Multivariate analysis is mostly used in applications that wish to establish a relation in peoples’
behavior to certain factors. Multivariate analysis is very crucial to businesses, especially the
marketing departments that have to constantly do market researches. Multivariate analysis is
used when a number of variables are to be measured on individual units in a sample population.
Majority of the business problems by nature have multiple dimensions meaning that the
managers are interested in diverse aspects of the customers, purchasing behaviors, as well as the
competitors’ brands. The managers may be interested in consumer aspects such as their
distribution, class, lifestyle and shopping habits.
Multivariate techniques are categorized into: factor analysis techniques, multi-dimensional
scaling techniques, and cluster analysis techniques. Factor analysis focuses on procedures that
minimize large data variables in to reduced variable groups. The techniques applied end up
summarizing the data into easy to work with data. Factor analysis is efficient in determining the
causes of correlations between groups of variables. An example is in the determination of
observable characteristics in people who frequent the shops in the stylish retail stores.
Factor analysis is also applicable if there exists uncorrelated variables. In situations where a new
variable is introduced to replace an old one, the new variable is uncorrelated with the older
variables. Therefore, factor analysis has to be done afresh. For example, a characteristic may be
used as an independent variable to show the cause of discrepancies in age based purchases from
the stylish retail stores. Organizations use factor analysis to explain how employees are engaged
to their work in the organization.
The second technique, multi-dimensional scaling is used in applications where the researcher
wishes to visually represent the individual’s beliefs and preferences. The variables that influence
the beliefs and responses towards a product are mapped clearly on the axes where they are easily