College of Arts and Sciences

Cebu Normal University

Osmeña Blvd., Cebu City

An Output of Math 4002 (Statistics for Scientific Research)

CONSUMER’S DISCERNMENT ON “BRANDED” PRODUCTS

A Case Study of Poblacion, Talisay City Using Factor Analysis

By:

MR. CIRILO C. GASTANES, Jr.

#12-002269

Submitted to:

DR. GLEN MANDAWE PESOLE

Professor, Math 4002
I. INTRODUCTION

Brgy. Poblacion – capital of Talisay City, Cebu, is quiet, peaceful, urban residential area

south of Cebu City. It has several private schools, a central public school, some small

scale business establishments and a number of warehouses. Its population estimate as of

2010 was around 12, 100 registered individuals *. Most of its residents are professionals

and are working in different parts of the city as well as in the neighbouring cities.

Opening a Store on “Branded” Products

An owner of several chains of stores in Cebu City is planning to open a new branch in Brgy.

Poblacion, Talisay City. But he wanted the new branch to be unique and special and of a

higher class. They wanted that it sells ‘branded’ products exclusively.

Imitation or “pirated” products nowadays are quite common in the market, and are familiar

sights in sidewalk stores and even in some well established businesses. This makes

“branded” products somehow a hard sale in business. But the store owner who desire to

open a new branch believe that he could make enough sale only if he knew some factors

that would affect costumer’s perception about the said product. A survey on how and

what consumers think in considering buying ‘branded’ products is then in order.

* www.talisaycitycebu.gov.ph
II. PROBLEM STATEMENT

We are interested in determining the factors which customers keep in mind when they mull

over ‘branded’ products. Considering this, a sample of 20 Talisaynon, as respondents, was

then selected. A set of ten statements were made ready reflecting the different

characteristics of the measured products and had the questionnaires bearing this set

solicited among the respondents. The selected respondents were then asked to rate each

statement from 1 to 7 (with 1 = completely agree, 4 = neutral, 7 = completely disagree). It

is assumed that the answers of the respondents were founded on their discernment about

the traits of ‘branded’ products.

A Brief Description of the Respondents

(1) All respondents are working professionals.

(2) Age Structure:

Respondent’s age range from 22 years to 55 years. About 30% of them are less than 30

years old, 55% are between the age of 30 and 50 years, and the rest are above 50 years

old.

(3) Marital Status:

About 75% of the respondents are already married.

The ten statements were as follows:

Rank

Sr Name of 1 = completely agree

Statements
No. Variable 4 = neutral
7 = completely disagree

1 Branded products are well warranted. Warranty 1 2 3 4 5 6 7

I like the way branded products are

2
advertised.
Advertisement 1 2 3 4 5 6 7

Having branded products get me what I

3
exactly paid for.
Payback 1 2 3 4 5 6 7

I buy branded products simply because I

4
can afford them.
Affordable 1 2 3 4 5 6 7

Having branded products make me feel

5
superior and stand out.
Superiority 1 2 3 4 5 6 7

I choose branded products because of

6 Quality 1 2 3 4 5 6 7
their quality and durability.

Using (or having branded products)

7 boosts my self-confidence (or self- Self-confidence 1 2 3 4 5 6 7
esteem).

I feel people get attracted to me when I

8
have (or when I use) branded products.
Attraction 1 2 3 4 5 6 7

Not everyone have them, and those who

9 don’t have them tend to look up to me Jealous 1 2 3 4 5 6 7
(or get jealous of me).

Branded products are endorsed and used

10 by personalities (or celebrities) that I Endorsed 1 2 3 4 5 6 7
trusted and/or idolized.
III. DATA GATHERED

The answers given by the 20 respondents on a scale of 1 to 7 are as follows:

Statement Nos.
Respondents
1 2 3 4 5 6 7 8 9 10
1 2 1 3 6 2 1 2 4 4 4
2 1 4 2 3 3 2 3 3 3 3
3 1 4 1 7 7 1 4 7 7 7
4 2 6 2 5 7 1 3 5 7 7
5 2 5 2 7 4 1 4 4 6 5
6 1 2 2 2 2 2 3 2 3 3
7 1 4 1 4 4 1 4 4 4 1
8 1 6 3 7 6 1 3 7 7 7
9 4 2 3 7 7 1 7 7 4 4
10 2 2 4 4 4 2 4 4 4 3
11 1 4 1 6 6 1 2 3 6 4
12 1 3 2 1 2 1 2 3 3 3
13 3 4 3 4 7 2 4 5 7 6
14 2 4 2 7 5 1 2 7 7 7
15 2 1 2 4 3 1 1 4 6 3
16 4 4 1 1 7 1 1 4 4 4
17 2 1 2 4 7 1 3 6 7 7
18 1 4 2 5 4 1 4 7 7 4
19 7 2 4 4 7 1 7 7 7 7
20 2 2 2 1 7 1 3 7 7 3
Applying Factor Analysis with the aide of Minitab, the following data were collected:

Table 1 : Principal Component Factor Analysis of the Correlation Matrix

Unrotated Factor Loadings and Communalities

Variable Factor1 Factor2 Factor3 Factor4 Factor5 Factor6 Factor7

warranty 0.485 0.654 -0.342 -0.149 0.117 -0.387 -0.024
advertisement 0.243 -0.605 0.442 -0.401 0.323 -0.179 0.285
payback 0.267 0.791 0.328 0.099 -0.271 -0.093 0.263
affordable 0.557 -0.242 0.536 0.485 0.075 -0.125 -0.255
superiority 0.789 -0.040 -0.262 -0.419 0.140 0.104 -0.205
quality -0.438 0.425 0.517 -0.486 -0.186 0.217 -0.165
self-confidence 0.506 0.597 0.234 0.066 0.494 0.192 -0.038
attraction 0.871 0.025 -0.113 0.158 -0.007 0.322 0.190
jealous 0.815 -0.294 -0.059 -0.062 -0.320 0.185 0.060
endorsed 0.815 -0.139 0.165 -0.160 -0.343 -0.233 -0.112

Variance 3.8336 2.1219 1.1417 0.8978 0.7151 0.4936 0.3386

% Var 0.383 0.212 0.114 0.090 0.072 0.049 0.034

Variable Factor8 Factor9 Factor10 Communality

warranty -0.093 0.006 -0.157 1.000
advertisement -0.018 0.026 -0.025 1.000
payback -0.006 0.142 0.119 1.000
affordable -0.052 0.131 -0.057 1.000
superiority 0.036 0.211 0.120 1.000
quality -0.007 0.018 -0.121 1.000
self-confidence -0.039 -0.198 0.074 1.000
attraction 0.190 0.049 -0.156 1.000
jealous -0.311 -0.072 -0.005 1.000
endorsed 0.192 -0.199 0.045 1.000

Variance 0.1845 0.1698 0.1034 10.0000

% Var 0.018 0.017 0.010 1.000
Utilizing Catell’s Scree test and still with the aide of Minitab, the plot below was obtained:

Figure 1: Scree Plot

Scree Plot of warranty, ..., endorsed

4

3
Eigenvalue

0
1 2 3 4 5 6 7 8 9 10
Factor Number
IV. DATA ANALYSIS AND INTERPRETATION

The Scree plot in Figure 1 shows Eigen values of the factors. As recommended by Catell, we

retain only the factors above the elbow, or break in the plot as these factors contribute the

significant description of the variance of the gathered data.

Using Factor Analysis again with the aide of Minitab and considering only the upper three

factors, we have the following table:

Table 2:

Principal Component Factor Analysis of the Correlation Matrix

Unrotated Factor Loadings and Communalities

Variable Factor1 Factor2 Factor3 Communality

warranty 0.485 0.654 -0.342 0.780
advertisement 0.243 -0.605 0.442 0.620
payback 0.267 0.791 0.328 0.804
affordable 0.557 -0.242 0.536 0.656
superiority 0.789 -0.040 -0.262 0.692
quality -0.438 0.425 0.517 0.640
self-confidence 0.506 0.597 0.234 0.667
attractio 0.871 0.025 -0.113 0.772
jealous 0.815 -0.294 -0.059 0.754
endorsed 0.815 -0.139 0.165 0.711

Variance 3.8336 2.1219 1.1417 7.0972

% Var 0.383 0.212 0.114 0.710

Factor Score Coefficients

Variable Factor1 Factor2 Factor3

warranty 0.127 0.308 -0.300
advertisement 0.063 -0.285 0.387
payback 0.070 0.373 0.288
affordable 0.145 -0.114 0.470
superiority 0.206 -0.019 -0.229
quality -0.114 0.200 0.453
self-confidence 0.132 0.281 0.205
attractio 0.227 0.012 -0.099
jealous 0.213 -0.138 -0.052
endorsed 0.213 -0.065 0.144
Looking at Table 2, we find the characteristics like: attraction, jealous, endorsed and

superiority have loading of 0.871, 0.815, 0.815 and 0.789 respectively on Factor 1. This

implies that Factor 1 is a combination of these four variables. We can call this factor as

“Self Boosting Effect” of the “branded” products. Factor 1 alone makes up 38.3% (as can

be seen in % variance on Table 2) variation in Consumer’s Discernment about “branded”

products.

For Factor 2; we have payback and warranty with high loading of 0.791 and 0.654

respectively, suggesting that Factor 2 is a mixture of these variables. We call these

variables together into a factor called “Product Guarantee”. This independently

contributes 21.2% variations (see % variance on Table 2).

And as for Factor 3, we see affordable, quality, and advertisement with loading of 0.536,

0.517 and 0.442 respectively. We will name the combination of these three factors as

“Availability” of the “branded” products; and this factor independently contributes 11.4%

variation in Consumer’s Discernment about “branded” products.

V. CONCLUSION

From the data gathered, analyze and interpreted, we can then inform the store owner what

consumers in Brgy. Poblacion, Talisay City think when considering buying “branded”

products. And that these factors: Self Boosting Effect (38.3%), Product Guarantee

(21.2%) and Availability (11.4%) together comprise a total of 70.9% of the variations of

the given set of variables in Consumer’s Discernment about “branded” products.

We can then recommend to the store owner to think, make use and consider these factors in

opening a new branch of store so it would succeed amidst the threats of “imitation”

and/or “pirated products.

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