Factor Analysis

Factor analysis is a statistical method used to describe variability among observed, correlated variables in terms of a potentially lower number of unobserved variables called factors. It is a data reduction technique where in a group of statements or constructs can be classified by few factors. KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Approx. Chi-Square Bartlett's Test of Sphericity df Sig. Rotated Component Matrix
Component F1 This brand provides excellent customer service and support Has variety of keypads that makes typing easy I have heard good things or good reviews about this brand of smartphones Has a good camera resolution Has a reliable battery life The brand has creative or innovative applications and games This brand makes products that are user friendly I trust this brand of smartphone This brand enhances my image The stores offer good cash back schemes for exchange of the smartphone This brand has good value for money phones The smartphone brand has a good collection of accessories This smartphone brand comes in variety of colors willing to pay premium price for this smartphone brand This brand is easily available This brand has a wide network of service centres This brand offers smartphone that are durable, resistant to dust and water The smartphone from this brand crash less frequently The EMI schemes of the brand are easy on the pocket I bought the smartphone only to compete with my peers Total % of Variance Cumulative % 0.815 0.807 0.729 0.727 0.716 0.635 0.798 0.774 0.749 0.672 0.653 0.767 0.767 0.760 0.745 0.825 0.670 0.618 0.745 0.729 2.275 11.376 74.534 0.543 F2 F3 F4 F5

0.751 687.509 190 0.000

3.931 19.654 19.654

3.329 16.645 36.299

3.036 15.180 51.479

2.336 11.678 63.157

H0: The original correlation matrix is an identity matrix. H1: The original correlation matrix is not an identity matrix. Interpretation: The Bartletts sphericity value is found to be .000 which is less than 0.05 hence we reject the null hypothesis in favour of the alternate hypothesis i.e the correlation matrix is not an identity matrix. Hence factor analysis can be carried out.

Naming of Factors Factor Names Variables This brand provides excellent customer service and support Has variety of keypads that makes typing easy I have heard good things or good reviews about this brand of smartphones Has a good camera resolution Has a reliable battery life The brand has creative or innovative applications and games This brand makes products that are user friendly I trust this brand of smartphone This brand enhances my image The stores offer good cash back schemes for exchange of the smartphone This brand has good value for money phones The smartphone brand has a good collection of accessories Aesthetics This smartphone brand comes in variety of colors willing to pay premium price for this smartphone brand This brand is easily available This brand has a wide network of service centres This brand offers smartphone that are durable, resistant to dust and water The smartphone from this brand crash less frequently Factor Loadings 0.815 0.807 0.729 0.727 0.716 0.635 0.798 0.774 0.749 0.672 0.653 0.767 0.767 0.760 0.745 0.825 0.670 0.618

Technical Specifications

Brand Image

Service and support

The EMI schemes of the brand are easy on the pocket Ease of Acquiring I bought the smartphone only to compete with my peers

0.745 0.729

Interpretations: 1) Bartletts Test: The p-value or the significance value of the Bartletts test is to be analyzed. Bartletts test is the indication of correlation between the variables taken for the factor analysis. The correlation matrix of the variables should not be an identity matrix,that means if the p value is less than 0.05 this implies that the correlation matrix is not an identity matrix indicating that the variables taken for the study are useful for Factor analysis. In this case the Bartletts sphericity value is found to be .000 which is less than 0.05 hence we reject the null hypothesis in favour of the alternate hypothesis i.e the correlation matrix is not an identity matrix.

2) KMO Sampling Adequacy test: This is another indicator for the appropriateness of selected variables of the study. Its value ranges from 0 to 1. Any KMO value closer to 1 indicates that the selected variables are appropriate for factor analysis (Closer to 1 or greater than 0.5 is ideal). In this case the KMO value is found to be 0.751 which signifies that the appropriateness of selected variables of the study is good. A value close to 1 also signifies that pattern of correlations are compact and the factor analysis will yield distinct factors.

3) Total variance explained: Factor 1 accounts for 19.65 % of total variance, Factor 2 accounts 16.64 % of total variance, Factor 3 accounts for 15.18% of total variance, Factor 4 accounts for 11.67 % of total variance, Factor 5 accounts for 11.37 % of total variance. 25.47% of the data was lost due to factor analysis; the factor analysis was successful in explaining the 74.53 % of total variance. 4) Eigen Values: The factors were extracted based on Eigen values greater than 1.Eigen values associated with each factor represent the variance explained by that factor.

Factors Explanation
The factor Technical Specifications is composed of variables: This brand provides excellent customer service and support, Has variety of keypads that makes typing easy, I have heard good things or good reviews about this brand of smartphones, Has a good camera resolution, Has a reliable battery life and The brand has creative or innovative applications and games. All these variables have underlying or inherent reference to technology. From the factor analysis, it is clear that factor technical specifications is the most important reason for customers while purchasing a smartphone. People give more emphasizes on technology than any other factors as it is evident from the factor analysis report. The factor Brand Image is composed of variables: This brand makes products that are user friendly, I trust this brand of smartphone, This brand enhances my image, The stores offer good cash back schemes for exchange of the smartphone, and This brand has good value for money phones All these variable have an underlying reference to image and value derived from the brand. Brand Image is the second most important factor when it comes to purchase of a smartphone. The factor Aesthetics is composed of variables The smartphone brand has a good collection of accessories, This smartphone brand comes in variety of colors, willing to pay premium price for this smartphone brand and This brand is easily available. All these variables talk about physical aspects of the product like color and appearance; hence the factor has been named Aesthetics. Aesthetics is the third most important factor which influences a consumer when it comes to purchase of a smartphone. The factor Service and Support is composed of variables This brand has a wide network of service centres, This brand offers smartphone that are durable, resistant to dust and water, The smartphone from this brand crash less frequently. All these variables have an underlying reference to the durability of the product and the service rendered by the brand to its consumers; hence the factor has been named Service and Support. Service and Support is the fourth most important factor which influences a consumer when it comes to purchase of a smartphone. The factor Ease of acquiring is composed of variables The EMI schemes of the brand are easy on the pocket and I bought the smartphone only to compete with my peers. The two variables exhibit the Ease of Acquiring a brand has over another due

to schemes, EMI facilities and also superior features. Ease of acquiring is the fifth most important factor which influences a consumer when it comes to purchase of a smartphone.

Discriminant analysis First table to look for : Classification Results table :

Classification Results

Predicted Group Membership Loyalty Original Count loyal disloyal % loyal disloyal loyal 8 0 88.9 .0 disloyal 1 9 11.1 100.0 Total 9 9 100.0 100.0

a. 94.4% of original grouped cases correctly classified.

It is used to find the accuracy of the accuracy of the discriminant function in grouping the respondents. In the above example, our discriminant analysis or function is able to separate two groups of customers with a accuracy level of 94.4% 1 member who was supposed to be under group 1 (loyal) has been grouped under group 2 (disloyal).

Wilks lambda

Wilks' Lambda Test of Functio n(s) 1 Wilks' Lambda .337 Chi-square 15.760 df 3 Sig. .001

IF the p value is less than 0.05 then the discriminant function is highly significant.( this is opposite if our conventional notion of how we deal with p values). The value of

wilks lambda should be close to zero. If you get very small amount of the wilks lambda then the discriminant power is said to be very high.

Standardized canonical discriminant function Coefficient.

Canonical Discriminant Function Coefficients Function 1 Frequency AvgPurchase Years (Constant) .092 .000 .140 -4.958

Unstandardized coefficients

Here the coefficient value represents the relative importance of independent variables.

Using this we will write with the discriminant function.

Function at Group centroids

Functions at Group Centroids Function Loyalty loyal disloyal 1 -1.322 1.322

Unstandardized canonical discriminant functions evaluated at group means

This table gives the mean discriminant score for two categories of respondents.by looking at this we can say loyal customer will have negative discriminant score,

similar if the discriminant score as positive a customer can be considered as dis loyal customer.