1 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Learning Objectives: 1.Understand how to use cluster analysis with discriminant analysis. 2.Understand how to use factor analysis with regression. 3.Explain the use of summated scores instead of factor scores. 4.Clarify the visual impact of Importance- Performance Analysis. Advanced Analysis and Presentation Approaches Chapter 14

2 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Relationship Variables from Customer Survey 17. How satisfied are you with Samouel’s restaurant? Not Satisfied Very At All Satisfied How likely are you to return to Samouel’s restaurant in the future? Definitely Will Definitely Will Not Return Return How likely are you to recommend Samouel’s restaurant to a friend? Definitely Will Not Definitely Will Recommend Recommend How often do you patronize Samouel’s restaurant?1 = Occasionally (Less than once a month) 2 = Frequently (1 – 3 times a month) 3 = Very Frequently (4 or more times a month) 21. How long have you been a customer of Samouel’s restaurant? 1 = Less than One Year 2 = One year to three years 3 = More than three years

3 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Cluster Analysis Research Questions Research Question One: “Can clusters be identified?” Research Question Two: “Are the clusters valid?” Research Question Three: “Do the perceptions variables predict the clusters?”

4 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit 14-2 Error Coefficients and Error Reduction for Satisfaction Variables’ Cluster Solutions Error Coefficients Error Reduction Four Clusters = – 4 Clusters = Three Clusters= – 3 Clusters = Two Clusters = – 2 Clusters = One Cluster =

5 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit 14-3 Means for Two-Cluster Solution VariablesGroupsNMean X 17 – Satisfaction Total X 18 – Return in Future Total X 19 – Recommend to Friend Total

6 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit 14-3 Means Plots for Two- Cluster Solution

7 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit 14-4 Means for Three-Cluster Solution VariablesGroupsNMean X 17 – Satisfaction Total X 18 – Return in Future Total X 19 – Recommend to Friend Total

8 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit 14-4 Means Plots for Three-Cluster Solution

9 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit 14-5 ANOVA Results for Two- Cluster Solution of Satisfaction Variables VariablesFSig. X 17 – SatisfactionBetween Groups X 18 – Return in FutureBetween Groups X 19 – Recommend to FriendBetween Groups ANOVA

10 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit 14-6 Validation Statistics for Two-Group Satisfaction Clusters VariablesGroupsNMean X 20 – Frequency of Patronage Total X 21 – How Long a Customer Total Descriptives VariablesFSig. X 20 – Frequency of PatronageBetween Groups X 21 – How Long a CustomerBetween Groups ANOVA

11 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit 14-7 Prediction of Customer Satisfaction Clusters Test of Function(s)Wilks’ LambdaChi- SquareSig Wilks’ Lambda * 79.0% of original grouped cases correctly classified. Predicted Group Membership Total Dependent Variables12 Original Count % Classification Results*

12 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit 14-8 Structure Matrix for Two-Cluster Solution VariablesFunction 1 X 6 – Friendly Employees.777 X 12 – Competent Employees.752 X 1 – Excellent Food Quality.510 X 4 – Excellent Food Taste.387 X 11 – Courteous Employees.384 X 9 – Wide Variety of Menu Items.189

13 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit 14-9 Group Means for Food and Employee Independent Variables VariablesMean Group 1Group 2 X 1 – Excellent Food Quality X 4 – Excellent Food Taste X 6 – Friendly Employees X 9 – Wide Variety of Menu Items X 11 – Courteous Employees X 12 – Competent Employees Group Statistics

14 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit Rotated Factor Solution for 12 Perceptions Variables on the Customer Survey VariablesComponents (Factors) 1234 X 4 – Excellent Food Taste.912 X 9 – Wide Variety of Menu Items.901 X 4 – Excellent Food Quality.883 X 6 – Friendly Employees.892 X 11 – Courteous Employees.850 X 12 – Competent Employees.800 X 8 – Fun Place to Go.869 X 2 – Attractive Interior.854 X 7 – Appears Clean and Neat.751 X 3 – Generous Portions.896 X 5 – Good Value for Money.775 X 10 – Reasonable Prices.754

15 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit Rotated Factor Solution for 12 Perceptions Variables on the Customer Survey Continued Component Rotation Sums of Squared Loadings % of VarianceCumulative % Total

16 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, are composite scores calculated for each respondent on each of the derived factors. Factor Scores

17 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit Factor Scores for Five Respondents in Customer Survey Factors Respondents # # # # #

18 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit Descriptive Statistics for Multiple Regression Using Factor Scores X 25 – Competitor VariablesMean Samouel’s X 17 – Satisfaction4.78 Food Factor–.153 Employees Factor–.626 Atmosphere Factor.262 Value Factor–.076 Gino’s X 17 – Satisfaction5.96 Food Factor.153 Employees Factor.626 Atmosphere Factor–.262 Value Factor.076

19 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit Multiple Regression Using Factor Scores X 25 – Competitor ModelRR Square Samouel’s Gino’s Model Summary * Predictors: (Constant), Food Factor, Employees Factor, Atmosphere Factor, Value Factor

20 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit Multiple Regression Using Factor Scores Continued X 25 – Competitor ModelSum of Squares Mean Square FSig. Samouel’s 1 Regression Residual Total Gino’s 1 Regression Residual Total * Predictors: (Constant), Dependent Variable: X 17 – Satisfaction ANOVA

21 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit Regression Coefficients for Regression Models X 25 – Competitor Standardized Coefficients tSig. ModelBeta Samouel’s1 (Constant) Food Factor Employees Factor Atmosphere Factor Value Factor Gino’s1 (Constant) Food Factor Employees Factor Atmosphere Factor Value Factor Coefficients * * Dependent Variable: X 17 – Satisfaction

22 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit Raw Data for 12 Perceptions Variables on Customer Survey Perceptions Variables ID X 1 X 2 X 3 X 4 X 5 X 6 X 7 X 8 X 9 X 10 X 11 X

23 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, are calculated by adding the original scale responses together and determining the mean value. Summated Scores

24 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit Summated Scores for Five Customer Survey Respondents New Summated Scores Variables food_s employ_s atmos_s value_s Respondent ID # # # # #

25 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit Discriminant Analysis with Summated Scores Test of Function(s)Wilks’ LambdaSig Classification Results * 79% of original grouped cases correctly classified Predicted Group Membership Total Ward Method12 Original Count %

26 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit Significant Predictors in Discriminant Function VariablesFunction 1 Employees Summated.854 Food Summated.444 Value Summated.438 Atmosphere Summated-.022 Correlations between discriminating variables and the discriminant function. Variables ordered by absolute size of correlation within function.

27 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit Cluster Means for Summated Score Variables Ward Method VariablesMean Cluster 1 Moderately Satisfied Cluster 2 Highly Satisfied Food Summated Employees Summated Atmosphere Summated Value Summated

28 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit Rankings of Restaurant Selection Factors for Samouel’s Customers Samouel’s X 13 – Food Quality Ranking X 14 – Atmosphere Ranking X 15 – Prices Ranking X 16 – Employees Ranking NValid100 Missing0000 Median Mode4321 Minimum2211 Maximum4434 Multiple modes exist. The smallest value is shown.

29 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit Rankings of Restaurant Selection Factors for Gino’s Customers Gino’s X 13 – Food Quality Ranking X 14 – Atmosphere Ranking X 15 – Prices Ranking X 16 – Employees Ranking NValid100 Missing0000 Median Mode4312 Minimum2211 Maximum4423 Multiple modes exist. The smallest value is shown.

30 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit Means of Selected Perceptions Variables on Customer Survey for Samouel’s Samouel’sX 1 – Excellent Food Quality X 8 – Fun Place To Go X 10 – Reasonable Prices X 12 – Competent Employees N Valid100 Missing0000 Mean Minimum3121 Maximum7663

31 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit Means of Selected Perceptions Variables on Customer Survey for Gino’s Gino’s X 1 – Excellent Food Quality X 8 – Fun Place To Go X 10 – Reasonable Prices X 12 – Competent Employees N Valid100 Missing0000 Mean Minimum3121 Maximum7565

32 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, a process used to develop maps that show the perceptions of a company, product, service, brand, or any other object in two dimensions. Perceptual Mapping

33 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Exhibit Illustration of Importance/Performance Chart Using Restaurant Customer Survey Database Importance 4 Atmosphere Performance Employees Gino’s = Samouel’s = Food Quality Prices

34 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, Advanced Analysis and Presentation Approaches Go On-Line How can business researchers use the data from the research reported on this website?