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Factor
Analysis
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- Factor
analysis is a data reduction technique that tries
to reduce a list of attributes or other measures to
their essence; that is, a smaller set of ‘factors’
that capture the patterns seen in the data. Marketers
and researchers who study a product, service, or industry
professionally sometimes perceive many more distinctions
within their category than do their consumers. This
can lead to questionnaires containing attribute lists
that consumers see as somewhat or largely synonymous.
Factor analysis tells you how many different core
factors the consumers perceived out of the list of
attributes they rated.
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- The
main benefits of factor analysis are that the analyst
can focus their attention on the unique core elements
instead of the redundant attributes, and as a data
‘pre-processor‘ for regression models.
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