Use of Multivariate Data Analysis in Marketing and Market Research

Multivariate analysis examines patterns and correlations between multiple variables by analyzing the factors simultaneously. In the context of marketing, it usually means analyzing the multiple variables in consumer behavior to understand the customer base and the trajectory of a product or brand. It helps marketers get insights into how different variables interact with each other in complex scenarios and have an impact on consumer choices. These insights help in setting the most acceptable pricing, develop customized offers, create personalized messaging and devise media planning and strategies. Any company that is medium to large sized must use multivariate data analysis for market research analysis of consumer data and to improve marketing performance.

Different methods of multivariate analysis

• Multiple linear regression

This process helps examine the relationship between one dependent variable and two or more independent variables. One use case of this process is predicting website traffic based on social media spends across platforms.

• Multiple logistic regression

This analysis helps determine the probability of a specific event occurring. It is useful to zero in on binary outcomes, such as whether a client will contract with a company or not.

• Multiple analysis of variance (MANOVA)

MANOVA compares the means of multiple dependent variables across different groups.

• Cluster analysis

This analysis groups similar data points together based on different characteristics which classifies an audience set.

• Discriminant analysis 

This is composed of one or multiple discriminant functions and it classifies observations into predefined groups based on linear combinations of the predictor variables that provide the best discrimination between the groups.

• Conjoint analysis

This analysis assesses consumer preferences by analyzing trade-offs between product attributes.

• Correlation analysis

This process measures the strength and characteristics of relationships between multiple variables.

Applications of multivariate analysis in marketing

Multiple analyses are used in marketing and market research to reduce data, scale and perceptual map, market segmentation, predict and forecast, and create market research reports and analyses.

Consumer behavior analysis 

Multivariate analysis helps in identifying patterns by examining demographics, preferences, purchase history, etc, and create market segments using clustering techniques. Cluster analysis uses statistical techniques to divide customers into segments based on similarities and differences. Market segmentation is in fact one of the most common uses of multivariate analysis. The segmentation further helps in devising targeted marketing strategies and positioning of the product in an effective way.

Data reduction, product and pricing strategy

While a product designer or a manufacturer may find 100 attributes to be attractive in a product, there are a certain number of attributes that stand out to the consumer and the willingness to pay for that product or that brand is based on this value perception. Sometimes it’s not even a conscious choice and the customer may not be completely aware of the features that they prefer over the other. Techniques like factor analysis and discriminant analysis can boil dozens of attributes down to two or three significant, easily interpreted attitudes. 

Conjoint analysis helps market researchers identify the characteristics that consumers value the most and, accordingly, make informed decisions about pricing, product features, and sales and marketing activities. 

Sales forecasting

Predicting future sales depends on several factors, such as demographics, psychographics, changing preferences and trends, movements in the economy, etc. Even in trend analysis, future activity is generally not a simple function of a straight-line projection and can be cyclical in nature with seasonal factors. All of these can be effectively modeled through multivariate techniques. 

How can a market research company help you with the process?

Multivariate techniques have been developed to deal specifically with forecast and projection, obtaining mathematical results with minimum error given the input data. Market research companies like Borderless Access are a boon for this process. They help you understand complex relationships between multiple variables. Borderless Access conducts the research using a variety of data analysis tools, including SAS, RStudio, Python, and SPSS. This helps in tasks such as testing hypotheses, making predictions, and understanding customer behavior.

Borderless Access data reporting tools also include SQL Server, PowerBI, and Tableau, which are used to create easy-to-understand data visualizations. These visualizations can help clients gain a comprehensive understanding of their information landscape.

In conclusion, while multivariate analysis offers a powerful toolkit for market research, market research companies truly unlock its potential. Their expertise transforms complex data into actionable insights through these techniques, equipping reports with data-backed evidence. This empowers researchers to make clear, simplified decisions that optimize business outcomes.