Factor analysis demystifies the drivers behind behavior.

Factor analysis is a statistical method used to unearth the underlying variables, or factors, that drive change in a group of observable attributes. An analyst might want to explain what motivates respondents to answer a survey in particular ways. He or she would note that questions about service, product quality, and other discrete topics correlate. The analyst’s job is to figure out how many, and what kinds, of factors influence these correlations –and to form a plausible theory as to what each factor means.

In the context of market research, you can use factor analysis to:

• Reduce a body of data to a few key dimensions, making insights easier to access.
• Explain how a collection of dependent variables relate to each other, even as you examine in detail the relationship of each to an independent variable.
• Use the relationship between attributes to create perceptual maps and other visual aids that explain data to end users.

An end user can benefit from the results of factor analysis, as well.

• Segment customers not just along demographic lines but in terms of which factors shape their choices (are they sensitive to product packaging, ease of use, convenience, etc).
• Position a product or service according to which factors influence targets’ decisions, so as to fully utilize the available sales opportunities.
• Gauge how one attribute enhances or detracts from another. Create an offering whose elements work together in an optimum whole, driving sales and securing loyalty.

Factor analysis may apply to multiple study types. You could apply it to your packaging assessment to help you pin down a list of packaging attributes that you want to improve. You could also use it to understand key dimensions of customer satisfaction –or of competitor performance. The possibilities are numerous.

FGI Research can offer robust research analysis because we have a team of some of the most experienced marketing research scientists in the industry. We can offer a dynamic approach to research because our experience with different methodologies and solutions is so broad. Let us help you find the ideal study type and analytical approach, so that you can get your questions answered and move forward in your business process.

Contact us today for a needs evaluation.