session 4 focus group should be homogenous should contain 4-5 members 1 focus group per segment FACTOR ANALYSIS

AND CLUSTER ANALYSIS 1. variable blocks: number of dimensions. these are called factors. take variables per each dimension in Dell case. think carefully of which dimensi ons you want to analyze. 2. cluster analysis: select variables on which to segment. decide number of segm ents. 3. reporting: average [summary variables] by segment. variable blocks e.g. ratings, usage etc. within usage, there may be sub blocks sub blocks made by segregating ppl e.g. ppl who dl movies also dl pics. can comb ine in one block like this. see correlation b/w chatting, dl, etc Dell questionnaire has 5 variable blocks. 7 sub blocks look at each variable block by itself. e.g. ppl who are heavy users are chat hea vy as opposed to movie users. internet usage has 3 factors (blocks) 3 sub blocks in Q10. satisfaction has 3 sub blocks loyalty has 2 . note: price how many sub blocks?? (2) we see lifestyle ==> 3 major variables coming out. step 2: which variables i want to have... for example if looking at usage and innovative ness... based on these two.. i want to cluster segments. more variables i have more segments i can make e.g. usage is a variable, price, performance, convenience etc. 3-4 segments enough (note: what does this mean???) step 3: Analyze --> dimension reduction --> all "rate" questions (30 rating Qs) --> select variables into --> extraction --> select fixed number of factors = 2 --> rotation --> varimax --> rotated solution . scores --> save as variables --> OK ==> results are 3 tables to look at . 2 sets of highly correlated variables. e.g. see high correlation b/w performance variables.. high correlation b/w conve nience variables etc. SPSS created 2 new variables convenience and technical (pe rformance). all this is step 1. in usage, there are 3 variables . use downloading, chat, job trip also 1 factor (overall). this is also step 1

now:- classify --> K means cluster --> select variables --> (in dell case we hav e to do on price, innovation, usage, convenience, technical (performance), satis faction --> number of clusters --> 4 --> save --> OK --> result = number of case s in each cluster. cluster: 1 2 3 4 look at final cluster 1 4 usage convenience technical satisfaction 0.58 ... ... ... 0.15 ... 2 3

Analyze --> K means --> cluster number in independent list + conv, tech, satisfa ction, usage, education, age, gender, income go in dependent list means option --> mean only result: income:- cluster ==> 3 are richer age ==> 4 are youngest group 2 are satisfied ones on diagram (satisfaction against usage):satisfaction cluster 2 cluster 1 [happy face, most satisfied most usage] |

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____________________________|___________________ _______________ cluster 3 | | | | tips to read Malhotra for factor analysis... session end.. cluster 4 [sad face, worst off] usage