DELL CASE ANALYSIS

ANOVA

Are the three price-sensitive groups based on q9_5per as derived in Chapter 14 different in terms of each of the evaluations
of Dell (q8_1 to q8_13)? Interpret the results.

(The three price sensitive groups are: Would have purchased, Might or might not have purchased and Would not have
purchased)

As the three price-sensitive groups based on q9_10per as derived in Chapter 14 different in terms of each of the evaluations
of Dell (q8_1 to q8_13)? Interpret the results.

Do the demographic groups as recoded in chapter 14 (recoded q11, q12, q13) and q14 differ in terms of overall satisfaction
with Dell computers (q4)? Interpret the results.

(The demographic groups as recoded in Chapter 14 are: Education: High School Graduate or less, College or technical School,
College graduate or higher. Age: 18-29, 30-39, 40-49 and 50 & older. Income: Under 30,000, 30000-49,999, 50,000-74,999,
75000-99,999 and 100000 & over. Gender: Male and Female)

Do the demographic groups as recoded in Chapter 14 (recoded q11, q12, q13) and q14 differ in terms of likelihood of
choosing Dell computers (q6)? Interpret the results.

(The demographic groups as recoded in Chapter 14 are: Education: High School Graduate or less, College or technical School,
College graduate or higher. Age: 18-29, 30-39, 40-49 and 50 & older. Income: Under 30,000, 30000-49,999, 50,000-74,999,
75000-99,999 and 100000 & over. Gender: Male and Female)

CONDITIONS & SPSS COMMAND FOR

ANOVA
SPSS Command for N-Way ANOVA
Analyse>General Linear
Model>Multivariate/Univariate
Move the dependent variable in the dependent
variable box.
Move independent variable in the box.
Okay

Conditions for ANOVA

The dependent variable should be metric.
In the above cases they are, evaluation of dell,
overall satisfaction, likelihood of choosing dell
computers.
Independent variable should be categorical or
non-metric.
In the above cases they are, three price sensitive
groups and demographic groups.

OUTPUT

Are the three price-sensitive groups based on q9_5per as derived in Chapter 14 different in terms of each of the evaluations of Dell
(q8_1 to q8_13)? Interpret the results. dell output\Dell 16 ANOVA 1.spv

(The three price sensitive groups are: Would have purchased, Might or might not have purchased and Would not have purchased)

As the three price-sensitive groups based on q9_10per as derived in Chapter 14 different in terms of each of the evaluations of Dell
(q8_1 to q8_13)? Interpret the results. dell output\Dell 16 ANOVA 2.spv

Do the demographic groups as recoded in chapter 14 (recoded q11, q12, q13) and q14 differ in terms of overall satisfaction with Dell
computers (q4)? Interpret the results. dell output\Dell 16 ANOVA 3.spv

(The demographic groups as recoded in Chapter 14 are: Education: High School Graduate or less, College or technical School, College
graduate or higher. Age: 18-29, 30-39, 40-49 and 50 & older. Income: Under 30,000, 30000-49,999, 50,000-74,999, 75000-99,999 and
100000 & over. Gender: Male and Female)

Do the demographic groups as recoded in Chapter 14 (recoded q11, q12, q13) and q14 differ in terms of likelihood of choosing Dell
computers (q6)? Interpret the results. dell output\Dell 16 ANOVA 4.spv

(The demographic groups as recoded in Chapter 14 are: Education: High School Graduate or less, College or technical School, College
graduate or higher. Age: 18-29, 30-39, 40-49 and 50 & older. Income: Under 30,000, 30000-49,999, 50,000-74,999, 75000-99,999 and
100000 & over. Gender: Male and Female)

RESULTS
For answering the above questions we look into the ANOVA Table provided and look into the F-Test
Univariate statistics for determining the amount of variability and its respective significance value.

Only q8_1, q8_3, q8_4, and q8_12 are different for the three groups based on q9_5per. In general, those who
would have purchased exhibit the highest ratings and those who would not have purchased exhibit the
lowest ratings.

Only q8_1, q8_2, q8_3, and q8_4 are different for the three groups based on q9_10per. In general, those who
would have purchased exhibit the highest ratings.

None of the demographic variables differ in terms of overall satisfaction with Dell.

None of the demographic variables differ in terms of likelihood of recommending Dell.

REGRESSION
Can the overall satisfaction (q4) be explained in terms of all 13 evaluations of Dell (q8_1 to q8_13)?
Interpret the results.
Can the likelihood of choosing Dell (q6) be explained in terms of all 13 evaluations of Dell (q8_1 to
q8_13)? Interpret the results.
Can price sensitivity ratings of q9_5per be explained in terms of all 13 evaluations of Dell (q8_1 to
q8_13) when the independent variables are considered simultaneously? Interpret the results.
Can price sensitivity ratings of q9_10per be explained in terms of all 13 evaluations of Dell (q8_1 to
q8_13) when the independent variables are considered simultaneously? Interpret the results.

CONDITIONS & SPSS COMMAND FOR

REGRESSION
SPSS Command for Regression

Analyse>Regression>Linear

Move the dependent variable in the dependent variable

box.

Move independent variable in the box.

Select Enter in the Method box.

Click Statistics and check Estimates under Regression

Coefficients.

Check Model Fit.

ZRESID in the Y box and ZPRED in the X box.

Click Okay

Conditions for Regression

The dependent variable should be metric.
In the above cases it is overall satisfaction,
likelihood of choosing dell, price sensitivity
ratings etc.
Independent variable should also be metric.
In the above cases it is evaluation of dell.

OUTPUT
Can the overall satisfaction (q4) be explained in terms of all 13 evaluations of Dell (q8_1 to q8_13)?
Interpret the results. dell output\Dell 17 Regression 1f.spv
Can the likelihood of choosing Dell (q6) be explained in terms of all 13 evaluations of Dell (q8_1 to
q8_13)? Interpret the results. dell output\Dell 17 Regression 2f.spv
Can price sensitivity ratings of q9_5per be explained in terms of all 13 evaluations of Dell (q8_1 to
q8_13) when the independent variables are considered simultaneously? Interpret the results. dell
output\Dell 17 Regression 3f.spv
Can price sensitivity ratings of q9_10per be explained in terms of all 13 evaluations of Dell (q8_1 to
q8_13) when the independent variables are considered simultaneously? Interpret the results. dell
output\Dell 17 Regression 4f.spv

RESULTS

For answering the above questions we look into the table showing the standardized and unstandardized regression
coefficients and its respective significance value.

The regression is significant with an R square of 0.324 and an adjusted R square of 0.299. The coefficients for q8_4 and q8_8
are significant and negative. Thus, higher evaluations on these factors lead to greater satisfaction with Dell. Note that
satisfaction is measured so that lower numbers denote higher satisfaction whereas higher numbers denote more favorable
evaluations on q8_1 to q8_13. Hence, the negative sign of the coefficients.

The regression is significant with an R square of 0.191 and an adjusted R square of 0.161. The coefficients for q8_1, q8_4 and
q8_13 are significant and negative. The p value for the coefficient for q8_13 is 0.052. Thus, higher evaluations on these factors
lead to greater likelihood choosing Dell. Note that likelihood of choosing Dell is measured so that lower numbers denote higher
likelihood whereas higher numbers denote more favorable evaluations on q8_1 to q8_13. Hence, the negative sign of the
coefficients.

The regression of q9_5per on q8_1 to q8_13 is not significant. Thus, none of the evaluations of Dell explain the variation in
q9_5per. Note that the coefficient for q8_4 is significant but this does not mean much as the overall regression is not
significant.

The regression of q9_10per on q8_1 to q8_13 is not significant. Thus, none of the evaluations of Dell explain the variation in
q9_10per.

DISCRIMINANT ANALYSIS

Do the two group discriminant analysis with the two overall satisfaction groups derived based on the
recoding of q4 (as specified in chapter 14) as the dependent variable be explained in terms of all 13
evaluations of Dell (q8_1 to q8_13) as the independent variable? Interpret the results.
(The two overall satisfaction groups derived are: very satisfied as one group and rest as second group)

CONDITIONS & SPSS COMMAND FOR

DISCRIMINANT ANALYSIS
SPSS Command for Discriminant Analysis

Analyse>Classify>Discriminant Analysis

Move the dependent variable in the grouping variable box.

Click Define range. Enter 1 for minimum and based on the

group define the range for the maximum. Click continue.

Move independent variable in the independent variable box.

Select Enter independent together (default).

Click Statistics In the pop up window in the descriptive box

check means and univariate anovas. In the Matrices box check
Within-Group correlations. Click continue.

Click Classify in the pop-up window in the Prior probabilities

box check All Groups Equal (default). In the Display box check
Summary Table and Leave-One_Out Classification. In the Use
Covariance Matric box check Within-Groups. Click Continue.

Click Okay

Conditions for Discriminant

The dependent variable should be categorical.
In the above cases it is overall satisfaction
Independent variable should also be metric.
In the above cases it is evaluation of dell.

OUTPUT

Do the two group discriminant analysis with the two overall satisfaction groups derived based on the
recoding of q4 (as specified in chapter 14) as the dependent variable be explained in terms of all 13
evaluations of Dell (q8_1 to q8_13) as the independent variable? Interpret the results. dell output\Dell
18 Discriminant 1.spv

RESULTS

For answering the above questions we look into the table showing the Canonical Discriminant Functions
and Standardized Canonical Discriminant Function Coefficients.

Given two groups, one discriminant function is extracted, which is significant. 73.6% of original grouped cases
and 71.1% of cross-validated grouped cases are correctly classified. The standardized canonical discriminant
function coefficients for q8_4, q8_6, and q8_8 are larger than those for the other variables indicating the
influence of these variables.

FACTOR ANALYSIS

Can evaluations of Dell (q8_1 to q8_13) be represented by a reduced set of factors? If so, what would
be the interpretation of these factors? (Hint: Do a principal components analysis with varimax
rotation)? Interpret the results.
Can the Market Maven, Innovativeness and opinion leadership items (variables q10_1 through q10_13)
be represented by a reduced set of factors? If so what would be the interpretation of these factors?
(Hint Do a principal components analysis with varimax rotation).

CONDITIONS & SPSS COMMAND FOR

FACTOR ANALYSIS
SPSS Command for factor Analysis

Analyse>Data reduction>Factor Analysis

Move the dependent variable in the grouping variable box.

Move all the variable in the variables box.

Click on descriptive. In the pop-up window, in the statistics

box check initial solution. In the correlation matric check KMO
and Bartletts test and also check reproduced. Click continue.

Click on extraction. In the pop-up window, for method select

principal components (default). In the analyse box check
correlation matrix. In the extract box, select based on
Eigenvalue and enter 1 for Eigenvalues greater than box. In
the display box check unrotated factor solution. Click
continue.

Click on scores. In the pop-up window check display factor

score coefficient matric. Click continue.

Click Okay

Conditions for factor analysis

There is no distinction between dependent and
independent variable.

OUTPUT

Can evaluations of Dell (q8_1 to q8_13) be represented by a reduced set of factors? If so, what would
be the interpretation of these factors? (Hint: Do a principal components analysis with varimax
rotation)? Interpret the results. dell output\Dell 19 Factor Analysis 1.spv
Can the Market Maven, Innovativeness and opinion leadership items (variables q10_1 through q10_13)
be represented by a reduced set of factors? If so what would be the interpretation of these factors?
(Hint Do a principal components analysis with varimax rotation). dell output\Dell 19 Factor Analysis
2.spv

RESULTS

For answering the above questions we look into the table showing eigen value. Cumulative variance.
KMO test and Barletts test. We look into rotated factor matrix and then based on the loading of factors
we determine the dimensions and label the dimensions for easy interpretation.

The KMO and Bartletts test indicate that factor analysis is appropriate. Three factors are extracted. Based on the rotated
components matrix, factor 1 can be interpreted as an overall product, service, and value factor, factor 2 can be interpreted as
bundling and assembly, and factor 3 as ease of ordering and ease of accessing technical support.

The KMO and Bartletts test indicate that factor analysis is appropriate. Four factors are extracted. Based on the rotated
components matrix, factor 1 can be interpreted as information provider, factor 2 can be interpreted as innovator and early
adopter, factor 3 as opinion leader, and factor 4 as negative attitude toward innovation and experimentation.

CLUSTER ANALYSIS

How would you cluster the respondents based on the evaluations of Dell (q8_1 to q8_13)? Interpret the
results.
How would you cluster the respondents based on Market Maven, Innovativeness and opinion
leadership items (variables q10_1 through q10_13)? Interpret the resulting clusters.

CONDITIONS & SPSS COMMAND FOR

CLUSTER ANALYSIS
SPSS Command for Cluster Analysis

Analyse>Classify>Hierarchical cluster Analysis

Analyse>Classify>K-Means cluster Analysis

Move all the variables into the variable box.

In the cluster box check cases (default option). In the display box
check statistics and plots (default option).

Click on statistics. In the pop-up window, check agglomeration

schedule. In the cluster membership box check range of solutions.
Then for minimum no of clusters enter 2 and maximum enter 4.
click continue.

Click on plots. In the pop-up window, check dendorogram. In the

icicle box check all clusters (default). In the orientation box, check
vertical. Click continue.

Click on method. For cluster method select wards method. In the

measure box check interval and select squared Euclidean distance.
Click continue.

Click Okay

Conditions for Cluster Analysis

There is no distinction between dependent and
independent variable.

OUTPUT

How would you cluster the respondents based on the evaluations of Dell (q8_1 to q8_13)? Interpret the
results. dell output\Dell 20 Clustering 1.spv, dell output\Dell 20 Cluster K-Means 1.spv
How would you cluster the respondents based on Market Maven, Innovativeness and opinion
leadership items (variables q10_1 through q10_13)? Interpret the resulting clusters. dell output\Dell 20
Clustering 2.spv, dell output\Dell 20 Cluster K-Means 2.spv

RESULTS

For answering the above questions we look into the table showing cluster distances. Cluster centers and
dendorogram then determine the profile of the clusters.

Hierarchical clustering using Wards procedure indicates that a four cluster solution is appropriate. This is followed by K-Means
clustering, selecting a four cluster solution. The resulting clusters contain 48, 83, 45, and 153 respondents.

Hierarchical clustering using Wards procedure indicates that a four cluster solution is appropriate. This is followed by K-Means
clustering, selecting a four cluster solution. The resulting clusters contain 119, 95, 64, and 72 respondents.

MULTI-DIMENTIONAL SCALING

Explain in detail the process of conducting MDS.

Explain the process of conducting Conjoint Analysis.
Relationship among MDS, Factor Analysis and Discriminant Analysis.

MULTIDIMENSIONAL SCALING
(MDS)
Multidimensional scaling (MDS) is a class of procedures for
representing perceptions and preferences of respondents
spatially by means of a visual display.

Perceived or psychological relationships among stimuli are

represented as geometric relationships among points in a
multidimensional space.
These geometric representations are often called spatial maps.
The axes of the spatial map are assumed to denote the
psychological bases or underlying dimensions respondents use to
form perceptions and preferences for stimuli.

STATISTICS AND TERMS ASSOCIATED WITH MDS

Similarity judgments. Similarity judgments are ratings on all possible

pairs of brands or other stimuli in terms of their similarity using a
Likert-type scale.
Preference rankings. Preference rankings are rank orderings of the
brands or other stimuli from the most preferred to the least preferred.
They are normally obtained from the respondents.
Stress. This is a lack-of-fit measure; higher values of stress indicate
poorer fits.
R-square. R-square is a squared correlation index that indicates the
proportion of variance of the optimally scaled data that can be
accounted for by the MDS procedure. This is a goodness-of-fit
measure.

STATISTICS AND TERMS

ASSOCIATED WITH MDS

Spatial map. Perceived relationships among brands or other stimuli

are represented as geometric relationships among points in a
multidimensional space called a spatial map.
Coordinates. Coordinates indicate the positioning of a brand or a
stimulus in a spatial map.

Unfolding. The representation of both brands and respondents as

points in the same space is referred to as unfolding.

CONDUCTING MULTIDIMENSIONAL
SCALING
Fig. 21.1
Formulate the Problem

Obtain Input Data

Select an MDS Procedure
Decide on the Number of Dimensions
Label the Dimensions and Interpret
the Configuration

Assess Reliability and Validity

CONDUCTING MULTIDIMENSIONAL
SCALING
FORMULATE THE PROBLEM

Specify the purpose for which the MDS results would be used.
Select the brands or other stimuli to be included in the analysis. The number of
brands or stimuli selected normally varies between 8 and 25.
The choice of the number and specific brands or stimuli to be included should be
based on the statement of the marketing research problem, theory, and the
judgment of the researcher.

INPUT DATA FOR MULTIDIMENSIONAL SCALING

Fig. 21.2

MDS Input Data

Perceptions

Direct (Similarity
Judgments)

Preferences

Derived (Attribute
Ratings)

CONDUCTING MULTIDIMENSIONAL
SCALING:
OBTAIN INPUT DATA

Perception Data: Direct Approaches. In direct approaches to gathering perception data, the respondents are asked to judge how
similar or dissimilar the various brands or stimuli are, using their own criteria. These data are referred to as similarity judgments.

Very

Very

Dissimilar

Similar

Crest vs. Colgate

Aqua-Fresh vs. Crest

Crest vs. Aim

1 2

.
.
.
Colgate vs. Aqua-Fresh 1

The number of pairs to be evaluated is n (n -1)/2, where n is the number of stimuli.

SIMILARITY RATING OF TOOTHPASTE BRANDS

Table 21.1

Aqua-Fresh
Crest
Colgate
Aim
Gleem
Plus White
Ultra Brite
Close-Up
Pepsodent
Sensodyne

Aqua-Fresh

Crest

Colgate

Aim

Gleem

Plus White

Ultra Brite

Close-Up

5
6
4
2
3
2
2
2
1

7
6
3
3
2
2
2
2

6
4
4
2
2
2
4

5
4
3
2
2
2

5
5
6
6
4

5
5
6
3

6
7
3

6
4

Pepsodent Sensodyne

CONDUCTING MULTIDIMENSIONAL
SCALING:
OBTAIN INPUT DATA

Perception Data: Derived Approaches. Derived approaches to collecting perception

data are attribute-based approaches requiring the respondents to rate the brands or stimuli
on the identified attributes using semantic differential or Likert scales.
Whitens

Does not

teeth

___ ___ ___ ___ ___ ___ ___ ___ ___ ___

Prevents tooth

decay

whiten teeth

Does not prevent

___ ___ ___ ___ ___ ___ ___ ___ ___ ___

tooth decay

.
.
.
.
Pleasant
tasting

Unpleasant
___ ___ ___ ___ ___ ___ ___ ___ ___ ___

tasting

If attribute ratings are obtained, a similarity measure (such as Euclidean distance) is derived
for each pair of brands.

CONDUCTING MULTIDIMENSIONAL
SCALING: OBTAIN INPUT DATA DIRECT
VS. DERIVED APPROACHES
The direct approach has the following advantages and disadvantages:
The researcher does not have to identify a set of salient attributes.
The disadvantages are that the criteria are influenced by the brands or stimuli
being evaluated.
Furthermore, it may be difficult to label the dimensions of the spatial map.

CONDUCTING MULTIDIMENSIONAL
SCALING: OBTAIN INPUT DATA DIRECT
VS. DERIVED APPROACHES
The attribute-based approach has the following advantages and disadvantages:
It is easy to identify respondents with homogeneous perceptions.
The respondents can be clustered based on the attribute ratings.

It is also easier to label the dimensions.

A disadvantage is that the researcher must identify all the salient attributes, a difficult
task.
The spatial map obtained depends upon the attributes identified.
It may be best to use both these approaches in a complementary way. Direct similarity
judgments may be used for obtaining the spatial map, and attribute ratings may be
used as an aid to interpreting the dimensions of the perceptual map.

CONDUCTING MULTIDIMENSIONAL
SCALING:
PREFERENCE DATA
Preference data order the brands or stimuli in terms of respondents'
preference for some property.
A common way in which such data are obtained is through preference
rankings.
Alternatively, respondents may be required to make paired comparisons
and indicate which brand in a pair they prefer.
Another method is to obtain preference ratings for the various brands.
The configuration derived from preference data may differ greatly from
that obtained from similarity data. Two brands may be perceived as
different in a similarity map yet similar in a preference map, and vice
versa.

CONDUCTING MULTIDIMENSIONAL
SCALING:
SELECT AN MDS PROCEDURE
Selection of a specific MDS procedure depends upon:
Whether perception or preference data are being scaled, or whether the
analysis requires both kinds of data.
The nature of the input data is also a determining factor.

Non-metric MDS procedures assume that the input data are ordinal, but
they result in metric output.

Metric MDS methods assume that input data are metric. Since the
output is also metric, a stronger relationship between the output and
input data is maintained, and the metric (interval or ratio) qualities of the
input data are preserved.

The metric and non-metric methods produce similar results.

Another factor influencing the selection of a procedure is whether the MDS

analysis will be conducted at the individual respondent level or at an
aggregate level.

CONDUCTING MULTIDIMENSIONAL
SCALING:
DECIDE ON THE NUMBER OF
DIMENSIONS
A priori knowledge - Theory or past research may suggest a particular
number of dimensions.

Interpretability of the spatial map - Generally, it is difficult to interpret

configurations or maps derived in more than three dimensions.
Elbow criterion - A plot of stress versus dimensionality should be
examined.
Ease of use - It is generally easier to work with two-dimensional maps
or configurations than with those involving more dimensions.
Statistical approaches - For the sophisticated user, statistical
approaches are also available for determining the dimensionality.

PLOT OF STRESS VERSUS

DIMENSIONALITY
Fig. 21.3

0.3

Stress

0.2

0.1

0.0
0

1
2
3
Number of Dimensions

CONDUCTING MULTIDIMENSIONAL
SCALING:
LABEL THE DIMENSIONS AND INTERPRET THE CONFIGURATION

Even if direct similarity judgments are obtained, ratings of the brands on

researcher-supplied attributes may still be collected. Using statistical
methods such as regression, these attribute vectors may be fitted in the
spatial map.
After providing direct similarity or preference data, the respondents may
be asked to indicate the criteria they used in making their evaluations.
If possible, the respondents can be shown their spatial maps and asked to
label the dimensions by inspecting the configurations.
If objective characteristics of the brands are available (e.g., horsepower or
miles per gallon for automobiles), these could be used as an aid in
interpreting the subjective dimensions of the spatial maps.

A SPATIAL MAP OF TOOTHPASTE

BRANDS
2.0
Fig. 21.4

1.5
1.0
0.5
0.0
-0.5

Plus White
Ultra Brite

Aim

Gleem

Crest

Pepsodent
Colgate

Close Up

Aqua-Fresh

-1.0
-1.5

Sensodyne

-2.0
-2.0 -1.5 -1.0 -0.5

0.0

0.5 1.0

1.5

2.0

USING ATTRIBUTE VECTORS TO LABEL

DIMENSIONS
Fig. 21.5
2.0
1.5
1.0
0.5
0.0

Plus White

Ultra Brite

Gleem

-1.5

Crest

Fights
Cavities

Pepsodent
Close Up

-0.5

-1.0

Aim

Whitens Teeth

Colgate
Aqua-Fresh

Sensodyne

Sensitivity Protection
-2.0
-2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0

1.5

2.0

CONDUCTING MULTIDIMENSIONAL
SCALING:
ASSESS RELIABILITY AND VALIDITY

The index of fit, or R-square is a squared correlation index that indicates the
proportion of variance of the optimally scaled data that can be accounted for
by the MDS procedure. Values of 0.60 or better are considered acceptable.
Stress values are also indicative of the quality of MDS solutions. While Rsquare is a measure of goodness-of-fit, stress measures badness-of-fit, or
the proportion of variance of the optimally scaled data that is not accounted
for by the MDS model. Stress values of less than 10% are considered
acceptable.
If an aggregate-level analysis has been done, the original data should be split
into two or more parts. MDS analysis should be conducted separately on
each part and the results compared.

CONDUCTING MULTIDIMENSIONAL
SCALING:
ASSESS RELIABILITY AND VALIDITY

Stimuli can be selectively eliminated from the input data and the solutions
determined for the remaining stimuli.

A random error term could be added to the input data. The resulting data
are subjected to MDS analysis and the solutions compared.
The input data could be collected at two different points in time and the
test-retest reliability determined.

ASSESSMENT OF
STABILITY BY
DELETING ONE BRAND
Fig. 21.6

2.0
1.5

Aqua-Fresh

1.0
Plus White

0.5
0.0
-0.5
-1.0

Close Up
Pepsodent

Colgate
Crest

Ultra Brite
Gleem

Aim

-1.5
-2.0
-2.0 -1.5 -1.0 -0.5

0.0 0.5 1.0

1.5

2.0

EXTERNAL ANALYSIS OF
PREFERENCE DATA
Fig. 21.7

2.0
1.5
1.0

Plus White
Ultra Brite
0.5
Gleem
Pepsodent
0.0
-0.5

-1.0
-1.5

Close Up

Aim
Crest Ideal Point
Colgate
Aqua-Fresh

Sensodyne

-2.0
-2.0 -1.5 -1.0 -0.5

0.0 0.5 1.0

1.5

2.0

ASSUMPTIONS AND LIMITATIONS OF

MDS
It is assumed that the similarity of stimulus A to B is the same as the
similarity of stimulus B to A.
MDS assumes that the distance (similarity) between two stimuli is some
function of their partial similarities on each of several perceptual
dimensions.
When a spatial map is obtained, it is assumed that interpoint distances are
ratio scaled and that the axes of the map are multidimensional interval
scaled.
A limitation of MDS is that dimension interpretation relating physical
changes in brands or stimuli to changes in the perceptual map is difficult at
best.

RELATIONSHIP BETWEEN MDS, FACTOR

AND DISCRIMINANT ANALYSIS

RELATIONSHIP AMONG MDS, FACTOR ANALYSIS AND

DISCRIMINANT ANALYSIS

Suppose a marketing manager wants to identify business-suit attributes

which best discriminate suit brands he/she can develop attribute based
perceptual map using discriminant analysis. Dependent variable is brand
and the independent variable is five suit attributes. (Perception Map).
Consumer while buying apparel product business suit focus on brand name
as the only signals for both product attribute as well as for symbolic values
like status and esteem. Suppose we want to explore how different
business-suit brands are positioned based on consumer preference
mapping. (Rotated component matrix and standardized factor score of
respondents).

RELATIONSHIP AMONG MDS, FACTOR

ANALYSIS, AND DISCRIMINANT ANALYSIS
If the attribute-based approaches are used to obtain input data, spatial maps
can also be obtained by using factor or discriminant analysis.
By factor analyzing the data, one could derive for each respondent, factor
scores for each brand. By plotting brand scores on the factors, a spatial map
could be obtained for each respondent. The dimensions would be labeled by
examining the factor loadings, which are estimates of the correlations
between attribute ratings and underlying factors.
To develop spatial maps by means of discriminant analysis, the dependent
variable is the brand rated and the independent or predictor variables are
the attribute ratings. A spatial map can be obtained by plotting the
discriminant scores for the brands. The dimensions can be labeled by
examining the discriminant weights, or the weightings of attributes that
make up a discriminant function or dimension.

CONJOINT ANALYSIS

CONJOINT
ANALYSIS
Conjoint analysis attempts to determine the relative importance consumers
attach to salient attributes and the utilities they attach to the levels of
attributes.
The respondents are presented with stimuli that consist of combinations of
attribute levels and asked to evaluate these stimuli in terms of their desirability.
Conjoint procedures attempt to assign values to the levels of each attribute, so
that the resulting values or utilities attached to the stimuli match, as closely as
possible, the input evaluations provided by the respondents.

STATISTICS AND TERMS ASSOCIATED

WITH
CONJOINT ANALYSIS
Part-worth functions. The part-worth functions, or utility functions, describe
the utility consumers attach to the levels of each attribute.
Relative importance weights. The relative importance weights are estimated
and indicate which attributes are important in influencing consumer choice.
Attribute levels. The attribute levels denote the values assumed by the
attributes.
Full profiles. Full profiles, or complete profiles of brands, are constructed in
terms of all the attributes by using the attribute levels specified by the
design.
Pairwise tables. In pairwise tables, the respondents evaluate two attributes
at a time until all the required pairs of attributes have been evaluated.

STATISTICS AND TERMS ASSOCIATED

WITH CONJOINT ANALYSIS
Cyclical designs. Cyclical designs are designs employed to reduce the number of
paired comparisons.
Fractional factorial designs. Fractional factorial designs are designs employed to
reduce the number of stimulus profiles to be evaluated in the full profile
approach.
Orthogonal arrays. Orthogonal arrays are a special class of fractional designs that
enable the efficient estimation of all main effects.
Internal validity. This involves correlations of the predicted evaluations for the
holdout or validation stimuli with those obtained from the respondents.

CONDUCTING CONJOINT
ANALYSIS

Fig. 21.8

Formulate the Problem

Construct the Stimuli

Decide the Form of Input Data

Select a Conjoint Analysis Procedure

Interpret the Results

Assess Reliability and Validity

CONDUCTING CONJOINT
ANALYSIS: FORMULATE THE
PROBLEM

Identify the attributes and attribute levels to be used in constructing the

stimuli.
The attributes selected should be salient in influencing consumer
preference and choice and should be actionable.

A typical conjoint analysis study involves six or seven attributes.

At least three levels should be used, unless the attribute naturally occurs
in binary form (two levels).
The researcher should take into account the attribute levels prevalent in
the marketplace and the objectives of the study.

CONDUCTING CONJOINT
ANALYSIS: CONSTRUCT THE
STIMULI

In the pairwise approach, also called two-factor evaluations, the respondents evaluate
two attributes at a time until all the possible pairs of attributes have been evaluated.

In the full-profile approach, also called multiple-factor evaluations, full or complete

profiles of brands are constructed for all the attributes. Typically, each profile is
described on a separate index card.
In the pairwise approach, it is possible to reduce the number of paired comparisons by
using cyclical designs. Likewise, in the full-profile approach, the number of stimulus
profiles can be greatly reduced by means of fractional factorial designs.

SNEAKER ATTRIBUTES AND

LEVELS
Table 21.2

Level

Attribute

Number

Sole

3
2
1

Rubber
Polyurethane
Plastic

Upper

3
2
1

Leather
Canvas
Nylon

Price

3
2
1

$30.00
$60.00
$90.00

Description

FULL-PROFILE APPROACH TO
COLLECTING CONJOINT DATA

Table 21.3

Example of a Sneaker Product Profile

Sole

Made of rubber

Upper

Made of nylon

Price

$30.00

Fig. 21.9

PAIRWISE APPROACH TO CONJOINT DATA

Sole

Rubber
U
p
p
e
r

Sole

Polyurethane

Rubber

Plastic
P
r
i
c
e

Leather
Canvas

$30.00
$60.00
$90.00

Nylon

Price

$ 30.00
U
p
p
e
r

Leather

Canvas
Nylon

$60.00

$90.00

Polyurethane

Plastic

CONDUCTING CONJOINT
ANALYSIS: CONSTRUCT THE
STIMULI
A special class of fractional designs, called orthogonal arrays, allow for the
efficient estimation of all main effects. Orthogonal arrays permit the
measurement of all main effects of interest on an uncorrelated basis. These
designs assume that all interactions are negligible.
Generally, two sets of data are obtained. One, the estimation set, is used to
calculate the part-worth functions for the attribute levels. The other, the
holdout set, is used to assess reliability and validity.

CONDUCTING CONJOINT ANALYSIS:

DECIDE ON THE FORM OF INPUT
DATA
For non-metric data, the respondents are typically required to provide rankorder evaluations.
In the metric form, the respondents provide ratings, rather than rankings. In
this case, the judgments are typically made independently.
In recent years, the use of ratings has become increasingly common.
The dependent variable is usually preference or intention to buy. However,
the conjoint methodology is flexible and can accommodate a range of other
dependent variables, including actual purchase or choice.
In evaluating sneaker profiles, respondents were required to provide
preference.

SNEAKER PROFILES AND RATINGS

Table 21.4

Attribute Levels
Profile No.
1
2
3
4
5
6
7
8
9
a

Sole
1
1
1
2
2
2
3
3
3

Upper Price
1
1
2
2
3
3
1
2
2
3
3
1
1
3
2
1
3
2

Preference
Rating
9
7
5
6
5
6
5
7
6

The attribute levels correspond to those in Table 21.2.

CONDUCTING CONJOINT ANALYSIS:

CONJOINT ANALYSIS MODEL
The basic conjoint analysis model may be represented by the following
formula:
m

U(X ) =
i =1

ki

a x
j =1

ij

ij

Where:
U(X) = overall utility of an alternative
a
ij

= the part-worth contribution or utility associated with

the j th level (j, j = 1, 2, . . . ki) of the i th attribute
(i, i = 1, 2, . . . m)

xij

= 1 if the j th level of the i th attribute is present

= 0 otherwise

ki

= number of levels of attribute i

= number of attributes

CONDUCTING CONJOINT ANALYSIS:

RELATIVE IMPORTANCE
The importance of an attribute, Ii, is defined in terms of the range of

ai, jacross the levels of that attribute:

the part-worths,

The attribute's importance is normalized to ascertain its importance

relative to other attributes, Wi:

I
I
i

i =1

So that

W i = 1
i =1

The simplest estimation procedure, and one which is gaining in popularity, is dummy variable
regression (see Chapter 17). If an attribute has ki levels, it is coded in terms of ki - 1 dummy
variables (see Chapter 14).
Other procedures that are appropriate for non-metric data include LINMAP, MONANOVA, and
the LOGIT model.

ANALYSIS:
ESTIMATING THE CONJOINT
MODEL
The model estimated may be represented as:

U = b0 + b1X1 + b2X2 + b3X3 + b4X4 + b5X5 + b6X6

Where:
X1, X2

= dummy variables representing Sole

X3, X4

= dummy variables representing Upper

X5, X6

= dummy variables representing Price

For Sole, the attribute levels were coded as follows:

X1

X2

Level 1

Level 2

Level 3

SNEAKER DATA CODED FOR

DUMMY VARIABLE REGRESSION
Table 21.5

Preference
Attributes
Ratings
Sole
Upper
Price
Y
X1
X2
X3
X4 X5 X6
9
7
5
6
5
6
5
7
6

1
1
1
0
0
0
0
0
0

0
0
0
1
1
1
0
0
0

1
0
0
1
0
0
1
0
0

0
1
0
0
1
0
0
1
0

1
0
0
0
0
1
0
1
0

0
1
0
1
0
0
0
0
1

CONDUCTING CONJOINT ANALYSIS:

ESTIMATION OF PARAMETERS
The levels of the other attributes were coded similarly. The
parameters were estimated as follows:
b0

= 4.222

b1

= 1.000

b2

= -0.333

b3

= 1.000

b4

= 0.667

b5

= 2.333

b6

= 1.333

Given the dummy variable coding, in which level 3 is the base level, the
coefficients may be related to the part-worths:

a11 - a13 = b1
a12 - a13 = b2

CONDUCTING CONJOINT
ANALYSIS:
CALCULATION OF PART-WORTHS
To solve for the part-worths, an additional constraint is necessary.

a11 + a12 + a13 = 0

These equations for the first attribute, Sole, are:

a 11 - a 13 = 1. 000
a 12 - a 13 = -0. 333

a11 + a12 + a13 = 0

Solving these equations, we get:

a11
a12
a13

= 0.778

= -0.556
= -0.222

CONDUCTING CONJOINT
ANALYSIS: CALCULATION OF PARTWORTHS
The part-worths for other attributes reported in Table
21.6 can be estimated similarly.
For Upper, we have:

a 21 - a 23 = b3
a 22 - a 23 = b4

a21 + a22 + a23 = 0

For the third attribute, Price, we have:

a 31 - a 33 = b5
a 32 - a 33 = b6

a31 + a32 + a33 = 0

CONDUCTING CONJOINT ANALYSIS

DECIDE: CALCULATION OF RELATIVE
IMPORTANCE
The relative importance weights were calculated based on ranges
of part-worths, as follows:
Sum of ranges

= (0.778 - (-0.556)) + (0.445-(-0.556))

of part-worths

+ (1.111-(-1.222))
= 4.668

Relative importance of Sole

= 1.334/4.668 = 0.286

Relative importance of Upper

= 1.001/4.668 = 0.214

Relative importance of Price

= 2.333/4.668 = 0.500

RESULTS OF CONJOINT
ANALYSIS
Table 21.6
Level
Attribute No. Description
Sole
2
1

Utility

3 Rubber
0.778
Polyurethane -0.556
Plastic
-0.222
0.286

Upper 3 Leather
0.445
2 Canvas
0.111
1 Nylon
-0.556

0.214

Price
2
1

0.500

3 $30.00
1.111
$60.00
0.111
$90.00
-1.222

Importance

CONDUCTING CONJOINT
ANALYSIS: INTERPRET THE
RESULTS

For interpreting the results, it is helpful to plot the part-worth functions.

The utility values have only interval scale properties, and their origin is
arbitrary.
The relative importance of attributes should be considered.

ANALYSIS:
ASSESSING RELIABILITY AND
VALIDITY
The goodness of fit of the estimated model should be evaluated. For
example, if dummy variable regression is used, the value of R2 will indicate
the extent to which the model fits the data.
Test-retest reliability can be assessed by obtaining a few replicated
judgments later in data collection.
The evaluations for the holdout or validation stimuli can be predicted by the
estimated part-worth functions. The predicted evaluations can then be
correlated with those obtained from the respondents to determine internal
validity.
If an aggregate-level analysis has been conducted, the estimation sample can
be split in several ways and conjoint analysis conducted on each subsample.
The results can be compared across subsamples to assess the stability of
conjoint analysis solutions.

PART-WORTH FUNCTIONS
Fig. 21.10
0.0

0.0

Utility

-1.0
-1.5

-0.4
-0.8
-1.2

Leather

-2.0
Rubber Polyureth. Plastic

Canvas

Sole

Nylon

0.0
-0.5

Sole

-1.0

Utility

Utility

-0.5

-1.5
-2.0
-2.5
-3.0
$30

$60

Price

$90

ASSUMPTIONS AND LIMITATIONS

OF CONJOINT ANALYSIS

Conjoint analysis assumes that the important attributes of a product can be

identified.
It assumes that consumers evaluate the choice alternatives in terms of these
attributes and make tradeoffs.
The tradeoff model may not be a good representation of the choice process.

Another limitation is that data collection may be complex, particularly if a

large number of attributes are involved and the model must be estimated at
the individual level.
The part-worth functions are not unique.

SPSS WINDOWS
The multidimensional scaling program allows individual differences as
well as aggregate analysis using ALSCAL. The level of measurement can
be ordinal, interval or ratio. Both the direct and the derived approaches
can be accommodated.

To select multidimensional scaling procedures using SPSS for Windows,

click:
Analyze>Scale>Multidimensional Scaling
The conjoint analysis approach can be implemented using regression if
the dependent variable is metric (interval or ratio).
This procedure can be run by clicking:
Analyze>Regression>Linear

SPSS WINDOWS : MDS

First convert similarity ratings to distances by subtracting each value of

Table 21.1 from 8. The form of the data matrix has to be square symmetric
(diagonal elements zero and distances above and below the diagonal. See
SPSS file Table 21.1 Input).
1. Select ANALYZE from the SPSS menu bar.
2. Click SCALE and then MULTIDIMENSIONAL SCALING (ALSCAL).
3. Move Aqua-Fresh [AquaFresh], Crest [Crest], Colgate [Colgate], Aim
[Aim], Gleem [Gleem], Ultra Brite [UltraBrite], Ultra-Brite
[var00007], Close-Up [CloseUp], Pepsodent [Pepsodent], and
Sensodyne [Sensodyne] into the VARIABLES box.

SPSS WINDOWS : MDS

4.

In the DISTANCES box, check DATA ARE DISTANCES. SHAPE should be

SQUARE SYMMETRIC (default).

5.

Click on MODEL. In the pop-up window, in the LEVEL OF

MEASUREMENT box, check INTERVAL. In the SCALING MODEL box,
check EUCLIDEAN DISTANCE. In the CONDITIONALITY box, check
MATRIX. Click CONTINUE.

6.

Click on OPTIONS. In the pop-up window, in the DISPLAY box, check

GROUP PLOTS, DATA MATRIX and MODEL AND OPTIONS SUMMARY.
Click CONTINUE.

7.

Click OK.