Mva - 2008 India School Rick Loyd

Introduction to Multivariate
Analysis
CRS Quantitative School, Mumbai India

Rick Loyd, 11.00 -13.00 May 27th 2008
Confidential & Proprietary • Copyright © 2007 The Nielsen Company

Purpose and Desired Outcomes for MVA Training
Purpose:
To enable you to understand how the key Multivariate Analysis (MVA)

techniques are used to analyse research, and in particular their use in the
Winning Brands (WBs) model
This course is not intended to be a “how to do” course
Desired outcomes for the group: Everyone should...
Have a sound grasp of the concepts underlying regression, factor and

correspondence analyses
Know which research questions/issues these MVA techniques help answer
Be confident about using them in future on Winning Brands, or recommend
their use on ad hoc projects
[Topic of Presentation] December 6, 2010 Page 2 Confidential & Proprietary

Copyright © 2007 The Nielsen Company
Agenda
• What is Multivariate analysis?
• Techniques reviewed
– Correlation
– Regression, simple linear and multiple linear regression (MLR)
– Factor analysis
– Correspondence analysis and mapping
– Winning Brands Model (using the factor and regression analysis)

W
ha
What is Multivariate Analysis (MVA)? t is
MV
A?
Looks at two variables

(questions) simultaneously. Multi Variate
Persuasion
Cross tabulations and analysis
correlations are examples
Analysis of the
relationship between
Bi Variate two, three or more
analysis variables
simultaneously.
Factor and
Uni Variate Regression Analyses
Looks at variables (questions) are examples
analysis one at a time. Frequencies and
averages are examples

What is MVA? Summary of main techniques
Technique Purpose in Research
Regression Used to: identify key drivers of performance (eQ); isolate factors
influencing brand equity (WBs); some forms of regression predict
share movements from price increases (PriceItRight, PIR)
Factor analysis Used to: examine inter-relationships S I ON variables, with the aim
between
of data reduction, or to identifySES
underlying themes (eQ and WBs);
HIS from survey data (eQ and WBs)
build Key performance indicators
T
D I N
ERE
V
Correspondence CO graphical summary of brands’ positioning – in relative or
Provide
Analysis/Biplots and absolute terms – across a range of perceptions/images (Used in
Mapping WBs and ad hoc studies)
Cluster Group respondents in terms of their similarity and/or dissimilarity to

analysis/Consumer establish previously undiscovered attitudinal and/or behavioral
segmentation segments. Segmentation is key part of WB Foresight, and a part of
many U&A studies.
Conjoint and discrete Identifies the relative worth or value of each level of several attributes
choice modelling from rank-ordered preferences of attribute combinations

W
What is MVA? More advanced MVA ha
t is
techniques used in customised research MVA?
• Logistic regression
• Latent class modelling
• Structural Equation Modeling (SEM)
• Discriminant Analysis
• CHAID / CART
• Bayesian Networks
• Genetic Algorithms/Optimisation
None of these will be covered today

W
ha
Software ACNielsen uses for MVA t is
MV
A?
• SPSS for general univariate statistics and most MVA
– Amos (SPSS Add-in module) - SEM
– Answer Tree (SPSS Add-in module) – CHAID, CART
• Latent GOLD for Latent Class Modeling/Segmentation
• BrandMap (Excel add-in) for Correspondence Analysis,
Biplots & MDS
• Sawtooth for Conjoint Analysis, Choice Modeling
• GeneHunter for Genetic Algorithms in Brand3
• Netica – Bayesian Networks

W
Information and Support sources ha
t is
MV
• ACNielsen sources A?
– Your Measurement Science Analyst
– ACNielsen texts – Watchbuilder Measurement Science Standards – Vol 2
(April 2004)
– Colleagues in your local company, region or globally
• Software
– Software training schools (eg SPSS courses / SAS courses)
– The software packages themselves
• Textbooks on market research and statistics
– Hair Joseph F, Anderson Rolph E, Tatham Ronald L, Black William C:
Multivariate Data Analysis Prentice Hal
• The internet
– General statistics websites

W
ha
Why do MVA or Value Added Analysis? t is M
VA
• Consumers are complex: ?
– Consumers rarely make a purchase decision based upon a single
variable
– They tend to unconsciously relate their decisions with multiple
parameters simultaneously
• Value added analysis illuminates the data:
– it makes the data more actionable for the client
– it shows them things that they would not otherwise easily see
– is often the correct way to do it
• Nielsen BPP rely heavily on MVA

Correlation
Measure of linear association between two variables.
Must always be between -1 and +1

Co
rre
Correlation lat
ion
• Correlation is a measure of linear association between two variables
(bivariate analysis) and the building block for other multivariate
techniques such as factor and regression analyses
?How much are measures related or associated?

• What measures really matter?
– What should I concentrate on improving?
– Do they impact on overall ratings?
• Reasons for purchase/satisfaction
– When asked directly, often told everything is important so correlation
enables regression to measure overall the strength of association
between measures
• Which attitudes are similar and which independent (uncorrelated)

Co
rre
Correlation: the -1 to 1 scale lat
ion
Negative correlation Positive correlation
-1 1
Product price & market share 0 Perfect positive correlation
Total cost=fixed + variable costs
-0.7 Market Research measures

0.7
tend to have smaller correlations
• Correlation is a number between -1 and 1 that measures the linear association between
two variables (questions often attitudinal statements in MR)
• Correlation does not imply causation
• Zero or low correlation does not imply that there is no association at all, just no linear
association

Co
rre
Correlation measures Linear relationships lat
ion
10
Correlation of 0.17 is low, but there is visible
8 association between visitation and commitment
Commitment to Company X
6
4
2
0
0 2 4 6 8 10
Supplier’s Frequency of Visit

Co
Associations (Correlations) and rre
lat
Relationships (Regression) ion
18
16
• Perfect linear relationship, y = 2x + 1 14
y end (Dependent)
12
• all points lie on the straight line 10

8
• gradient=2, intercept=1 6
4
2
• Not seen in Market Research eg electricity bill. Total costs 0
0 1 2 3 4 5 6 7 8 9
=fixed costs + variable costs x start (Indepe ndent)
• Y is the independent variable and X the independent (or

explanatory) variable
30
25
• Approximate linear relationship 20
y = 3.5x - 3.3
y independent
• 15
• all points lie close to the line 10
• gradient=3.5, intercept=-3.3 5
• Line is a good fit (97%) 0
0 1 2 3 4 5 6 7 8 9
x independent
• Approximate non linear relationship

• y = ln(x) or y=sqrt(x)
• all points lie on the curve Volume & Price
• gradient=variable, intercept=0 45000
• Imperfect non linear relationships Examples price and 40000
35000
volume 30000
25000
20000
15000
10000
5000
0
1 1.1 1.2 1.3 1.4 1.5

Factor Analysis
Analysis of Interdependence:
for data reduction and the discovery of underlying themes in
the data

Factor Analysis (FA) FA
• Factor analysis tries to simplify attitudinal data by

providing an alternative way of looking at it
? What are the main underlying themes in the data?
? Which perceptions are related?
• FA is based on analysing correlation matrix of attributes
and aims to identify questions that measure, what
respondents see as, similar or related concepts
• Uses
– Use FA to reduce number of questions asked in future research
waves
– Use factors with other techniques (eg regression and cluster
analyses) to analyse data more successfully with uncorrelated
data

Factor Analysis: Example 1 FA
• Customers asked to rate bus travel on a number of attributes on a 10 point

scale: 1 = Doesn’t describe bus travel at all → 10 = Totally describes bus
travel
• Relaxed
• Friendly
• Nervous
• Tolerate it
• Easy
• Interesting
• Uncertain
• Waste of time
• Which statements did they rate similarly?
– ie which statements are correlated?
– common themes in the data

Factor Analysis: Example 1 Statements FA
Correlations Grouped by Q1 - Relaxed Q2 - Friendly Q3 - Nervous Q4 - Tolerate it Q5 – Easy Q6 - Interesting Q7 - Uncertain Q8 - Waste of time
Factors
Q1 - Relaxed 1 0.59 -0.16 0.24 0.55 0.49 -0.13 -0.19
Q2 - Friendly 0.59 1 -0.14 0.24 0.52 0.54 -0.06 -0.15
Q3 - Nervous -0.16 -0.14 1 0.02 -0.18 -0.06 0.33 0.29
Q4 - Tolerate it 0.24 0.24 0.02 1 0.23 0.11 0.10 0.03
Q5 - Easy 0.55 0.52 -0.18 0.23 1 0.39 -0.16 -0.25
Q6 - Interesting 0.49 0.54 -0.06 0.11 0.39 1 0.02 -0.11
Q7 - Uncertain -0.13 -0.06 0.33 0.10 -0.16 0.02 1 0.32
Q8 - Waste of time -0.19 -0.15 0.29 0.03 -0.25 -0.11 0.32 1

Factor Analysis: Example 1 Component Matrix FA
Component • Correlation between statements

and factor
1 2 • First four statement load mainly
on first factor
Q2 – Friendly 0.823
– Positive bus travel
Q1 – Relaxed 0.803 -0.186 • Other 4 load on second factor
Q6 – Interesting 0.732 – Negative about bus travel
Q5 – Easy 0.725 -0.265
• ‘Tolerate it’ loads on both
Q4 - Tolerate it 0.456 0.253
Q7 – Uncertain 0.767
Q3 – Nervous 0.697
Q8 - Waste of time -0.144 0.691

Factor Analysis: Example 1 Component Matrix FA
Component • Correlation between statements

1 2 and factor
• First four statement load mainly
Q2 – Friendly 0.82
on first factor
Q1 – Relaxed 0.80
– Positive bus travel
Q6 – Interesting 0.73
• Other 4 load on second factor
Q5 – Easy 0.72
– Negative about bus travel
Q4 - Tolerate it 0.45
• ‘Tolerate it’ loads on both
Q7 – Uncertain 0.77
Q3 – Nervous 0.70
Q8 - Waste of time 0.70

Factor Analysis: Example 1 Statements FA
(reordered)
Correlations Q1 - Relaxed Q2 - Friendly Q5 - Easy Q6 - Interesting Q4 - Tolerate it Q3 - Nervous Q7 - Uncertain Q8 - Waste of time
Grouped by Factors
Q1 - Relaxed 1 0.59 0.55 0.49 0.24 -0.16 -0.13 -0.19
Q2 - Friendly 0.59 1 0.52 0.54 0.24 -0.14 -0.06 -0.15
Q5 - Easy 0.55 0.52 1 0.39 0.23 -0.18 -0.16 -0.25
Q6 - Interesting 0.49 0.54 0.39 1 0.11 -0.06 0.02 -0.11
Q4 - Tolerate it 0.24 0.24 0.23 0.11 1 0.02 0.10 0.03
Q3 - Nervous -0.16 -0.14 -0.18 -0.06 0.02 1 0.33 0.29
Q7 - Uncertain -0.13 -0.06 -0.16 0.02 0.10 0.33 1 0.32
Q8 - Waste of time -0.19 -0.15 -0.25 -0.11 0.03 0.29 0.32 1

FA: Example 2, Rate 5 Insurance providers on 11 FA
Attributes
Brand A Brand B Brand C Brand D Brand E
A reputable insurance provider
Offers wide range of products and services to suit

different needs
Progressive and provides innovative insurance

solutions
Offers value-for-money products and services
Has strong working relationships with its

distributors/intermediaries
Global insurance provider

Established local insurance provider
One of the insurance providers that I would first

recommend to my
customers
Has expertise in providing insurance solutions
An insurance provider with financial strength
An insurance provider I can trust

FA: Example 2, How much variance do the factors explain?
FA
Total Variance Explained
Extraction Sums of Rotation Sums of Squared
Initial Eigenvalues
Squared Loadings Loadings
Component
% of Cumulative % of Cumulative % of Cumulative
Total Total Total
Variance % Variance % Variance %
1 5.459 49.628 49.628 5.459 49.628 49.628 2.894 26.312 26.312
2 1.249 11.359 60.986 1.249 11.359 60.986 2.634 23.948 50.260
3 .900 8.179 69.165 .900 8.179 69.165 2.080 18.905 69.165
4 .830 7.546 76.711
5 .631 5.736 82.448
6 .478 4.348 86.795
7 .431 3.917 90.713
•Run FA and examine how much of the total
8 .353 3.208 93.921
variation in the data is explained by the factors
9 .295 2.682 96.603
• The factors should explain at least 2/3 of the
10 .204 1.850 98.453
variance. In these data, the first three factors
11 .170 1.547 100.000
explain 69% of the variable.
Extraction Method: Principal Component Analysis.

FA: Example 2: Identifying factors from the Factor
FA
loadings
Rotated Component Matrix(a)
Component
1 2 3
Offers value-for-money products and services .865 .257 -.006
Offers wide range of products and services to suit different needs .836 .101 .192
Progressive and provides innovative insurance solutions .741 .197 .432
Has expertise in providing insurance solutions .657 .326 .267
A reputable insurance provider/company .251 .849 .086
An insurance company I can trust .187 .809 .208
Global insurance company .425 .593 .283
An insurance company with financial strength .074 .575 .458
One of the insurance companies that I would first recommend to my customers .172 .086 .821
Has strong working relationships with its distributors/intermediaries .200 .342 .689
Established local insurance company .334 .481 .543
Rotation Method: Varimax with Kaiser Normalization.
•Review factor loadings to decipher the

factors. The factor loadings are the • Each attribute belongs to
correlations between the factor and the the factor it is most highly
attribute. correlated with

Example (Identifying factors) FA
Rotated Component Matrix(a)
Component
1 2 3
Offers value-for-money products and services .865 .257 -.006
Offers wide range of products and services to suit different needs .836 .101 .192
Factor 1:
Progressive and provides innovative insurance solutions .741 .197 .432
Practical
Has expertise in providing insurance solutions .657 .326 .267 solutions
A reputable insurance provider/company .251 .849 .086
An insurance company I can trust .187 .809 .208
Global insurance company .425 .593 .283 Factor 2:
An insurance company with financial strength .074 .575 .458
Reputation
One of the insurance companies that I would first recommend to my customers .172 .086 .821
Has strong working relationships with its distributors/intermediaries .200 .342 .689
Established local insurance company .334 .481 .543
Rotation Method: Varimax with Kaiser Normalization. Factor 3:
Distribution/
established
A three factor solution is selected for these data:
1. Practical solutions
2. Reputation
3. Distribution/how well established

Factor analysis considerations FA
• Choosing the number of factors is an art, as much as a science
– Usual practice is to run several alternative analyses
– Researcher and analyst’s collaborative judgment are important, to generate a
solution that provides a plausible explanation and interpretation of the factors
– Must achieve a balance between, one the one hand, having enough
factors to explain the variation in the original data satisfactorily and, on
the other, not having so many factors that little or no data reduction had
been achieved.
– Look for at least 65-70%+ with scale data, but 50+% with binary
• How big a sample is needed?
– The larger the sample size, the more accurately we can estimate the
correlations between questions and the more repeatable the analysis will be
– A sample of 400 or more should provide a stable factor analysis
– Minimum sample size of c200?
• What types of scales work best?
– Preferably interval data (5 or 7 point Likert Agree/disagree scale is actually
ordinal data but is treated as interval) as the correlations estimated better
– Binary (yes/no) variables often have a lower correlation

Factor Analysis - Summary FA
• Summarises large amounts of • All variability in data not usually

data accounted for in factor analysis
• Identifies patterns easily that can • Factors can be hard to interpret
be hard to find - represent many measures
• By basing factors on data • Factors depend on data, and
patterns, analysis based on can differ for different sets of
actual results, not data
preconceptions or questionnaire
issues
• Used in conjunction with MLR
• But....
[Topic of Presentation] December 6, 2010 Confidential & Proprietary

Regression
Quantifies the of the relationship between a dependent
variables and some explanatory independent variables
Analyst specifies the nature of the relationship, ie which are
the dependent and independent variables

ML
R
Regression
• Simple (bivariate) Regression
– The starting point for multiple regression
– Bivariate regression is the same analyses as finding correlation
between independent and dependent variable
• Multiple Linear Regression
– Several Independent variable, but still only one dependent
• Many other non-linear forms not covered today

– Logistic, Generalised Linear Models etc
– These types of regression are for different types of data, eg
choice

ML
Simple Linear Regression, Example 1 R
• Simple linear regression has
Sales by Advertising costs
only one independent variable
Y30
• Model fit from R2 = 0.975
25
Sales Value
20 • R2 indicates the proportion

15 of the total variation in the
10 dependent variable
explained by the
5
independent variable
0
0 25 50 75 100 125
Advertising Spend
X
Line of best fit: Y = 1.8 + 2.15*X
Sales value = constant + multiple of advertising expenditure

ML
Simple Linear Regression, Example 2 R
Brand Equity - Brand Share Relationship
8
Brand Equity Index
7
6
5
4
3
2
y = 0.118x + 0.485
1 2
R = 0.80
0
0 10 20 30 40 50
Brand Share (val)

ML
Multiple Linear Regression (MLR): Multiple R
Independent variables (Xs)
• We are interested in the causes of variation in the response to
a dependent variable (eg what causes an increase/decrease in
sales/ratings)
• There will be many variables in a survey which can be
regarded as possible causes/predictors of a dependent
variable (eg Money spent on advertising, value for money etc)
• In statistics’ speak these are called Independent or Explanatory
variables
• Multiple Linear Regression uses correlation as its building bock
to establish the association between Y and Xs

ML
ML Regression: Dependent variable (Y) R
• The dependent variable Y in a regression will be a Key

Performance Indicator (KPI)
• ? What are the key drivers of customer satisfaction? Or what
are the biggest influencers of brand equity in the market?
• From a questionnaire we maybe interested in one variable in
particular – eg purchase intention, likelihood to recommend,
overall satisfaction, the amount of sales of a product, an overall
rating of service
• When this type of variable represents the key interest within a
survey, Regression refers to this as the Dependent variable

Working through an example: drivers of overall
satisfaction with insurance provider Brand A
• We want to know what drives customers’ overall satisfaction
towards Brand A (insurance provider)
• Having grouped the list of 11 attributes into factors (see section on

Factor analysis), we can then use the factors as independent
variables for the regression analysis
• We then build a regression model with the factors as drivers, and

overall satisfaction as the dependent variable
– Now work through the main steps involved, identifying the key
elements to review

MLR: Example 1: What is the relative importance of ML
R
these three factors in driving customer satisfaction?
Q58 ASK ALL XXX CHANNEL (Q1 CODED 1/2/3) Code Route
Read list (3364)
Overall how satisfied are you with XXX as a life insurance company as a whole? Please
rate on a 5 point scale, where "1" is "Very Dissatisfied" and "5" is Very Satisfied", are
you ...... (READ LIST) [SA]
1 Very dissatisfied 1
• Satisfaction = the 2 2
dependent variable 3 3
4 4
5 Very Satisfied 5
DK/Can't say (Do not read out) 6
Factor 1: Practical solutions
• The 3 independent Factor 2: Reputation

variables
Factor 3: Distribution/ established

Example: check how well the regression model fits the ML
R
data, using R2
• R-square (R2) is an overall measure of how well the model (the regression
equation) explains the variance in the data
• R2 is always between 0 and 1:
– An R2 value of 0.222 means it explains 22% of the variance in the data
– The bigger, the R2 value, the better
– An acceptable level for R2 depends on the research setting, but low ones are
accepted in the market research industry. But preferably at least 0.3 and
higher
• Use the Adjusted R2 which takes account of the sample size and the no. of
independent variables. Often there is not a large difference between this and
the R2

MLR: Example 1, SPSS Output from MLR ML
R
● Look at the table of standardised coefficients (beta scores). These are
the weights (β i) of the model
● The Beta scores show the extent to which the independent variable
fluctuates with the dependent variable:
– The bigger the Beta scores, the greater their impact (ie. The more they
fluctuate with satisfaction)
– The implication is that these are more important attributes, because they are
the ones that are moving when satisfaction levels change
Unstandardized Coefficients Standardized Coefficients

Model Beta t Sig.
B Std. Error
(Constant) 3.640 .085 42.664 .000

REGR factor score 1 .235 .086 .355 2.727 .009
1
REGR factor score 2 .062 .086 .093 .716 .478
REGR factor score 3 .196 .086 .296 2.276 .028
a Dependent Variable: Q58. Overall how satisfied are you with XXX as a life insurance company as a w

ML
MLR Example 1: Model for Insurance provider ‘A’ R
Key Drivers and % Impact on

Satisfaction
Factor 1: Practical solutions

48%
Factor 3: Distribution/Established
Satisfaction
Satisfaction 40%
Factor 2: Reputation*
12%
R2 = 0.22, which is low * This driver is not a significant

for this type of contributor to the model
customer analysis

MLR: Example 2, Drivers of Customer retention for an ML
insurance company R
• Setting ongoing expectations
• Range of options Advisor performance
• Knowledgeable 0.28
• Acting in your best interests R2=0.58
• Friendly and helpful
• Prompt personal service

• Resolve complaints quickly Customer service
• Friendly and helpful 0.17
• Processing claims with empathy
• Follow-up after complaint
• Easy to contact
• Competitive rates of return

• Flexible products Product features Customer
0.18
• Medical and life better value
• Fees and charges clear
retention
• Written documents
Company image
• Global network 0.22
•Safe and financially secure
• More interested in profit Industry image

• All companies are the same 0.06
Awareness
0.09

MLR: Example 3, Critical Improvement Plot using MLR forMLR
importance, mean scores from performance
LOW HIGH
I * Customer Focus H
M I
* Overall Quality
P G
O* Product hard to use * Delivery time H
R
T
A * Emergency Responsive Rep *
N ordering L
C O
E W
P ER FO R M A N C E
ML
Multiple Lineear Regression Summary R
• Linear Regression
– eg Key Driver analysis Multiple Regression Model:
– usually based on attitudinal data
– The relationship is linear (ie a
Y = c + b1x1 + b2x2 + b3x3 + ..+ e
straight line can describe the
relationship) and is additive in
nature
– Based on correlation
– Use model fit R2 (adjusted) 30
– Provides Importance Scores 25
20
– Used in eQ and Winning Brands
y independent
15
– Not suitable for all data types, 10
categorical or choice data 5
– Can get multiple-collinearity 0

0 1 2 3 4 5 6 7 8 9
(overlap) between the x independent
independent variables which may

discredit the analysis.

Correspondence Analysis and Perceptual
Mapping
Correspondence analysis provides a visual summary of
brand and attribute survey data

Ma
What is Correspondence Analysis(CA)? ppin
g
• Correspondence analysis is a technique for summarizing large tables
of data in terms of a visual map
• CA analyses respondents’ perceptions of the similarity or dissimilarity
of certain brands, products and services across a range of attributes
• Maps present simple graphical summaries of a market: for example:
– Brand positioning: the relationship between brands and attributes
– The relationship between current brand positioning and the ideal
positioning
– Image ratings by brand users, segments, etc
• Maps are generated via BrandMap, an excel add-on
• Research Questions Answered

? What attributes do consumers associate my brand with
? What are my brands / competitors strengths and weaknesses
– maps present results of cross-tabs or count data visually
– need to consider the absolute scores and relative scores in explaining the
research findings

Ma
Data Table: Cereal Brands’ Image Data pp
ing
COCO POPS FRUITY BIX KELLOGGS CORN KELLOGGS RICE NUTRI-GRAIN VITA BRITS WEET-BIX WEETBIX MILO
FLAKES BUBBLES CRUNCH
High in fibre 3% 11% 11% 4% 19% 41% 73% 2% 1%
Good source of energy 11% 12% 26% 12% 46% 34% 63% 2% 6%
Most nutritious breakfast 2% 8% 17% 5% 19% 29% 65% 1% 1%
Meets my familys needs 14% 8% 36% 17% 25% 21% 54% 1% 3%
Australian owned & made 6% 5% 19% 10% 11% 18% 53% 2% 2%
Children like the taste 69% 12% 23% 34% 32% 8% 22% 1% 8%
Good for kids 10% 12% 31% 19% 22% 33% 66% 2% 3%
Good value for money 8% 4% 35% 16% 12% 23% 60% 1% 1%
Like the taste 37% 12% 43% 26% 38% 19% 47% 2% 5%
Meets my needs 11% 7% 31% 13% 22% 20% 53% 1% 3%
Low in sugar 2% 4% 24% 13% 8% 37% 70% 1% 0%
Convenient 33% 17% 49% 33% 36% 29% 61% 2% 6%
My kids want it 45% 5% 14% 21% 23% 4% 17% 1% 5%
Everyone eats it 18% 3% 48% 19% 20% 11% 46% 1% 3%
A brand I trust 22% 10% 53% 31% 29% 26% 64% 2% 4%
Number 1 cereal brand 6% 1% 33% 7% 9% 4% 28% 1% 1%

Ma
pp
Input for Correspondence Maps ing
• Attitudinal data are most common
– Brand association grids are a typical type of input
• Anything with absent / present type scores is appropriate (eg. ‘Yes
associate that brand with that attribute, or no don’t associate it’)
– Tables of either percentages or raw numbers are acceptable
– Means can be used
• Whether based on means, or percentages, correspondence maps
usually provide similar results. Often maps are just based on
percentage data
• Important to note that Correspondence Analysis is based on
aggregated, not individual level, data unlike FA and MLR

Points to consider with
Correspondence analysis
• What is the minimum number of attributes?
– This is subjective, but a map of data with fewer than four brands
(columns) or 8 attributes (rows) may be relatively uninformative
• Sample size issues are less critical than in segmentation
studies, as analysis has a qualitative feel about it
– But a sample size of between 200-400 would be a minimum
threshold
• Care is needed with interpretation
– Overplaying weak relationships
– Underplaying strong relationships
– Using overly precise language in describing the map

Ma
ing
High in fibre
Good source of energy
Correspondence Map: Example 1 Ma
pp
ing

Ma
Interpreting the Map pp
ing
• Brands that are close to each other are seen to have similar
profiles in the eyes of the consumer
• Brands are located next to attributes which are their greatest
relative strength (ie consumers feel that most characterizes the
brand)
• Attributes that differentiate the brands are close to the edges.
Attributes that do not discriminate (i.e. could be considered are
generic to the category) are located near the centre of the map
• The axes also have meaning – the horizontal is more important
than the vertical. Thus, the position of a brand relative to the
horizontal axis is more important than its location vertically

Ma
Interpreting Correspondence Maps pp
ing
• Distance from the origin to the brand or attribute: Brands
furthest from the origin, particularly horizontally (east or
west), are more distinct than brands nearer the middle of
the map. Similarly for attributes.
Angle in degrees
Correlation Level of Correlation/Associ
0 1 Perfect +ve
• Relationships between brands and attributes: The smaller
15 0.97 +ve Correlation
the angle between a brand and an attribute the more that 30 0.87 +ve Correlation
attribute applies to that brand. Brands that are 180 45 0.71 +ve Correlation
degrees apart have the opposite positioning to each other. 60 0.5 Some +ve
Brands at right angles are simply different or uncorrelated. 75 0.26 Small +ve
Attributes that are at right angles to a brand have no 90 0 No association
association with that brand. 105 -0.26 Small oppostite -ve
120 -0.5 Some oppostite -ve
• Measuring the association between points on a map: It is 135 -0.71 -ve Correlation
helpful to think of the visual measure of association 150 -0.87 -ve Correlation
165 -0.97 -ve Correlation
between brands or attributes (ie the angle between the
180 -1 Perfect opposite –ve
pair in question) in quantitative terms as the correlation
between the pair.

Ma
Correspondence Map: UK ST Data Example 2 ppin
g
C o n v e n ie n t to g e t to
S ta ff p ro v id e g o o d s e r
F o o d a n d G ro c e rie s a
Ma
Correspondence Map: UK ST Data Example 2 pp
ing

Ma
ing
COCO POPS FRUITY BIX KELLOGGS CORN KELLOGGS RICE NUTRI-GRAIN VITA BRITS WEET-BIX WEETBIX MILO
FLAKES BUBBLES CRUNCH
High in fibre 3% 11% 11% 4% 19% 41% 73% 2% 1%
Good source of energy 11% 12% 26% 12% 46% 34% 63% 2% 6%
Most nutritious breakfast 2% 8% 17% 5% 19% 29% 65% 1% 1%
Meets my familys needs 14% 8% 36% 17% 25% 21% 54% 1% 3%
Australian owned & made 6% 5% 19% 10% 11% 18% 53% 2% 2%
Children like the taste 69% 12% 23% 34% 32% 8% 22% 1% 8%
Good for kids 10% 12% 31% 19% 22% 33% 66% 2% 3%
Good value for money 8% 4% 35% 16% 12% 23% 60% 1% 1%
Like the taste 37% 12% 43% 26% 38% 19% 47% 2% 5%
Meets my needs 11% 7% 31% 13% 22% 20% 53% 1% 3%
Low in sugar 2% 4% 24% 13% 8% 37% 70% 1% 0%
Convenient 33% 17% 49% 33% 36% 29% 61% 2% 6%
My kids want it 45% 5% 14% 21% 23% 4% 17% 1% 5%
Everyone eats it 18% 3% 48% 19% 20% 11% 46% 1% 3%
A brand I trust 22% 10% 53% 31% 29% 26% 64% 2% 4%
Number 1 cereal brand 6% 1% 33% 7% 9% 4% 28% 1% 1%

Biplot: Example Cereals Ma
pp
ing
Biplots use
absolute
data values

Correspondence Analysis - Summary
CA.... CA can...
• Summarises large amount of • Be misinterpreted - map
information from tables presented visually, highlights
succinctly and visually relative strengths of brands
• Identifies relationships between • mean numbers from analysis
statements, between brands & difficult to interpret
between statements and brands • Be hard to compare different
• Removes halo effects of brands different maps - how different
as it is a relative analysis they are?
• Probably need to show absolute • Should be described in
scores as well qualitative, or passive
language...eg ’brands tends to
But.... be’ or ‘near to’

Winning Brands Modelling
The Brand Equity Index (BEI)
The Brand Equity Model (BEM)

Winning Brands Modelling: Learning
Objectives & Agenda
Objectives
• Review Winning Brands’ outputs from MSCi
• Reinforce understanding of Winning Brands and it’s
benefits for clients and revisit factor, regression and
correspondence analysis in the WB context
Agenda
• Review BEI Calculation & Interpretation
• Review BEM
• Image Analyses

What is Brand Equity?
The BEI Calculation Explained
Professor Kevin Keller defines brand

equity as “the differential effect that
knowledge about the brand has on the
consumer response to the marketing of
that brand.”

BEI explained: BEI measures emotional commitment
to brands but it is correlated with share B EI
Brand Equity - Brand Share Relationship
8
Brand Equity Index
7
6
5
4
3
2 y = 0.118x + 0.485
1 2
R = 0.80
0
0 10 20 30 40 50
Brand Share (val)

Measuring BEI (1) BE
I
• These key outcomes are each respondent’s
relationship with each brand for
– Favourite/2nd Favourite (for markets with fewer than five
brands)
– (Variable has different values for 1st favourite, 2nd favourite, and neither
favourite)
– Recommended
– (Variable has two values, recommended or not recommended)
– Price Premium
– (Six point scale)

I
• Run FA on the BEI outcome variables
– Results in weights for favrite, recmnd & premium
– Favrite, recmnd & premium are correlated
– eg more likely to recommend a brand that is 1st favourite and
more likely to pay price premium for favourite brand
• Factor analysis creates one factor or main theme from
the correlated data – EQUITY

I
• Convert the ‘Equity’ to BEI on the scale 0 to 10

• Scale of 0-10 allows comparisons within and across
categories and over time
– Score of 0 corresponds to (Not Favourite, Not Recommended, Wouldn’t buy it
at all)
– Score of 10 corresponds to (1st Favourite, Recommended, Pay whatever it
costs)
• BEI scores are then averaged across brands and other
classificatory variables

BE
BEI Outputs by Brand & Subgroup I
• Step 1: Understand the Nature of the Task

Brand A Brand B Brand C
Age Count BEI Std Dev Count BEI Std Dev Count BEI Std Dev
1.00 16-19 years 165 6.5 3.407 165 3.7 3.159 165 1.8 1.828
2.00 20-24 years 155 6.0 3.452 155 3.3 3.002 155 1.4 1.653
3.00 25-29 years 122 4.2 3.499 122 3.9 3.559 122 1.3 1.535
4.00 30-39 years 130 5.5 3.501 130 3.6 3.235 130 1.2 1.354

Interpreting Brand Equity
Normative Database

Interpreting BEI: What Does a Brand’s BEI Score mean?
Normative Database
BE
I
Brand Equity Index
5.0 and
5% • Only about 15% of brands
above
command a brand equity
Strong score of more than 3.0
3.1 - 5.0 10% brands • About 35% are in the
range 1.0 - 3.0
1.0 - 3.0 35% • Majority of brands have
an equity score of less
than 1.0
Less than
50%
1.0
0% 10% 20% 30% 40% 50% 60%
Maximum score is 10,

Minimum Score 0.
Source : ACNielsen’s Winning Brands normative database of over 2,000 cases

Category Brand BEI
Interpreting BEI: Carbonated Beverages Coca-Cola (Regular) 4.0
BE
High Scoring Brands Cigarettes
Cigarettes
Winfield
Benson & Hedges
2.6 I
2.4
Fresh White Milk Pura Fresh 2.5

Fresh White Milk Dairy Farmers Fresh 2.6
The distribution of BEI scores Packaged Bread Helgas 3.3

is skewed to 0.
Instant Coffee Nescafe Blend 43 4.0
Instant Coffee Moccona Classic 4.7
Brand averages are close to 0, Toilet Tissue Kleenex 3.8
but even the strongest brands Toilet Tissue Sorbent 3.8
would not score more than 7 Chocolate Cadbury 6.7
Pet Food Whiskas Cat Food 2.8
Snacks (Chips) Smith's Crisps 3.6

Snacks (Chips) Kettle Chips 3.9
Toothpaste Colgate 6.9

Toothpaste Macleans 3.2
Canned Fish John West 5.0

Canned Fish Greenseas 4.6
Yoghurt Ski 4.0
Use of Norm, for ... BE
I
1) Benchmarking
– against the best in the industry/category
– against the best in the country
– against the best in the region
2) Key Performance 3) Monitor Brand

Indicator Performance
– BEI – on key indicators
– Brand Leverage
4) Marketing Management Performance

– set KPI’s for performance management
Ultimate Objective:
Ensure Success of Brand and Company Profitability

BE
I
Interpreting Brand Equity

Significance Testing:
(1) Between Brands and
(2) Over Time

Significance Testing between Brands BE
I
Brand A
10
Brand C
8
Brand B
Brand Equity Index Score
6 Brand D
4
Aheadof3.6
all other Significantlylower
brands than BrandA,
2
1.8
0.9 aheadofBrandsB 0.9
0 &D
Brand A Brand B Brand C Brand D

Significance Testing Across Subgroups or
Over Time

Significance Testing:
Changes in BEI year-on-year by State Capital City
Brand Sydney Melbourne Brisbane
Brand 1 Significant Change No Change No Change
Brand 2 Significant Change Significant Change Significant Change
Brand 3 No Change Significant Change No Change
Brand 4 No Change No Change No Change

BE
M
Understanding
What is Important to Consumers
Creating the Brand Equity Model

Overview: Winning Brands Model BE
M
Whatconsumersknow Whatconsumersdoorfeel
Awareness ConsumerLoyalty
Consideration
Attributes BrandEquityIndex
Benefits
Attitudes PricePremium

Overview: Two Steps to the BEM BE
M
• Factor Analysis to identify underlying themes

– Factor analysis identifies correlated questions (images)
– Creates main factors (or themes) from individual questions
• Multiple Regression to find the drivers of BEI

– Awareness, consideration & category-related themes versus BEI
– Regression coefficients identifies how much these measures are related to BEI

Drivers: Example of BEM Drivers BE
M
Known Brand/Image
(53%)
Consideration TOTAL = 100%

(18%)
Brand
Equity Index
Awareness
(16%)
R2 =55%
Nutrition/Health
(14%)

BEM Example Output – Drivers & Images BE
M
• Image Factor
– A brand for me Health
– Tastes good
– A brand that makes me feel good, Image
etc
• Health Factor Consider
– Made from whole soy beans
– No cholesterol Awareness
– No lactose, etc
0 20 40 60
% Contribution to BEI of
Attribute

Im
ag
eD
ata
Brand Perceptions
Correlations with BEI

Perceptual Maps
Distinctiveness Scores

Perceptions: Image Correlations with BEI Im
ag
A brand for me 0.82 eD
A brand that makes me feel good
A brand I trust
0.72
0.71
ata
A brand for everyday use 0.66
Tastes good 0.65 • Sorted by
A leading brand 0.65
A brand I know is good for me 0.64 size
A brand that fits with my healthy lifestyle 0.64
Good value for money 0.61
• Sorted within
All round good health 0.58 factors
High in calcium 0.56
Natural 0.55 • Reported by
Good for your bones 0.52
No cholesterol 0.50
brand
Not genetically modified 0.49
Made from whole soy beans 0.49
Australian Brand 0.48
No animal fat 0.47
No Lactose 0.47
Good for your heart 0.46
Good source of phytoestrogens 0.42
Contains antioxidants 0.37

Ma
Correspondence Map: UK ST Data Example 2 pp
ing

Perceptions: Distinctiveness Scores UK ST 07
D is t ic t iv e n e s s S c o r e s
C o n v e n ie n t t o g e t t o
S t a f f p r o v id e g o o d s e r
F o o d a n d G r o c e r ie s a r
• Green better than average
• Red worse than average
E v e r y t h in g I n e e d in t h
MVA Summary
Conclusions and final obervations

Summary of techniques covered today
Technique Purpose in Research
Regression Used to: identify key drivers of performance (eQ); isolate factors
influencing bran equity (WBs); some forms of regression predict
share movements from price increases (PriceItRight, PIR)
Factor analysis Used to: examine inter-relationships between variables, with the
aim of data reduction, or to identify underlying themes (eQ and
WBs); build Key performance indicators from survey data (eQ and
WBs)
Correspondence Provide graphical summary of brands’ positioning – in relative or

Analysis/Biplots and absolute terms – across a range of perceptions/images (Used in
Mapping WBs and ad hoc studies)

MVA Summary: Classifying MVA techniques by
relationship examined
Type of relationship being examined
Interdependence Dependence
Identify structure of Prediction of Dependent
interrelationships variables by Other
independent variables
Is the structure of
relationships How many
among.? variables are being
predicted or
explained?
Variable Cases/ Objects
s Respondent
s One dep. Several Multiple
variable in a dep. relationship
single Variables in s of dep.
relationship single and indep.
ir, Anderson Tatham, Black: Multivariate Data Analysis Prentice Hall relationship variables

MVA Summary: Interdependence Relationships
Interdependence
Identify structure of interrelationships
Is the structure of relationships among.?
Cases/
Variables Objects
Respondent
s
How are the
attributes
Factor Cluster measured?
analysis analysis
Metric Nonmetric
Multidimensional
scaling Correspondence
analysis
ir, Anderson Tatham, Black: Multivariate Data Analysis Prentice Hall

MVA Summary: Dependence Relationships
Dependence
Prediction of Dependent variables by Other
independent variables
How many variables are being predicted or

explained?
Several dep. Multiple

One dep. variable in Variables in single relationships of
a single relationship relationship dep. and indep.
What is the
variables
What is the measurement
measurement scale of the Structural
scale of the dep. variables? equation
Variables? Nonmetric modelling
Metric
What is the
Canonical measurement
Metric Nonmetric
correlation
analysis with
scale of the
dummy variables predictor
Nonmetri
variables? c
Multiple Conjoint Multiple Linear Metric
regression analysis discriminant probability
analysis models Canonical correlation Multiple discriminant
analysis analysis
ir, Anderson Tatham, Black: Multivariate Data Analysis Prentice Hall

Thank You &
Any Questions Please?


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Introduction to Multivariate

CRS Quantitative School, Mumbai India

Confidential & Proprietary • Copyright © 2007 The Nielsen Company

To enable you to understand how the key Multivariate Analysis (MVA)

This course is not intended to be a “how to do” course

Desired outcomes for the group: Everyone should...

Have a sound grasp of the concepts underlying regression, factor and

[Topic of Presentation] December 6, 2010 Page 2 Confidential & Proprietary

[Topic of Presentation] December 6, 2010 Page 3 Confidential & Proprietary

Looks at two variables

[Topic of Presentation] December 6, 2010 Page 4 Confidential & Proprietary

Cluster Group respondents in terms of their similarity and/or dissimilarity to

[Topic of Presentation] December 6, 2010 Page 5 Confidential & Proprietary

None of these will be covered today

[Topic of Presentation] December 6, 2010 Page 6 Confidential & Proprietary

[Topic of Presentation] December 6, 2010 Page 7 Confidential & Proprietary

[Topic of Presentation] December 6, 2010 Page 8 Confidential & Proprietary

[Topic of Presentation] December 6, 2010 Page 9 Confidential & Proprietary

[Topic of Presentation] December 6, 2010 Page 10 Confidential & Proprietary

?How much are measures related or associated?

[Topic of Presentation] December 6, 2010 Page 11 Confidential & Proprietary

-0.7 Market Research measures

[Topic of Presentation] December 6, 2010 Page 12 Confidential & Proprietary

Supplier’s Frequency of Visit

[Topic of Presentation] December 6, 2010 Page 13 Confidential & Proprietary

• Perfect linear relationship, y = 2x + 1 14

• all points lie on the straight line 10

=fixed costs + variable costs x start (Indepe ndent)

• Y is the independent variable and X the independent (or

• Approximate non linear relationship

[Topic of Presentation] December 6, 2010 Page 14 Confidential & Proprietary

[Topic of Presentation] December 6, 2010 Page 15 Confidential & Proprietary

• Factor analysis tries to simplify attitudinal data by

[Topic of Presentation] December 6, 2010 Page 16 Confidential & Proprietary

• Customers asked to rate bus travel on a number of attributes on a 10 point

[Topic of Presentation] December 6, 2010 Page 17 Confidential & Proprietary

Q1 - Relaxed 1 0.59 -0.16 0.24 0.55 0.49 -0.13 -0.19

Q2 - Friendly 0.59 1 -0.14 0.24 0.52 0.54 -0.06 -0.15

Q3 - Nervous -0.16 -0.14 1 0.02 -0.18 -0.06 0.33 0.29

Q4 - Tolerate it 0.24 0.24 0.02 1 0.23 0.11 0.10 0.03

Q5 - Easy 0.55 0.52 -0.18 0.23 1 0.39 -0.16 -0.25

Q6 - Interesting 0.49 0.54 -0.06 0.11 0.39 1 0.02 -0.11

Q7 - Uncertain -0.13 -0.06 0.33 0.10 -0.16 0.02 1 0.32

Q8 - Waste of time -0.19 -0.15 0.29 0.03 -0.25 -0.11 0.32 1

[Topic of Presentation] December 6, 2010 Page 18 Confidential & Proprietary

Component • Correlation between statements

Q8 - Waste of time -0.144 0.691

[Topic of Presentation] December 6, 2010 Page 19 Confidential & Proprietary

Component • Correlation between statements

[Topic of Presentation] December 6, 2010 Page 20 Confidential & Proprietary

Q1 - Relaxed 1 0.59 0.55 0.49 0.24 -0.16 -0.13 -0.19

Q2 - Friendly 0.59 1 0.52 0.54 0.24 -0.14 -0.06 -0.15

Q5 - Easy 0.55 0.52 1 0.39 0.23 -0.18 -0.16 -0.25

Q6 - Interesting 0.49 0.54 0.39 1 0.11 -0.06 0.02 -0.11

Q4 - Tolerate it 0.24 0.24 0.23 0.11 1 0.02 0.10 0.03

Q3 - Nervous -0.16 -0.14 -0.18 -0.06 0.02 1 0.33 0.29

Q7 - Uncertain -0.13 -0.06 -0.16 0.02 0.10 0.33 1 0.32

Q8 - Waste of time -0.19 -0.15 -0.25 -0.11 0.03 0.29 0.32 1

[Topic of Presentation] December 6, 2010 Page 21 Confidential & Proprietary

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