**Question 1**

a)

Identify whether (or not) there exist any distinct segments within the market.

In order to find out that whether there are any distinct segments within the market or only one specific segment exists in the market we have applied the variable reduction technique, which is also called as the exploratory factor analysis(Ruscio, 2012). The aim of this technique is to reduce the larger number of the questions or the set of the variables into smaller components of sets of variables that have homogeneous characteristics.

These are then called as the principle components and these would account for most of the variance in the original variables. Conjoint analysts had not been used because the purpose here is not to identify how different people value particular attributes however, the purpose here is to determine the total number of the segments in the whole population and transform the variables into those segments that have homogenous characteristics. Therefore, by applying factor analysis in SPSS we can find out how many distinct segments of the customers exist within the market that might be interested in using the PDA.

We have developed the segments from the nine variables from X1 to X9, which state the responses of the 72 respondents about their uses of the communication and information technologies. These variables have been taken to determine the number of the segments because these are the responses of the users regarding their use of the PDA which will enable us to determine the potential of the advanced PDA that is being developed by the company. The use of PDA was used as the basis because there are differences in frequency of usage across customer types and industries.

Spss Assignment Harvard Case Solution & Analysis

The factor analysis has been performed in SPSS and we can see the KMO and Bartlett’s Test results in the table below:

KMO and Bartlett's Test |
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Kaiser-Meyer-Olkin Measure of Sampling Adequacy. | .699 | |

Bartlett's Test of Sphericity | Approx. Chi-Square | 193.365 |

df | 36 | |

Sig. | .000 |

The significance value of The Bartlett’s test of sphericity is 0.000, which means that the null hypothesis would be rejected that the correlation matrix is not an identity matrix and not all the diagonal elements in the correlation matrix areone. This does not mean that some need to be taken out but it shows that now factor analysis is the most suitable technique to separate them into segments. In the SPSS output if we look at the Total Variance Explained variable then the rows for the first three components are filled up completely, thus we can conclude that there are distinct customer segments in the market and the number of these segments is 3. This table is shown below:

Total Variance Explained |
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Component | Initial Eigenvalues | Extraction Sums of Squared Loadings | Rotation Sums of Squared Loadings | ||||||

Total | % of Variance | Cumulative % | Total | % of Variance | Cumulative % | Total | % of Variance | Cumulative % | |

1 | 2.996 | 33.283 | 33.283 | 2.996 | 33.283 | 33.283 | 2.582 | 28.689 | 28.689 |

2 | 1.766 | 19.626 | 52.909 | 1.766 | 19.626 | 52.909 | 1.833 | 20.369 | 49.058 |

3 | 1.312 | 14.578 | 67.487 | 1.312 | 14.578 | 67.487 | 1.659 | 18.429 | 67.487 |

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