INDIAN INSTITUTE OF MANAGEMENT BANGALORE

PGP RMD – 5th Term

Case – Factor Analysis

Alpha Car manufacturer wants to release a small car into the market. However, the company
does not have any cleared idea about the factors (i.e., sum of variables) its potential
customers think about when they purchase a car. The company appoints a MR consultant to
investigate the issue. The consultant collected data from 20 potential customers about their
perceptions and image attributes of small cars. Ten (10) questions were asked to each of
them, all answered on a scale of 1 to 7 (1 = completely disagree, 7 = complete agree). The
questions/statements/observed variables are as follows.

1. The price of the car should be reasonable (V1).

2. Fuel mileage of the car should be at least 17 km/hr (V2).
3. A small car should be easy to maintain and to be serviced (V3).
4. Seating should be comfortable for four adults (V4).
5. A small car should have adequate leg space and headroom (V5).
6. Brakes are the most critical part of a small car (V6).
7. Collapsible steering column should be standard equipment in all the new cars (V7).
8. Power steering is a must (V8).
9. Interior accessories of a small car should be attractive (V9).
10. Adequate space for luggage (V10).

Assignment questions

 What factors influencing the potential buyers of the company to purchase a small car?