Importance of Factor Analysis in Marketing
One of the most important topics from the perspective of marketing was covered in the subject of Business analytics and belonged to Factor Analysis. In essence, marketing factor analysis is changing one marketing variable to see what affect, if any, the change has on the outcome. The change in sales also affects the bottom line of the company, so factor analysis in marketing helps companies determine which marketing efforts it should pursue, which efforts need work and which marketing efforts may meet the cutting room floor.
An infinite number of marketing variables can exist, which is why it is necessary to alter only one at a time. Marketing variables include the product, the product packaging, the size of the product and the color of the product. The price, distribution channels and marketing strategies may also be variables of the product that can be changed to see how the change makes a difference in the sales of the product.
What Customers Want
Conducting Factor Analysis
Factor analysis in marketing can change the way a company sells its product, but factor analysis in marketing is not a science. Grand scale testing is typically required to come to a fair conclusion on the relationship of the variables. It is wise to have a market research expert help to conduct the factor analysis and evaluate the test results to ensure it is not an incorrectly implied cause/effect relationship.
Group - Marketing 3