If you ever thought of starting a new business or launching a new product, you’d probably already asked yourself: which type of products are the customers ordering? What type of competition are the products facing in this market? To answer these questions objectively, you can apply Factor Analysis to identify how many and which are the segments in your market. When a company organizes its product line to cover all the attractive market segments and to avoid product overlapping, profitability is more secure.
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By the end of this project, you will create a market segmentation by applying Q-type Factor Analysis with R Programming. This guided project is for Business and/or Economics students, entrepreneurs, marketing analysts and anyone else interested in improving product planning and trading strategies by applying quantitative methods to support the decision making process. The prerequisites are familiarity with the concepts of market segmentation, multivariate analysis and R programming.
In this Guided Project, you will:
- Create a factor analysis model with R programming
- Use the results of the factor analysis to identify the market segments
Learn step-by-step
- Introduction and data preparation
- Calculating the correlation matrix and testing for the assumptions
- Extracting and determining the number of factors
- Setting the number of factors and evaluating the overall adjustment
- Improving the model adjustment
- Visualizing and interpreting the results
