Question 1

To facilitate market segmentation by identifying subjects or individuals who have similar needs, lifestyles or responses to marketing strategies, which of the following statistical procedures would be appropriate?

Accepted Answer

Cluster analysis is an appropriate statistical procedure for facilitating market segmentation as it identifies similar groups of individuals or subjects based on their characteristics and behaviors, allowing for more targeted marketing strategies. Multidimensional scaling is used to map perceptual data, discriminant analysis is used to determine which variables discriminate between groups, and factor analysis is used to identify underlying factors that explain the variation in a set of variables. While all of these procedures may be useful in market research, cluster analysis is the most appropriate for identifying market segments.

Question 2

A type of graphical representation that helps the researcher to decide how many groups are appropriate is called a:

Accepted Answer

A dendogram is a tree-like diagram that shows the cluster of data points based on the similarity/dissimilarity of their attributes. By observing the height of the dendogram where the clusters branches off, the researcher can determine the appropriate number of groups to be formed. Therefore, a dendogram is a type of graphical representation that helps the researcher to decide how many groups are appropriate.

Question 3

In a prestige car study, respondents were asked to rate the similarity of a BMW to a Mercedes, a Jaguar and other vehicles. Which statistical procedure would you recommend to analyse the data collected?

Accepted Answer

Multidimensional scaling is a technique used to analyze similarity data and create a visual representation of the relationships between variables. It is commonly used in market research to understand how consumers perceive and compare different products or brands. In this scenario, respondents were asked to rate the similarity between different luxury car brands, making multidimensional scaling a suitable method for analyzing the perceived similarities between the brands. Discriminant analysis, cluster analysis, and conjoint analysis are not appropriate methods for analyzing similarity data.

Question 4

Which of the following is not an interdependence method of analysis?

Accepted Answer

Discriminant analysis is not an interdependence method of analysis; it is a dependence method because it involves predicting a categorical dependent variable based on one or more independent variables.

Question 5

Which of the following statements about multidimensional scaling is not true?

Accepted Answer

The labelling of the dimension axis is determined by the researcher or analyst based on their interpretation of the data, rather than being statistically determined.

Question 6

If a researcher wishes to discover natural groups of cases, then he or she should use:

Accepted Answer

Cluster analysis is the best choice when a researcher wants to discover natural groups of cases. This statistical technique helps in identifying groups of cases that are relatively homogenous within the group, and heterogenous between groups. It is commonly used in market research, social sciences, and other fields where understanding how cases group together is important. Factor analysis is more suited to identifying latent variables that underlie observed variables, conjoint analysis is used to measure the importance and trade-offs among different attributes, and discriminant analysis is used to classify cases into predefined groups based on a set of predictor variables.

Quiz 15: Multivariate Statistical Analysis