Everyday Tea Whitener

Arslan Naseer Warraich

18010040
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Everyday Tea Whitener
Assignment 2

The main purpose of the exercise was to identify the underlying dimensions of tea whitener
consumption on which to segment the consumer through the use of factor analysis. There were a
total of 15 statements that were used to determine the preference of the consumer. The result of
the factor analysis are given in the Exhibits. Exhibit 1 shows the rotated component matrix in
which we can identify as to what variables are highly correlated with a particular factor. In factor
1 the first 5 statements have a high correlation and these statements have more to do with brand
image and quality of the factor. Thus it can be named as Brand Conscious Buyer.

For factor 2, statements 6, 7, 8 & 15 have a very high correlation with it and these statements
have more to do with consumer thinking and preference. Thus it can be labeled as Information
Seeker.
For factor 3, statements 10, 11 & 9 have a very high correlation with it and these statements have
more to do with pricing and discounts. Thus it can be labeled as Discount Seeker Buyer.
For factor 4, statements 12 & 13 have a very high correlation with it and these statements have
more to do with usage of everyday despite whatever factors are considered. Thus it can be
labeled as Brand Loyal Consumer.
For factor 5, statements 14 has a very high correlation with it and this statement has to do with
nutrition and health of using tea whiteners. Thus it can be labeled as Health Conscious Buyer.

The factor analysis has been validated through a number of tests. The Bartletts Test of Sphericity
has a high value and is also statistically significant. This rejects the null hypothesis of variables
being uncorrelated in the population. The KMO test has a value of 0.6 which means factor
analysis is appropriate tool for this exercise. Lastly the number of factors are also appropriate as
they explain more than 60% of the variance which is what is considered to be appropriate in
theory.
To summarize the 5 main factors highlighted from the cluster analysis are:
1. Brand Conscious Buyer
2. Information Seeker
3. Discount Seeker
4. Health Conscious Buyer
5. Brand Loyal Consumer

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 18010040
Everyday Tea Whitener
Assignment 2

Exhibit 1
Rotated Component Matrixa

Component

1 2 3 4 5

S1-Everydays product
advertising is a good source
.823
of learning and information
about the product
S3-Everyday is convenient
.745
to use
S2-Everyday is a quality
.661
product
S5-Everyday makes my tea
.629
more exciting
S4-My parents have been
using Everyday since many .571 .407
years
S6-I have some good
information about where .894
Everyday is available
S7-I take the decision of
.855
buying Everyday
S8-I gave my family and
friends advice to try .807
Everyday
S15-I pay attention to the
nutritional information
.411
mentioned on Everydays
Packaging
S10-Promotions and
coupons on Everyday .723
influences my buying
S11-Everyday is available at
.681
the reasonable price
S9-I tend to refer to
salespeople to get .669
information about Everyday

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 18010040
Everyday Tea Whitener
Assignment 2

S12-I dont make everyday

purchase decisions based .852
on advertising
S13-I dont need to change
Everyday, as Im happy with .674
my routine over the days
S14-Everyday is available as
.862
a low-calorie option

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.a
a. Rotation converged in 5 iterations.

Exhibit 2:

Total Variance Explained

Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

Component Total % of Variance Cumulative % Total % of Variance Cumulative %

1 3.047 20.316 20.316 2.688 17.920 17.920

2 2.685 17.900 38.217 2.579 17.197 35.116
3 1.519 10.129 48.346 1.742 11.611 46.727
4 1.352 9.015 57.361 1.487 9.913 56.640
5 1.109 7.394 64.755 1.217 8.115 64.755

Extraction Method: Principal Component Analysis.

Exhibit 3:

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .600

Bartlett's Test of Sphericity Approx. Chi-Square 615.615

df 105

Sig. .000

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