.3353
3 airtel -1.6075 0.0716 0.697
4 ok -1.4857 1.1677 -0.5117
5 ETA 0.5147 1.5213 -0.5876
6 wheel -1.0164 -0.9334 0.7934
7 trilo 1.4188 -0.4135 -0.7093
bar50
8 1 1.5835 0.7701 1.0799

Perceptual maps are drawn with the dimensions as the axes and the brands
are plotted on it from the results derived.

ATTRIBUTE BASED PERCEPTUAL MAPPING USING DISCRIMINANT

ANALYSIS:

This technique is used to draw perceptual maps to position the brands in

space as perceived by consumers in a given product category. The attributes
are incorporated into the map as vectors. This results in a joint space map
containing perceived positions of brands and attributes.

This is used for product/brand positioning. Positioning is essentially

concerned with mapping a consumer’s mind and placing all the competing
brand of a product category in appropriate slots or ‘positions’ on it.

Perceptual maps are used for:

 1. Deliberate positioning of a new brand based on ‘gaps’ in the current
map.
2. Finding out the current position of an existing brand on the map.
3. Repositioning the brand if the desired position of an existing brand and
the one perceived by consumer are different.
4. Understanding product improvements required.

Concept:

1. It may possible to identify for a particular product category the

important attributes from a customer’s point of view. These attributes
have an impact on the positioning of each brand in the customer’s
mind and on buying behavior.
2. In the method of perceptual mapping only two attributes are taken at a
time and then the perceived position of different competing brands are
plotted on a two dimensional graph with attributes as the axes. Such a
plot may be relatively straight forward but does not/may not capture
the consumer’s mind accurately. This is because consumers think
simultaneously on multiple product dimensions/attributes rather than
one attribute at a time.
3. Also the MDS technique is used to create perceptual maps w/o using
attributes i.e. non-attribute based.
4. In field/practical situation it may not be easy for a respondent to do
paired comparisons between a large no. of brands all the time.
5. Further the requirement may be to compare our own brand with a few
(2/3/4..) other leading brands with clarity on differences.
6. In MDS we had ratings on dissimilarity between brands but in attribute
based perceptual mapping we will have ratings on attributes for the
competing brands.
7. In such cases technique to create perceptual maps could be attribute
based using discriminating analysis.
8. This perceptual map is convenient to use to figure out which
dimensions (axes) and which brands score well on these
dimensions/attributes.
9. Arrows representing attribute vectors can be drawn using standardized
discriminant scores on the discriminant functions which serve as axes
in the plot.

Method:

There are two ways to draw the attribute based perceptual maps:
 1. Factor analysis.
2. Discriminant analysis.

We will use discriminant analysis.

Procedure:

1. Brands to be evaluated are short-listed.

2. The attributes to evaluate them on are finalized based on prior
research (exploratory research).
3. DRAS based questionnaire created using questionnaire design
technique.
4. For analysis, data sheet needs to be arranged in a specific manner.
5. Discriminant functions:
• No. of discriminant functions to be selected depends on their
Eigen value.
○ Eigen value is the amount of variance the discriminant
function explains from the original data.
○ Eigen value should be greater than 1.
• No. of discriminant functions to be used is also determined by
the Wilkis Lambda. WL should be < 0.5.
1. Based on the absolute correlation between attribute and discriminant
function we group the attributes to the respective discriminating
function. This is shown by the structure matrix developed in the
output.
2. Perceptual maps are drawn with disc. functions as the axes. Brands are
positioned and attributes are shown as vectors.

Eg:

Case :
A chocolate producer desire to understand the brand positioning of three
leading Chocolate manufacturers as per consumer perception . three brands
are:
Brand 1 = Nestle
Brand 2= Cadbury
Brand 3 = Amul
To determine this they initially conducted a preliminary research and identify
the variable that can influence consumer preferences
Variable identified are
 a) Price
b) Quality apart from taste
c) Availability
d) Packaging
e) Taste

Function at group centroid

1 2 *3 *3
Availibilit 0.664101 0.2944685 1.9923 0.8834
y 044 09 03 06
- -
0.516883 0.3364633 1.5506 1.0093
Quality 141 53 49 9
-
Packagin 0.267833 0.2032347 -
g 31 9 0.8035 0.6097
0.431007 0.6683053 1.2930 2.0049
Taste 439 36 22 16
- -
0.044052 0.2345712 0.1321 0.7037
Price 936 65 6 14
f)
g)
h)
i)
j)
k) Q5 interpret the map to create the positioning statement of each brand
as per consumer perception
l) Justify ur answers
m)
n) Answer :
o) Nestle : strong in convenience ,and taste is not yet fully accepted and
its not negative either
p) Cadbury ’s: Strong on value for money ,but low on Convince scale
worms controversy still remember, availability in developing market
suffers
q) Amul: it is in 3rd quadrant so called ambiguous positioning
Candidate for a repositioning strategy

Brand Price Quality Availibility Packagin Taste

 g

1 12 34 500 5 18

1 11 35 234 4 15

1 10 36 250 4 14

1 13 22 345 5 12

1 12 23 432 3 13

2 10 14 234 2 15

2 11 17 231 3 11

2 15 23 45 4 10

2 13 14 35 3 12

2 12 15 25 2 10

3 10 22 75 4 8

3 12 24 80 4 7

3 13 28 90 5 10

3 11 17 96 2 12

3 11 18 59 2 6

r) Scale 20 points 50 pts 500 pts 5pts

20 pts
s) Higher points more favorable.

CONJOINT ANALYSIS:
After the concept development is done in NPD ,using product positioning maps and GAP
analysis . concept testing is done . its tested in two parts
1.

a) Communicability
b) Belief
 c) Need level
d) Gap
e) Perceived Value
f) Purchase intent
g) User groups/puch occ/purch.freq.

2. Conjoint analysis.

The CDV of a product is determined by two things:

a) The relative Importance of an attribute to a consumer

b) The level of that attribute in the product

The Level is determined by Part-worth and the Importance is given by Utility (by convention)

So mathematically CDV is given by

CDV = ΣUi*PWij
Conjoint analysis is used to determine:

a) the utility or the relative importance of the key attributes to a consumer

b) the part worth of each level of each attribute to the consumer.

Based on this a new product that delivers the highest CDV can be developed.

Example

Power: 8bhp,10bhp,12bhp,

Milage 65,75,85 Kmpl

Price : 30,45,60 K

Style: S (S=y) ,O(s=N)

Comfort : S(c=y) ,O(C=N)

With all these option we can have 108 combination are possible so we can have 105 New
Models .

To ask the respondents to evaluate 108 options would be very tedious hence we need to
simplify the options this is achieved by eliminating:

a) the options that consumer would not buy because existing products are superior to
them
b) Options which are absolutely impractical for the firm to provide giving current state
of technology .

Underlying Concept:
If consumers are asked attribute by attribute about their
preferences, then they are likely to indicate that they desire the
best of all the benefits at the lowest price .This may not be
practically possible. Hence we need to be able to understand the
tradeoffs that the consumer is willing to make.

So we can eliminate few impossible options

Eg. 1)Price 30k,S=Y, 18
2) Price 60K,S=N .18
3) Power =12bhp ,Mil=85kmpl :8
4)Power :8bhp,Mil =66Kmpl :8
So almost 52 options are wiped off based on data and analysis present.

S.No. Power Mileage Price Style Comfort Rank Rating Rank Ratin
g

1 8 65 60 N Y 14 12 50

2 8 75 30 Y N 18 1 7 78

3 8 85 45 N N 12 0.833333 9 66
33

4 10 65 60 Y N 16 0.625 18 15

5 10 75 30 N Y 5 2 8 72

6 10 85 45 N N 6 1.666666 15 32
67

7 12 65 30 N N 13 0.769230 4 90
 77

8 12 75 45 Y N 8 1.25 6 80

9 12 85 60 N Y 2 5 5 84

10 8 65 45 N N 7 1.428571 10 52
43

11 8 75 60 N N 17 0.588235 16 28
29

12 8 85 30 Y Y 13 0.769230 1 95
77

13 10 65 30 N N 4 2.5 13 42

14 10 75 45 Y Y 11 0.909090 11 50
91

15 10 85 60 N N 3 3.333333 17 20
33

16 12 65 45 Y Y 15 0.666666 2 92
67

17 12 75 60 N N 1 10 14 38

18 12 85 30 N N 10 1 3 90

Dummy Variable Linear regression using effects coding:

Consider rating as indicated to consider rank invert them,

Treat One level of each attribute as a dummy variable i.e. omit one level of each attribute
from the regression model. Which level to omit is the choice of the researcher.
In this case the level omitted are:
Power 10bhp
Mileage 75Kmpl
Price 60 K
Style NO
Comfort No

Then create a basic regression model

Y= a1 (12bhp) + a2(8bph) + a3(65kmpl) + a4(85kmpl) + a5(30K) + a6(45K) + a7(S=Y) +
a8(C=Y)

In the regression model code independent variables for each product option as follows:
+1 => level of attribute is present in the model and is also present in the product option
being rated or ranked.
0 => Level of attribute is present in the model but is absent in the product option being
rated or ranked .
-1=> Level of attribute is absent in the regression model but is present in a product option
being rated or ranked .
At each stage we try to map the product option onto the regression model .

Codes are interpreted as coefficients in regression model rating or inverse ranking is a

dependent variable coding values for each level of each attributes are independent
variable .
Run ordinary least square regression analysis for data set

The coeff. Obtained indicate the contribution made by a particular level of an attribute
towards the rating or inverted ranking of the whole product. These are path works of the
levels of each attribute present in the regression model.

To determine path works of dummy varibale we use effects coding .

Method: some of path works for any attribute is equal to zero .

Inverted Rank
12bhp 3.833333333
8bhp 0.333333333
10bhp -4.166666667
65Kmpl -0.333333333
85Kmpl 1.166666667
75Kmpl -0.833333333
30K 3.5
45k 0.666666667
60K -4.166666667
S=Y 0.75
S=N -0.75
C=Y 2.25
C=N -2.25

To determine Relative importance of each attribute:

Relative importance is the difference between the Part worths of most valued
and least valued level of a particular attribute relative to same difference
associated with other attributes.

Logic:
A large difference in part worths indicates higher influence of that particular attr.
On respondent attitude or buyoing behavior.
-4.16 0 4.16
Power
-.75 0 .75 Style
This is the analysis of response obtained from one respondent:
Attribut Large Smalles Differn
es st t ce Rel Imp.
Power 3.83 -4.17 7.99 0.34
Mileage 1.17 -0.83 2.01 0.08
Price 3.50 -4.17 7.67 0.32
Style 0.75 -0.75 1.5 0.06
Comfort 2.25 -2.25 4.5 0.19
Total
Diff 23.67

Combining responses:

U cannot combine responses across segment.

COMBINATION OF RESPONSES CAN ONLY HAPPEN WITHIN THE SEGMENT .

Technically the purest procedure is to calculate part worths for each respondent and then
avg it out
But its time consuming .
More Practical take average of ratings across respondents within segment.

Creating a New product

Analysis : segemtentation : Factor analysis

Targetting : GE
Positioning : MDS ,ABPM,Dis Analysis

NPD : conjoint analysis

Research
Set objective
Exploratory
Secondary data collection
Questionnaire design(scales,DRAS)
Sampling
Data Collection
Data Reduction
Data Analysis
Reports ch 22
Report findings and recommendations in line with research objectives.