1. 1 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. 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. 2 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Relationship Variables from Customer Survey 17. How satisfied are you with Samouel’s restaurant? Not Satisfied Very At All Satisfied 1 2 3 4 5 6 7 18. How likely are you to return to Samouel’s restaurant in the future? Definitely Will Definitely Will Not Return Return 1 2 3 4 5 6 7 19. How likely are you to recommend Samouel’s restaurant to a friend? Definitely Will Not Definitely Will Recommend Recommend 1 2 3 4 5 6 7 20. 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. 3 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. 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. 4 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-2 Error Coefficients and Error Reduction for Satisfaction Variables’ Cluster Solutions Error Coefficients Error Reduction Four Clusters = 140.8653 – 4 Clusters = 42.013 Three Clusters= 182.8782 – 3 Clusters = 99.972 Two Clusters = 282.8501 – 2 Clusters = 551.405 One Cluster = 834.255

5. 5 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-3 Means for Two-Cluster Solution VariablesGroupsNMean X 17 – Satisfaction 1804.14 21206.19 Total2005.37 X 18 – Return in Future 1803.83 21205.72 Total2004.96 X 19 – Recommend to Friend 1803.61 21205.53 Total2004.76

6. 6 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-3 Means Plots for Two- Cluster Solution

7. 7 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-4 Means for Three-Cluster Solution VariablesGroupsNMean X 17 – Satisfaction 1804.14 2756.53 3455.62 Total2005.37 X 18 – Return in Future 1803.83 2756.20 3454.91 Total2004.96 X 19 – Recommend to Friend 1803.61 2755.92 3454.89 Total2004.76

8. 8 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-4 Means Plots for Three-Cluster Solution

9. 9 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-5 ANOVA Results for Two- Cluster Solution of Satisfaction Variables VariablesFSig. X 17 – SatisfactionBetween Groups426.270.000 X 18 – Return in FutureBetween Groups340.375.000 X 19 – Recommend to FriendBetween Groups394.646.000 ANOVA

10. 10 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-6 Validation Statistics for Two-Group Satisfaction Clusters VariablesGroupsNMean X 20 – Frequency of Patronage 1801.53 21202.63 Total2002.19 X 21 – How Long a Customer 1801.40 21202.63 Total2002.14 Descriptives VariablesFSig. X 20 – Frequency of PatronageBetween Groups139.289.000 X 21 – How Long a CustomerBetween Groups178.330.000 ANOVA

11. 11 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-7 Prediction of Customer Satisfaction Clusters Test of Function(s)Wilks’ LambdaChi- SquareSig. 1.67177.795.000 Wilks’ Lambda * 79.0% of original grouped cases correctly classified. Predicted Group Membership Total Dependent Variables12 Original Count15327 80 215105 120 %166.333.8 100.0 212.587.5 100.0 Classification Results*

12. 12 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. 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. 13 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-9 Group Means for Food and Employee Independent Variables VariablesMean Group 1Group 2 X 1 – Excellent Food Quality5.015.87 X 4 – Excellent Food Taste5.065.70 X 6 – Friendly Employees2.934.14 X 9 – Wide Variety of Menu Items5.315.63 X 11 – Courteous Employees2.102.60 X 12 – Competent Employees1.642.55 Group Statistics

14. 14 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-10 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. 15 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-10 Rotated Factor Solution for 12 Perceptions Variables on the Customer Survey Continued Component Rotation Sums of Squared Loadings % of VarianceCumulative % Total 12.54321.188 22.25118.75839.946 32.10017.49857.444 42.06017.17074.614

16. 16 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003..... are composite scores calculated for each respondent on each of the derived factors. Factor Scores

17. 17 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-11 Factor Scores for Five Respondents in Customer Survey Factors 12 3 4 Respondents #1 -.89212 1.24493.84853 -.38169 #2 -2.33246 -1.01861.21274.65610 #3 -.55517 -1.14659 -.90178 -.91886 #4 -.22994 -1.91237.23862 -.20539 #5 -.03014.19599 1.30175 -.53036

18. 18 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-12 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. 19 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-13 Multiple Regression Using Factor Scores X 25 – Competitor ModelRR Square Samouel’s1.604.365 Gino’s1.548.300 Model Summary * Predictors: (Constant), Food Factor, Employees Factor, Atmosphere Factor, Value Factor

20. 20 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-13 Multiple Regression Using Factor Scores Continued X 25 – Competitor ModelSum of Squares Mean Square FSig. Samouel’s 1 Regression48.58312.14613.643.000 Residual84.577.890 Total133.160 Gino’s 1 Regression28.1307.03210.167.000 Residual65.710.692 Total93.840 * Predictors: (Constant), Dependent Variable: X 17 – Satisfaction ANOVA

21. 21 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-14 Regression Coefficients for Regression Models X 25 – Competitor Standardized Coefficients tSig. ModelBeta Samouel’s1 (Constant)39.221.000 Food Factor.4335.155.000 Employees Factor.3193.736.000 Atmosphere Factor.1371.564.121 Value Factor.1621.951.054 Gino’s1 (Constant)45.521.000 Food Factor.4214.673.000 Employees Factor.4805.305.000 Atmosphere Factor.028.318.752 Value Factor.0911.052.296 Coefficients * * Dependent Variable: X 17 – Satisfaction

22. 22 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-15 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 12 1 64 1 6 4 4 4 3 6 3 3 2 2 65 3 4 4 4 5 4 4 4 4 3 3 74 4 7 6 4 4 3 7 4 3 4 4 34 5 3 3 2 5 4 3 5 2 1 5 54 5 5 5 5 3 3 5 4 3 2

23. 23 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003..... are calculated by adding the original scale responses together and determining the mean value. Summated Scores

24. 24 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-16 Summated Scores for Five Customer Survey Respondents New Summated Scores Variables food_s employ_s atmos_s value_s Respondent ID #1 6.00 3.003.672.67 #2 5.33 3.674.673.67 #3 7.00 3.673.674.67 #4 3.00 1.674.334.33 #5 5.00 3.333.334.67

25. 25 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-17 Discriminant Analysis with Summated Scores Test of Function(s)Wilks’ LambdaSig. 1.716.000 Classification Results * 79% of original grouped cases correctly classified Predicted Group Membership Total Ward Method12 Original Count15426 80 216104 120 %167.532.5 100.0 213.386.7 100.0

26. 26 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-18 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. 27 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-19 Cluster Means for Summated Score Variables Ward Method VariablesMean Cluster 1 Moderately Satisfied Cluster 2 Highly Satisfied Food Summated5.12925.7333 Employees Summated2.22003.0972 Atmosphere Summated4.07924.0556 Value Summated3.73754.3250

28. 28 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-20 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 Median4.003.002.001.00 Mode4321 Minimum2211 Maximum4434 Multiple modes exist. The smallest value is shown.

29. 29 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-20 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 Median4.003.001.002.00 Mode4312 Minimum2211 Maximum4423 Multiple modes exist. The smallest value is shown.

30. 30 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-21 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 Mean5.243.654.141.62 Minimum3121 Maximum7663

31. 31 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-21 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 Mean5.813.123.972.75 Minimum3121 Maximum7565

32. 32 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003..... 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. 33 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Exhibit 14-22 Illustration of Importance/Performance Chart Using Restaurant Customer Survey Database Importance 4 Atmosphere Performance 1 2 3 4 5 6 Employees Gino’s = Samouel’s = Food Quality 3 2 1 Prices

34. 34 Hair, Babin, Money & Samouel, Essentials of Business Research, Wiley, 2003. Advanced Analysis and Presentation Approaches Go On-Line www.yankelovich.com How can business researchers use the data from the research reported on this website?