A Project On Consumer

2009 submitted
GLobsyn Business School
project to professor gautam
bhattacharya
Taste and Preferences
For Set Top Box
Installation
The project is conducted using Factor
Analysis as a statistical tool for studying
the behavioural pattern of the consumers
By ANANYA MUKHERJEE
Acknowledgement

I am extremely thankful to our faculty

Professor Gautam Bhattacharya , Professor
of National Institute Of Technology
(Durgapur) who have guided us throughout
the project for analyzing the consumer
behavioural pattern using Factor and
Cluster Analysis as a Statistical tool and
helped us in all possible ways to complete
the project .
Executive Summary
Our research intends to provide an overview of the
consumer behaviour and their tastes and preferences
regarding the use of Dish TV and Set Top Box in Indian
Context. Although the launch of the DTH service and
set top box has an overwhelming impact backed with
a phenomenal response in the Western countries, the
Indian market is yet to flourish, as compared to the
First world Countries. Yet the Indian market has a huge
prospect . This report should provide an insight about
the consumer choices and their approach about the
DTH and set top box market in India.
INTRODUCTION
Background Of The
Research

The direct home to home (DTH) TV sector in India continues to expand rapidly,
attracting large investments from new and existing players over past few years
and is showing no signs of slowing down due to economic recession. The DTH
market which began commercial operations in 2003 has been able to acquire
over 12 million subscribers during the past six years. As per “ Indian DTH market
forecast to 2012”, the number of DTH subscribers are forecasted to grow at a
CAGR of around 25% during 2009-2012. Currently , the Indian DTH market is
being served by the five private players , Dish TV, Tata Sky, Sun Direct, Big TV
and Airtel Digital TV. Given the superior quality of DTH services in terms of
viewing and interactivity, the number of DTH subscribers has been soaring.
However, the current number of DTH subscribers constitutes only a meager
population of the total number of TV households, indicating vast future growth
potential.

This research provides extensive research and rational analysis about the set top
box market in India. India is an important and growing market for set top box.
By 2012 India’s pay TV market is expected to reach 90 million subscribers.
Though imports constitute a major share of set top boxes, due to Government’s
incentives to encourage Indian Companies to manufacture them, the demand for
STB will increase considerably. It can be estimated in the range of greater than
1.0 billion US $ worth market for STB by 2012. The semi conductor Companies
actively involved in selling STB devices in Indian market are ST Microelectronics,
national Semiconductor, NXP and Broadcom. Tensilica is another fables firm with
STB device offerings.

The STM 5107 from ST Microelectronics is fully developed at ST’s India design
centre. National Semiconductor has sold geode processor based STB solutions to
some key customers in India. Just few days back Bharti Airtel has selected
Broad Com’s satellite Set Top Box system on a chip solutions to power its direct
home to home TV service. Therefore we can say that India’s TV and consumer
market is sure to present some pleasant surprise opportunities to the semi
conductor and other electronic component Companies.
Need And Objective Of The
Research

The primary purpose of the research is to gain an insight on taste and the
consumer behaviour when it comes to an installation of Set Top Box. Through
our research we have tried to locate the specific qualities which the consumer
prefer while going for a DTH and set top box service. It can be said beyond any
shadow of doubt that price, quality and durability are the three main aspects
which influences a consumer while buying a product.

Amongst the 90 million expected subscribers in 2012 more than 50% buyers will
belong to a mediocre income level. So the aim of the research is to provide an
insight to the kind of service that can be provided at a minimum cost in order to
capture the more of the mediocre market. For this purpose we have designed the
questionaires in such a way so that it reflects the choices of the consumers not
only in terms of the kind of service they look forward to but also taking the price
factor into consideration as well. Moreover, the kind of research tool that we
have utilized in order to generate the results will yield the highly correlated
factors which reveals some specific consumer preferences. This in turn is helpful,
in determining the quality of service that can be provided and it provides a scope
for further improvement. As mentioned earlier repeatedly. Our

basic aim is to gain an insight of the consumer choices. It will also help in
determining the prospective customers of set top box in India. Hence there are
two basic objectives of this study.
 a) Locate the section of population that may be a potential
customers for this Set Top Box Service. b) Find out the
causes (e.g. Socio-Economic, Psycological causes, habits
etc.) for which customer’s interest about Set Top Box differs
from individual to individual.

Key words
Factor Analysis, orthogonal Transformation, Communalities, Eigen
values, Correlation, Standard Deviation, Bartlett Test of Spherecity,
Kaiser Meyer Olkin test, Variance, Principal Component analysis,
Kolmogorov Test of Normality, Multi-collinearity, Factor loading, Five
Point Likert Scale, Random Sampling, Primary data, Secondary Data.

Research Methodology

This section describes the design of the research methodology and aims to
improve assurance that appropriate procedures were followed. This research
seeks to examine the perception of the consumers about DTH service in India.

Type Of Research

The research design of the project is a type of descriptive research ; this is

because the research looks to identify the factors underlying consumer’s
perception about Set Top Box and DTH service in India. This research looks to
identify the psyche that drives the consumers to react in a certain way while
buying set top box or going for a DTH service. The descriptive research also
known as statistical research, describes the data and characteristics about the
population or the phenomenon being studied. Descriptive research answers the
question who, what, where and how.

Sources And Tools Of Data

Collection

Primary data: The data is gathered through a survey based research

approach with the help of a questionnaire. The respondents lie within the age of
22-51 years . Questionaires have some pertinent advantage over some other
types of surveys which is why it was selected as a research tool. They are
economical, do not require as much effort as in verbal and telephone survey and
often have standardized answer to make it simple to compile data. It is also easy
for the respondents to file the questionnaire rather than think extensively and
answer it in depth interview questions.

Secondary Data: These sources are books, articles, various web sites and
research papers.
Sampling Techniques: Random sampling methods were used to collect the
data as the questionaires are distributed. The targeted respondents ranged from
22-51 years of age . Simple Random sampling is used because each individual is
choosen randomly and entirely by chance, such that each individual has the
same probability of being choosen at any stage during the sampling process, and
each subset of k- individuals has the same probability of being choosen for the
sample as any other sub set of k individuals .

Sample Size: Regarding the sample size question, generally a sample of

fewer than 50 observations would not factor analyze and preferably the sample
size should be 100 and larger. For this reason we have taken 105 observations.
As a general rule the minimum is to have at least five times as many
observations as the number of variables to be analyzed, and the more
acceptable sample size would have 10:1 ratio.

Scale used in Questionnaire: 15 different questions were asked in order to

know the respondents perception regarding various aspects which come into
play while they think about the DTH service. A FIVE POINT LIKERT SCALE was
used and the respondents were asked to rate where -2 represents strongly agree
and 2 represents strongly disagree.

Data Analysis

The population of this study encompassed mostly students, the purpose to

involve students included to get an idea about the perception of the youth about
the Set Top Box in the Indian context. The result of surveying this population
produced an effective sample size of respondents.

In the assessment of 21 variables, which assess consumer perceptions and

choices about the entertainment media were measured in a five point likert scale
in which respondents were asked to indicate their perceptions. The respondents
were asked to fill a questionnaire mentioning the factors measuring their
perception. In the research respondents were intercepted and asked to
participate in a survey.
Prospective customer: The communication company has several of ideas
about who are the potential customers for this service. They think that the
highest potential is among television viewers who own video recorders and rent
video films. They think that users of competitive services such as cable and DTH
services might be potential customers. But the company believes that people
who prefer to go out to the cinema or to the theatre are not good prospects and
the customer must be urban.

Video owners: The first step is to find out how many owners of video recorders
there are in the sample by running a frequency table, which is shown in Figure 1.
The table shows that 105 questionnaire forms were entered. 64 respondents do
not own video recorders, which represents 61% of the total respondents. 40
respondents own video recorders and are 38.1% of the respondents. 1 (or 0.9%)
of the respondents did not answer the question, so no data was entered.
Without including this 1 in the analysis of video ownership, the column labeled
Valid Percent tells us that about 61.5% do not own video recorders and about
38.5% do(approximately one third of the population only).If management is right,
and the sample does represent the population, 38.5% represents a very low
prospects for the company.

Prospective customer surveys such as this one usually try to get some
information about the respondents’ possible interest in the product or service. .

. Figure-2 shows the tabulation of the Interest in Set Top Box question(Question
No. 12). It shows that 65.7% of those surveyed expressed some interest.

Figure 1: Frequency table for the video recorder ownership

Cumulative

Frequency Percent Valid Percent Percent

Valid No 64 61.0 61.5 61.5

Yes 40 38.1 38.5 100.0

Total 104 99.0 100.0

Missing System 1 1.0

Total 105 100.0

 Figure 2:
Frequency table for
Frequency Percent interest in Set Top
Box

Valid No 25 23.8

May be/It depends 69 65.7

Don't know/No
11 10.5
answer

Total 105 100.0

The next step is to cross-tabulate video ownership with the question about
interest in Set Top Box, the results of which are shown in Figure 3. Amazingly
the table shows (by reading the row percents) that the majority or 39.4% of non
video owners expressed an interest. Reading the table percent in that cell shows
that 66.3% of the population might be potential customers. It should give some
additional enthusiasm to the company.

Figure 3: Cross-tabulation of video recorder ownership by interest in the Set Top Box
 Interested in Set Top Box

May be/It Don't know/No

No depends answer Total

video recorder No Count 15 41 8 64

ownership
% of Total 14.4% 39.4% 7.7% 61.5%

Yes Count 10 28 2 40

% of Total 9.6% 26.9% 1.9% 38.5%

Total Count 25 69 10 104

% of Total 24.0% 66.3% 9.6% 100.0%

Experienced researchers learn how to read differences that are revealed in these
tables, but they ask for statistical support as well. The Chi-square statistics for
the table in Figure 3 are shown in Figure 4. The fact that the significance level
for the Pearson chi-square is reported as .450 tells us that the differences shown
in the cells of the table aren’t representing real differences in the population
from which the sample was drawn. So the researcher may not feel confident
about reporting these results to management.

Figure 4: Chi-square statistics

Value df Asymp. Sig. (2-sided)

Pearson Chi-Square 1.596a 2 .450

Tables like that shown in Figure 3 are easy to read for experienced researchers,
and an entire set of cell statistics and measures of association can be requested.
However, this kind of output is not appropriate to show management. Therefore,
we want to present the results in graphical form, which is shown in Figure 5. The
bar chart shows more dramatically that a higher proportion of population who
might be interested in Set Top Box , have no video recorder.
Figure 5: Bar chart for video recorder ownership and Set Top Box

Viewer frequency:

Management also thinks that potential customers for set top box can be found
among frequent television viewers, regardless of whether they watch standard
TV, cable, DTH or rent videos. Two frequency questions were asked in the
survey: the average number of hours per day of television viewing and the
average number of days per week. SPSS can multiply these variables to get
some idea of the number of hours per week the respondent watches television.

To check management's idea about frequent viewers, we ask for the mean
number of hours per week by the respondents' interest in Set Top Box, which is
shown in
. People who respond positively to the new service do watch television less than
those who are not interested: 15 hours per week compared to 17 hours per
week. It also doesn’t support the assumption of management about the potential
customers.

One way of testing conclusions about differences is an analysis of variance test

that helps support a conclusion that the difference in means of the three groups
cannot be attributed only to the natural variability in the population. A
researcher wants to be able to conclude that these groups come from sub-
populations that actually have different viewing habits. The results of the
analysis of variance test for the table in

is shown in Figure 7. Again, the reported significance value of nearly one gives
the conclusion that there are no such differences in the population.
 Figure 7: Analysis of variance statistics

Sum of
Squares df Mean Square F Sig.

Between Groups 96.539 22 4.388 .605 .909

Within Groups 594.661 82 7.252

Total 691.200 104

A way to visualize the information in

 is in a box plot, as shown in Figure8.The boxes represent the middle 50% of the
distribution (the 25th to the 75th percentiles), and the dark line shows the median.
The lines (or “whiskers”) show the remaining distributions. However, points
beyond 1.5 box lengths are called outliers, some of which shows up for the May
be/It depends category (marked with the weekly viewing hour). We can see that
there are no such differences in the distributions. The Non interested group
shows more weekly television watching, and the DK/NA group shows the least.
Figure-7 shows the box plot of weekly viewing hours by interest in set top box.
Viewer frequency types:
We would like to create a categorical variable that records light, medium and
heavy television viewers. First, we ask for a histogram of weekly viewing hours
to look at the entire distribution. The histogram in Figure 8 shows that weekly
viewing is not normally distributed (the line represents a normal distribution). It
can be seen that most respondents to the survey view less than the mean of
15.69 hours and that the distribution is skewed to the right because of some
people who view television more than 50 hours per week.
Figure 8: Histogram of weekly television viewing hours

The distribution shown in Figure 8 looks like it might be divided into three
groups. The first group seems to divide somewhere around 8 hours, and the
second group seems to divide somewhere around 21 hours. To divide the
sample into three equal parts, we can ask SPSS to give us the dividing values
(33.3 and 66.7 percentile values) as shown in Figure 9..

Figure 9: Percentile values for weekly viewing hours

Valid 105
Observation
s
Missing 0

33.3 8
Percentiles
66.7 21
Using the variable recoding facility in SPSS, it is easy to divide whole sample into
three viewer categories: light (up to 8 hours), medium (between 8 and 21hours),
and heavy (over 21 hours). A pie chart of this new variable is shown in Figure
10.

Figure 10: Pie chart of television viewer type

A bar chart showing the viewer frequency type by the Set Top Box interest
question is shown in Figure 11. The results seem to indicate that people who are
heavy viewers are not interested in Set Top Box. However, if we look at the bars
for medium & Low viewers, we can see that there really isn't much of a
difference between them.
Figure 11: Bar chart of interest by television viewer type

To confirm our visual conclusion from the bar chart in Figure 11, we can produce
the cross-tabulation shown in figure-13. The Pearson chi-square significance
indicates that there is probably no real differences. The row percentages show
that Heavy viewers seem to be different from medium and Light viewers, but
these last two categories are not very different from each other.

Figure 12: Cross-tabulation of viewer type by interest in

 Interest in Set Top Box Total

No May be/It Don't

depends know/ No
answer

Type Light 7 28 3 38
of
18.4% 73.7% 7.9% 100.0%
Viewe
r
Medium 11 28 7 46

23.9% 60.9% 15.2% 100.0%

Heavy 7 13 1 21

33.3% 61.9% 4.8% 100.0%

Total 25 69 11 105

23.8% 65.7% 10.5% 100.0%

Chi-Square Tests

Valu df Asymp.
e Sig. (2-
sided)

Pearson 3.72 4 .445

a
Chi- 5
Square

Market research tables:

We can report results to management using a compact table that contains a
great deal of information such as that shown in Figure 13. For example, if we
look across the rows for possible interest in Set Top Box, we can see a notable
result that a small proportion of respondents are ‘video owners’ (32.1% of light
viewers, 39.3% of medium viewers and 61.5% among heavy viewers).
Continuing across, we can see a moralless same result for DTH subscribers
(28.6% of light viewers, 7.1% of medium viewers and 23.1% among heavy
viewers).
Every kind of viewers who express some interest in Set Top Box are cable
subscribers (85.7% of light viewers, 92.9% of medium viewers and 92.3% among
heavy viewers).This may be a target population for the management.

Figure 13: Table of viewer type by Set Top Box interest and video, DTH Service and cable ownership

Ty
Do you have video Are any of your Tv Are any of your
pe
of recorder ? connected to a DTH television Connected
Vi service? to a cable network?
e
w
No Yes No Yes No Yes
er

Cou Row Cou Row Cou Row Co Row Co Row Cou Row
nt % nt % nt % unt % unt % nt %

I No Light 5 71.4 2 28.6 7 100 0 0% 1 14.3 6 85.7

n % % % % %
t
Medi 6 54.5 5 45.5 10 90.9 1 9.1% 1 9.1% 10 90.9
e
um % % % %
r
e
Heav 4 57.1 3 42.9 5 71.4 2 28.6 2 28.6 5 71.4
s
y % % % % % %
t
May Light 19 67.9 9 32.1 20 71.4 8 28.6 4 14.3 24 85.7
i be/It % % % % % %
n depen
Medi 17 60.7 11 39.3 26 92.9 2 7.1% 2 7.1% 26 92.9
ds
um % % % %
S
e Heav 5 38.5 8 61.5 10 76.9 3 23.1 1 7.7% 12 92.3
t y % % % % %

T Don't Light 2 100 0 .0% 1 50% 1 50% 0 0% 2 100

o know/ % %
p No
Medi 6 85.7 1 14.3 7 100 0 0% 3 42.9 4 57.1
answe
um % % % % %
B r
o Heav 0 .0% 1 100 1 100 0 0% 0 0% 1 100
x y % % %

Factor Analysis
The general purpose of Factor Analytic techniques is to find a way to condense
the information contained in a number of original variables into a smaller set of
new, composite dimensions with a minimum loss of information. In summarizing
the data, factor analysis derives underlying dimensions when interpreted and
understood, describe the data in a much smaller number of concepts than the
original individual.

There are a number of different varieties of factor analysis, the discussion here is
limited to Principal Axis Factor Analysis and the factor solutions in which the
common factors are uncorrelated to each other. It is also assumed that the
observed variables are standardized ( mean zero, standards deviation of one)
and the factor analysis is based on the correlation matrix of the observed
variables.

Why carry out a factor analysis? In the first place, if we can summarize a
multitude of measurements with a smaller number of factors without loosing
too much information, we have some economy of description, which is one of the
goals of scientific investigation. Secondly, in order to achieve the economy of
interpretation the factor analysis group those variables having high correlation. If
the data is highly inconsistent, it becomes difficult for a researcher to interpret
the results. Factor Analytics methods seek to provide a solution to this difficulty
in interpretation by condensing the number of variables without loosing too
much information, and yet providing a meaningful result.

A descriptive statistical analysis of our data set clearly indicates that there exists
multicollinearity among the variables i.e. the correlation is fairly high among the
variables.

Inspection of the correlation matrix reveals that the variables are significantly
correlated at .01 level and .05 level which provides an adequate basis for
proceeding to an empirical examination of adequacy of factor analysis.
Tabulating, the number of significant correlations per variable finds a range
from .231 to .376 .Although no limits are placed on what is high or what is too
low, variables that have no significant correlations may not be a part of any
factor and if the variables have high correlations may be a part of many factors.
Secondly the standard deviations are fairly high as well, (refer to the table). It is
also possible that factor analysis will allow us to test theories involving variables
which are hard to measure directly. This study demonstrates the role of a
Principal component analysis in conducting an analysis to determine the factors
underlying consumer perceptions about DTH services and installation of set top
boxes. A set of 21 items measuring consumer perceptions are constructed .
The Name of the 21 variables are

1) In enjoy going to cinema.

2) I like a wide range of choice in the video shop.
3) My leisure activities are mainly out of the home.
4) I would rather watch a TV than go out for a video.
5) The TV is always on in my household.
6) The choice of films on TV is limited.
7) I do not agree with having to pay TV licenses.
8) Satellite and cable offer wider choices of films.
9) I am tele addict.
10)Satellite dishes are a blot on the environment.
11)I often forget to return a rented video film.
12)I rarely have time to sit down and watch TV.
13)I prefer films over weekly serials.
14)Commercial channels offer enough choices.
15)I get annoyed if the video I want is out.
16)Ads in the middle of the programme annoy me.
17)I prefer the cinema over watching videos.
18)Satellite and cable need more film selections.
19)Videos are an excellent form of entertainment.
20)I don’t mind paying more for TV programmes.
21)TV is a last resort in entertainment.
Interpreting The Result
From SPSS
Preliminary Analysis

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .622

Bartlett's Test of Sphericity Approx. Chi-Square 461.260

df 210

Sig. .000

Table-1 shows several very important parts of the output. The Kaiser Meyer Olkin
measure of sampling adequacy and Barlett Test Of Spherecity. The KMO statistic
varies between 0 and 1. A value of 0 indicates that the sum of the partial
correlations are large relative to the sum of the correlations indicating diffusion
in the pattern of correlations( hence, factor analysis is appropriate). A value
close to 1 indicates that patterns of correlations are relatively compact and so
factor analysis should yield distinct and reliable factors. Kaiser (1974)
recommended accepting values greater than 0.5 as acceptable (value below this
should either lead to collection of more data or rethink which variable to
include). Furthermore values .80 or above are considered meritorious, .70or
above mediocre, and below .50 is unacceptable. For this data the value is .622,
which falls into the range of being satisfactory, so we should be confident that
factor analysis is appropriate for this data. Bartlett’s measure tests the null
hypothesis that the original correlation matrix is an identity matrix. For factor
Analysis to be appropriate we need some relationships between the variables
and if the original matrix is an identity matrix then all the correlation coefficients
would be zero. Therefore, we want this test to be significant (i.e. having a
significant value of less than .05). here, the significance level is .000 which
indicates that the R- matrix is not an identity matrix, therefore, there are some
relationship between the variables we hope to include in the analysis. For this
data Bartlett Test is highly significant and therefore the analysis is appropriate.

Communalities Analysis

Communalities

Initial Extraction

Q.6.01 1.000 .474

Q.6.02 1.000 .653

Q.6.03 1.000 .673

Q.6.04 1.000 .633

Q.6.05 1.000 .467

Q.6.06 1.000 .575

Q.6.07 1.000 .480

Q.6.08 1.000 .675

Q.6.09 1.000 .759

Q.6.10 1.000 .665

Q.6.11 1.000 .620

Q.6.12 1.000 .530

Q.6.13 1.000 .583

Q.6.14 1.000 .634

Q.6.15 1.000 .598

Q.6.16 1.000 .529

Q.6.17 1.000 .669

Q.6.18 1.000 .656

Q.6.19 1.000 .713

Q.6.20 1.000 .589

Q.6.21 1.000 .691

Extraction Method: Principal

Component Analysis.

Table-2 shows communalities before and after extraction. Principal Component

analysis works on the assumption that all variance are common; therefore before
extraction the communalities are all 1. The communalities in the column
extraction reflect the common variance in the data structure. So for example,
we can say that 47.4% of variance associated with question 1 is shared or
common variance. Communalities basically indicates the amount of variance
explained in a variable that is accounted for by the factors taken together. The
size of the communality is an useful index for assessing the, how much
variance is accounted for by the factor solution. Higher the communalities values
it indicates that a larger amount of variance in the variable has been extracted
by the factor solution and vice versa. Although no statistical guidelines indicate
exactly what is large or small, practical considerations dictate a lower level of .50
in the analysis. After the extraction some of the factors are discarded and some
information is lost. In our analysis the variables which are retained for for further
analysis are very well explained and infact none of the variables are dropped
after extraction. For e.g. question no 9 shows an explained variance of .759
which is fairly high and all the other variables have communality values of more
than .50 except question no 1, 5 and 7. However considering the relevance of
these variables we retain them in our data set. Therefore as we proceed with
further analysis it will yield a more meaningful result.

Factor Extraction
 How do we decide on the number of factors to extract? The factor analysis
methods are interested in the best linear combination of variables- best in the
sense that the particular combination of original variables accounts for more of
the variance in the data as a whole than any other linear combination of
variables. Therefore, the first factor may be viewed as the single best summary
of linear relationships exhibited in the data. The second best linear combination
of the variables, subject to the constraint that it is orthogonal to the first factor.
To be orthogonal to the first factor,the second factor must be derived from the
variance remaining after the first factor is extracted. Thus, the second factor
may be defined as the linear combination of variables that accounts for the
most variance that is still unexplained for the after the effect of first factor being
removed from the data. The process continues extracting factors. accounting for
smaller and smaller amounts of variance until all the variance is explained. For
example, the Principal Component analysis method actually extracts n factors,
where n is the number of variables in the analysis.

So the question is how many factors to extract or retain? An exact qualitative

basis for deciding the number of factors to extract has not been developed.
However, the most commonly used criteria for the number of factors to extract is
the Latent Root Criterion.

Latent Root Criterion

The rationale of the latent root criterion is that any individual factor should
account for the variance of atleast single variable if it is to be retained for
interpretation. With p.c.a. each variable contributes a value of 1 to the total
eigen value. Thus, only the factors having latent root greater than 1 are
considered significant. i.e. all factors with latent root less than 1 are disregarded.

Table-3 lists the eigen values associated with each linear component before
extraction, after extraction and after rotation. Before extraction SPSS has
identified 21 linear components within the data set. The eigen values associated
with each factor represents the variance explained by the particular linear
component and SPSs also displays the eigen values in terms of the percentage of
variance explained. So factor -1 explains 15.174% of the total variance and
factor -2 explains 10.445% of the total variance and so on. It should be noted
that the first factor explained relatively large amount of variance whereas
subsequent factors explain only small amounts of variance. SPSS then extracts
all factors with eigen values greater than 1, which leaves us with 7 factors. The
eigen values associated with these factors are again displayed( and the
percentage of variance explained) in the columns labeled extraction sums of
squared loadings. The values in this part of the table are the same as the values
before extraction, except that the values for the discarded factors are ignored.
( hence the table is blank after the seventh factor). In the final part of the table
(labeled rotation sums of squared loadings), rotation are displayed. Rotation has
the effect of optimizing the factor structure and one consequence for these data
is that the relative importance of these seven factors are equalized. This is
because factor rotation simplifies the factor structure. Therefore, a rotational
method should be applied to achieve simpler and theoretically more meaningful
factor solutions. In most cases rotation of the factor improves the interpretation
by reducing some of the ambiguities that often accompany initial unrotated
factor solutions.

Total Variance Explained

Com Initial Eigenvalues Extraction Sums of Squared Rotation Sums of Squared Loadings
pone Loadings
nt
Total % of Cumulativ Total % of Cumulativ Total % of Cumulativ
Variance e% Variance e% Variance e%

1 3.186 15.174 15.174 3.186 15.174 15.174 2.505 11.930 11.930

2 2.193 10.445 25.618 2.193 10.445 25.618 1.882 8.960 20.890

3 1.911 9.101 34.719 1.911 9.101 34.719 1.778 8.469 29.359

4 1.718 8.182 42.901 1.718 8.182 42.901 1.724 8.208 37.568

5 1.448 6.897 49.798 1.448 6.897 49.798 1.707 8.127 45.695

6 1.317 6.270 56.068 1.317 6.270 56.068 1.687 8.034 53.729

7 1.092 5.201 61.269 1.092 5.201 61.269 1.583 7.540 61.269

8 .986 4.696 65.965

9 .903 4.300 70.265

10 .797 3.797 74.062

11 .778 3.705 77.767

12 .759 3.612 81.379

13 .623 2.966 84.346

14 .541 2.574 86.920

15 .499 2.376 89.296

16 .469 2.232 91.528

17 .453 2.156 93.685

18 .401 1.910 95.595

19 .344 1.637 97.232

20 .316 1.507 98.739

21 .265 1.261 100.000

Extraction Method: Principal Component Analysis.

The scree test is derived by plotting the latent roots against the number of
factors in their order of extraction, and the shape of the resulting curve is used
to evaluate the cutoff point. In figure-1
The first 21 variables are extracted in the study. Starting with the first factor, the
plot slopes steeply downward initially and slowly becomes an approximate
horizontal line. The point at which the curve begins to straighten out is
considered to indicate the maximum number of factors to extract. Another rule
of thumb is to plot all the eigen values in their descending order. The plot looks
like the side of a mountain and the scree refers to the debris fallen from a
mountain and lying at its base.

So the scree test proposes to stop analysis at the point where the mountain end,
and the debris( error) begin. In this instance, the point coincides with eigen value
criterion, i.e. the line becomes horizontal after the extraction of the 7 th factor is
over.

Rotated vs Unrotated Factor

Matrix
 Examine the factor matrix loadings for the
unrotated factor matrix

Factor loadings, in either the unrotated or rotated factor matrices, represents

the degree of association of each variable with each factor. The loadings take on
a key role in interpretation of the factors, particularly if they are used in ways
that requires characterization as to the substantive , meaning of the factors. The
objective of the factor analysis in these instances is to maximize the association
of each variable with the single factor, many times through rotation of the factor
matrix.

In our research we will first explain the unrotated factor matrix and determine
wheather the use of rotated solution is necessary.

Table-4 represents the unrotated component analysis factor matrix. To begin

the analysis, let us explain the numbers included in the table. Seven columns of
numbers are shown. It indicates the result of the seven factors that are
extracted.(i.e. factor loading of each variable on each of the factor) As expected
the factor solution extracts the factors in order of their importance, with factor -1
accounting for the most variance, factor-2 slightly less and so on.

Having defined the various elements of the unrotated factor matrix, let us
examine the factor loading patterns. As discussed earlier, the factor loadings
allow for the description of each factor and structure in the set of variables. As
anticipated, the first factor accounts for the largest amount of variance in the
table-3. The second factor is somewhat of a general factor with all of the
variables having high loadings,(high loadings are defined as greater than.40).
The third factor has only two loadings .The fourth and sixth factor has only 1
loading . a notable point is that although the seventh factor accounts for 5.201%
of variance as per table-3, none of the variables are loaded in this factor which is
kind of unusual. Based on this factor loading pattern with a relatively large
number of loadings on factor -1 and 2 and no loadings in factor -7, interpretation
becomes difficult and theoretically less meaningful. Therefore we can proceed to
rotate the factor matrix to redistribute the variance from earlier factors to later
factors. Rotation should result in a simpler and theoretically more meaningful
factor pattern. However, before proceeding with the rotation process, we must
examine the communalities to see whether any variables have communalities so
low that they should be eliminated.
 Component

1 2 3 4 5 6 7

Q.6.01

Q.6.02

Q.6.03 .593

Q.6.04 .652

Q.6.05 .514

Q.6.06

Q.6.07 .565

Q.6.08 .770

Q.6.09 .614

Q.6.10 .588

Q.6.11 .501

Q.6.12 -.565

Q.6.13 .511

Q.6.14 .626

Q.6.15

Q.6.16

Q.6.17 .621

Q.6.18 .614

Q.6.19 .534 .503

Q.6.20

Q.6.21

Extraction Method: Principal Component Analysis.

a. 7 components extracted.
Assess The Communalities
Of The Variables In The
unrotated Factor Matrix
The row sum squared factor loadings, known as communalities, shows the
amount of variance in a variable that is accounted for by the 7 factors taken
together. The communalities in table-2 are shown in the third column of the
table. For e.g the communality figure of .467 for variable(1) indicates that it has
less in common with the other variables included in the analysis than does
variable(9) which has a communality figure of .759.Both the variables, still share
more than 40% of their variance with the 7 factors. Therefore we can conclude
that all of the communalities are sufficiently high to proceed with the rotation of
the factor matrix.

Applying An Orthogonal
(Varimax) Rotation

Given the unrotated factor matrix did not have a completely clean set of factor
loadings, a rotation technique can be applied to hopefully improve the
interpretation. In this case the VARIMAX rotation is used and its impact on the
overall factor solution and factor loadings are described in the next section.

The varimax rotated component analysis factor matrix is shown in table-5. Please
note that the total amount of variance extracted is the same in the rotated
solution as it was in the unrotated one.
Rotated Component Matrixa

Component

1 2 3 4 5 6 7

Q.6.01 .643

Q.6.02 .603

Q.6.03 .601

Q.6.04 .699

Q.6.05 .504

Q.6.06 .704

Q.6.07 .664

Q.6.08 .650

Q.6.09 .627

Q.6.10 -.551

Q.6.11 .512

Q.6.12 -.516

Q.6.13 .662

Q.6.14 .696

Q.6.15 -.721

Q.6.16 .643

Q.6.17 .742

Q.6.18 .696

Q.6.19 .736

Q.6.20 .630

Q.6.21 .709

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 13 iterations.

Also, the communalities for each variable do not change when a rotation is
applied.Still, two differences emerge. First, the variance is redistributed so that
he factor loading pattern and the percentage of variance for each of the factors
are slightly different. Specifically, in the varimax rotated factor solution the first
factor accounts for 11.930% of variance compared to 15.174% in the unrotated
solution. Likewise, the other factors also changed, the largest change being the
factor 5, 6 and 7 . Initially the variance explained by these factors were 6.897%
6.270% and 5.201%. with the application of orthogonal transformation the
amount of variance explained by each of these factors increased to 8.127%,
8.034% and 7.540% respectively. Thus, the explanatory powers shifted to a
more even distribution because of rotation. Secondly,the interpretation of the
factor matrix is simplified as now we have now two considerably high factor
loadings in factor-7.

Findings Of The Study

Factor -1, seems to capture the consumers perception about the performance of
the electronic media when it is a question of offering wide range of choices to
the consumers. It also reveals the consumers preference of watching TV over
video. Hence this factor can be named as CONSUMERS PERCEPTION ABOUT
THE PERFORMANCE OF COMMERCIAL CHANNELS.

Factor-2,is a representation of the consumer’s perception about videos and it

also indicates the consumers perception about paying more money for
watching variety of programmes. So this factor can be termed as consumer’s
own PERCEPTION OF ENTERTAINMENT.

Factor-3,mainly reflects the consumers preference pattern about various films

that are shown in various Tv channels and it also some what indicates their own
perceptions about the range or choices of films that they want to watch. So this
factor can be termed as consumer’s views about VARIETY OF FILMS SHOWN
IN TV CHANNELS.

Factor-4, represents consumers choices about going to cinema and also reveals
their thinkings about the satellite and cable channels. So this can be named as
consumer’s views about CINEMA AND SATELLITE DISHES.
Factor-6 and 7,describes how the consumers reveals their choices of watching
TV over videos .So this can be termed as consumer’s choice of TV VS VIDEO.
Cluster Analysis
Now using the same data we shall try to perform a cluster analysis and check the
results to provider an insight about the set top box market in India. Cluster
analysis is a group of multivariate techniques whose primary purpose is to group
objects based on the charactaristics they possess. Ranging form the derivation
of the taxonomies in biology for grouping all living organisms , to psychological
classifications based on personality and other personal traits, to segmentation
analyses of markets, cluster analysis has always had a strong tradition of
grouping individuals. Now using the three factors that we have generated with
the factor analyses we can classify the respondents according to their viewing
preferences. which is a better method than using ownership or subscriber
information. One way to classify the respondents is to use cluster analysis to see
how the respondents cluster into groups according to their responses to these
three factors. The results of a four-cluster solution tabulated by the factors is
shown in figure 21. The four cluster solution is chosen among the possibilities
because it clearly shows that there are four groups in the sample: Cluster 1 has
highest mean score for the video factor, Cluster 2 has the highest mean score for
the films/theatre factor, Cluster 3 has highest mean for DTH and Cable factor,
and Cluster 4 has all positive mean for all factors . It can then be interpreted that
Cluster 1 are people who enjoy completely video kinds of entertainment , Cluster
2 are flims/theatre fans, Cluster 3 are DTH and Cable fans, and Cluster 4 are
people who enjoy all types of entertainment.

Four respondent clusters by viewer factors

Cluster DTH and cable Video Films/ Theatre

1 -.37314 .16609 -.68988

2 .10955 -1.15380 .45372

3 2.71745 -2.29718 -3.29140

4 .41151 .81078 .82031

Cluster 1 48.000

2 26.000

3 1.000

4 30.000

Valid 105.000

Missing .000

From figure 22 we can say that 48(45.71%) respondents are belongs to cluster 1;
26 respondents (24.76%) are belongs to cluster 2; cluster 3 consists only 1
respondent (.95%) and cluster 4 consists 30 respondents(28.57%)

To see if there are differences among these four clusters with regard to their
interest in Set Top Box, we can cross-tabulate the cluster variable by Set Top Box
interest as shown in 23. We can see that those who are satisfied with DTH and
CABLE fan are also not interested in SET TOP BOX (100% not interested). This
result shows the danger in using DTH and CABLE ownership as measure of
interest.
Cross-tabulation of cluster groups by interest in the SET TOP BOX service

Set Top Box interest

May be/It Don't know/No

No depends answer

Cluster Number of Case Video Fan 12 33 3

25.0% 68.8% 6.3%

Cinema and Theatre Fan 6 15 5

23.1% 57.7% 19.2%

DTH and Cable Fan 1 0 0

100.0% .0% .0%

All Entertainment Fan 6 21 3

20.0% 70.0% 10.0%

The surprise for management is that those who are interested in cinema and
Theatre are possibly interested in SET TOP BOX(57.7%%) and are undecided
(19.2%). Similarly who are interested in video are possibly interested in the new
service (68.8%) and are undecided (6.3%).Again all entertainment fans are
possibly interested for service(70%) and undecided(10%). If this more in-depth
analysis had not been done, decision-makers at SET TOP BOX might have missed
this undecided possible market. The final conclusion is that all entertainment
fans are the group most interested in SET TOP BOX (70%). SET TOP BOX
management had previously thought that this was a secondary market.

Marketing Decisions For Locating prospects

Even after gaining an understanding of who are the best prospects for SET TOP
BOX, management must also make a number of marketing decision. One
important decision is how to promote SET TOP BOX to potential subscribers.

To decide where to advertise the service, SET TOP BOX management needs to
know what kinds of television programmes prospective customers watch. The
first step is to tabulate the four clusters by the questions about favourite
programmes, as shown in Figure 23. There are actually three questions in the
SET TOP BOX survey about first, second and third preferred television
programmes. The table in figure 24 shows how all three can be treated as a
multiple-response variable so that they can be combined into a single variable .In
the table in 24, we see that all entertainment fans who we have found might be
interested in set top box prefer serials, films and musical program dramas in
that order. Cinema viewers who also might be good prospects for set top box
also prefer serials , films and music. Video fans who might be good prospect for
set top box also prefer sports, quiz show, films and music.
 Favourite television programmes by cluster groups

Cluster Number of Case

All
Cinema and DTH and Cable Entertaintment
Video Fan Theatre Fan Fan Fan

What are your favourite News 8 4 0 5

types of television
programmes? Third 47.1% 23.5% .0% 29.4%

Serials 1 2 0 3

16.7% 33.3% .0% 50.0%

Films 11 7 1 9

39.3% 25.0% 3.6% 32.1%

Music programmes 9 9 0 8

34.6% 34.6% .0% 30.8%

Quiz Shows 8 1 0 3

66.7% 8.3% .0% 25.0%

Sports 10 3 0 2

66.7% 20.0% .0% 13.3%

Limitation Of The Study
1) The first limitation is due to geographical constraints the sample size was
restricted to Kolkata city, where covering larger geographical area would
have given better results.
2) The next limitation was the time availability to conduct the research was
limited. Hence the findings of the research could not be evaluated in a
detailed manner.
3) The third limitation is the sample size. Assize of 105 was considered for the
research which cannot be generalized to a larger population very
effectively.

The responses of the respondents may have been biased to some extent due to
their busy schedule or some other reasons. Secondly majority of the
respondents have the age ranging from22-30 years , hence it can reveal similar
results.

Scope Of Further Research

The limitations discussed above suggest several areas for future research.

Firstly, similar research could be conducted for diverse geographical area. This
could increase credibility and generalization in the findings.

Secondly, further research should be carried on to examine the impact of the

demographics on the perception of the consumers about films and
entertainment.

Thirdly, similar researches should be conducted separately for different product

categories to examine whether the perception of consumer regarding choices of
films, watching TV, and videos have different patterns in other context.
Annexure

Installation of Set top Box by Cable operator

1. How many television sets are there in your home? [Circle code]
No TVs 0

1 TV 1

2 TVs 2

3 TVs 3

4 TVs 4

If no TV, go to Q6. Otherwise, continue.

2. Do you have a video recorder?

Yes 1

No 0

3.(a) Are any of your televisions connected to a DTH Service?

Yes 1

No 0

3(b) DTH Service provided by

(1) Tata Sky (2) Reliance Big (3) Sun (4) Dish (5) Fun (6) Others

4. Are any of your televisions connected to a cable network?

 Yes 1

No 0

5. What are your favourite types of television programs? [Show card

#1]

News 1

Serials 2

Films 3

Music Programmes 4

Quiz Shows 5

Sports 6

First Secon Third

d
6. The next question lists several statements about your views on
various subjects. Please rate each question according to whether
you agree or disagree with the statement using the following scale.
[Show scale]

Strongly Strongly

Disagre Disagre Neutral Agree Agree

e e

1 2 3 4 5

6.0 I enjoy going to the cinema. 1 2 3 4

1 5
6.0 I like a wide range of choice in the video shop. 1 2 3 4
2 5
6.0 My leisure activities are mainly out of the 1 2 3 4
3 home. 5
6.0 I would rather watch TV than go out for a 1 2 3 4
4 video. 5
6.0 The TV is always on in my household. 1 2 3 4
5 5
6.0 The choice of films on TV is limited. 1 2 3 4
6 5
6.0 I do not agree with having to pay TV licenses. 1 2 3 4
7 5
6.0 Satellite and cable offer wider choices of films. 1 2 3 4
8 5
6.0 I am a Tele-addict. 1 2 3 4
9 5
6.1 Satellite dishes are a blot on the environment. 1 2 3 4
0 5
6.1 I often forget to return a rented video film. 1 2 3 4
1 5
6.1 I rarely have time to sit down and watch TV. 1 2 3 4
2 5
6.1 I prefer films over weekly serials. 1 2 3 4
3 5
6.1 Commercial channels offer enough choices. 1 2 3 4
4 5
6.1 I get annoyed if the video I want is out. 1 2 3 4
5 5
6.1 Ads in the middle of programme annoy me. 1 2 3 4
6 5
6.1 I prefer the cinema over watching videos. 1 2 3 4
7 5
6.1 Satellite and cable need more film selections. 1 2 3 4
8 5
6.1 Videos are an excellent form of entertainment. 1 2 3 4
9 5
6.2 I don't mind paying for more TV programmes. 1 2 3 4
0 5
6.2 TV is a last resort in entertainment. 1 2 3 4
1 5
For the next two questions, your viewing should include all viewing
of television programmes and personal video recordings of
television programmes. You should exclude viewing of pre-recorded
video tapes.

7. How many days per week do you watch television?

1 day or less 1

2 days 2

3 days 3

4 days 4

5 days 5

6 days 6

7 days 7

8. How many hours per day do you watch television?

Up to 1 hour 1

Up to 2 hours 2

Up to 3 hours 3

Up to 4 hours 4

Up to 5 hours 5

Up to 6 hours 6

Up to 7 hours 7

8 or more hours 8

9. How often do you rent videos for home viewing?

Never 0

Less than once a week 1

Once a week 2
 Twice a week 3

More than twice a week 4

10. Do you buy video films? [If necessary, use these codes]

Yes 1 Don’t know 7

No 0 Refused to answer 8

11. How often do you visit a cinema?

Never 0

Less than once a month 1

Once or twice a month 2

More than twice a month 3

12. There is a new product soon to be available called Set top Box

This revolutionary product allows you to watch a recent film of your

choice by selecting the number on a special remote control
connected via your telephone. Do you think you would be
interested in subscribing to this service?

Maybe/It depends 1

No 0

Don't know/No answer 9

If no or don’t know, go to Q14 (page 4). Otherwise, continue.

13. Please consider the following four features of the Set top Box

service:

Price range

The number of new films each month

The release date of the films

Inclusion of Indian films

There are three price choices: Under Rs. 80 , Rs.120 and Rs. 140 per film..

There are three quantity choices: Up to 5 films per month, from 5 to 10,
and over 10.

There are also three release date choices; The same time as the theatre
release in India , one month following the theatre release, and the same
time as the video release.

And there are two final choices: Including Indian films or not.

Please rank the combinations on the nine cards I'm giving you by
returning them to meet with your first choice on top, your second
choice next, and so forth.

Card 1

Card 2

Card 3

Card 4

Card 5

Card 6
 Card 7

Card 8

Card 9

14. What is the year of your

birth?

15. What is your working status?

Full time 1

Part time 2

Self-employed 3

Home 4

Unemployed 5

Retired 6
16. Sex of respondent:

Female 0

Male 1
.

Appendix
Questionaire

Installation of Set top Box by Cable operator

1. How many television sets are there in your home? [Circle code]
No TVs 0

1 TV 1

2 TVs 2

3 TVs 3

4 TVs 4

If no TV, go to Q6. Otherwise, continue.

2. Do you have a video recorder?

Yes 1
 No 0

3.(a) Are any of your televisions connected to a DTH Service?

Yes 1

No 0

3(b) DTH Service provided by

(1) Tata Sky (2) Reliance Big (3) Sun (4) Dish (5) Fun (6) Others

4. Are any of your televisions connected to a cable network?

Yes 1

No 0

5. What are your favourite types of television programs? [Show card

#1]

News 1

Serials 2

Films 3

Music Programmes 4

Quiz Shows 5

Sports 6

First Secon Third

d
6. The next question lists several statements about your views on
various subjects. Please rate each question according to whether
you agree or disagree with the statement using the following scale.
[Show scale]

Strongly Strongly

Disagre Disagre Neutral Agree Agree

e e

1 2 3 4 5

6.0 I enjoy going to the cinema. 1 2 3 4

1 5
6.0 I like a wide range of choice in the video shop. 1 2 3 4
2 5
6.0 My leisure activities are mainly out of the 1 2 3 4
3 home. 5
6.0 I would rather watch TV than go out for a 1 2 3 4
4 video. 5
6.0 The TV is always on in my household. 1 2 3 4
5 5
6.0 The choice of films on TV is limited. 1 2 3 4
6 5
6.0 I do not agree with having to pay TV licenses. 1 2 3 4
7 5
6.0 Satellite and cable offer wider choices of films. 1 2 3 4
8 5
6.0 I am a Tele-addict. 1 2 3 4
9 5
6.1 Satellite dishes are a blot on the environment. 1 2 3 4
0 5
6.1 I often forget to return a rented video film. 1 2 3 4
1 5
6.1 I rarely have time to sit down and watch TV. 1 2 3 4
2 5
6.1 I prefer films over weekly serials. 1 2 3 4
3 5
6.1 Commercial channels offer enough choices. 1 2 3 4
4 5
6.1 I get annoyed if the video I want is out. 1 2 3 4
5 5
6.1 Ads in the middle of programme annoy me. 1 2 3 4
6 5
6.1 I prefer the cinema over watching videos. 1 2 3 4
7 5
6.1 Satellite and cable need more film selections. 1 2 3 4
8 5
6.1 Videos are an excellent form of entertainment. 1 2 3 4
9 5
6.2 I don't mind paying for more TV programmes. 1 2 3 4
0 5
6.2 TV is a last resort in entertainment. 1 2 3 4
1 5
For the next two questions, your viewing should include all viewing
of television programmes and personal video recordings of
television programmes. You should exclude viewing of pre-recorded
video tapes.

7. How many days per week do you watch television?

1 day or less 1

2 days 2

3 days 3

4 days 4

5 days 5

6 days 6

7 days 7

8. How many hours per day do you watch television?

Up to 1 hour 1

Up to 2 hours 2

Up to 3 hours 3

Up to 4 hours 4

Up to 5 hours 5

Up to 6 hours 6

Up to 7 hours 7

8 or more hours 8

9. How often do you rent videos for home viewing?

Never 0

Less than once a week 1

Once a week 2
 Twice a week 3

More than twice a week 4

10. Do you buy video films? [If necessary, use these codes]

Yes 1 Don’t know 7

No 0 Refused to answer 8

11. How often do you visit a cinema?

Never 0

Less than once a month 1

Once or twice a month 2

More than twice a month 3

12. There is a new product soon to be available called Set top Box

This revolutionary product allows you to watch a recent film of your

choice by selecting the number on a special remote control
connected via your telephone. Do you think you would be
interested in subscribing to this service?

Maybe/It depends 1

No 0

Don't know/No answer 9

If no or don’t know, go to Q14 (page 4). Otherwise, continue.

13. Please consider the following four features of the Set top Box

service:

Price range

The number of new films each month

The release date of the films

Inclusion of Indian films

There are three price choices: Under Rs. 80 , Rs.120 and Rs. 140 per film..

There are three quantity choices: Up to 5 films per month, from 5 to 10,
and over 10.

There are also three release date choices; The same time as the theatre
release in India , one month following the theatre release, and the same
time as the video release.

And there are two final choices: Including Indian films or not.

Please rank the combinations on the nine cards I'm giving you by
returning them to meet with your first choice on top, your second
choice next, and so forth.

Card 1

Card 2

Card 3

Card 4

Card 5

Card 6
 Card 7

Card 8

Card 9

14. What is the year of your

birth?

15. What is your working status?

Full time 1

Part time 2

Self-employed 3

Home 4

Unemployed 5

Retired 6
16. Sex of respondent:

Female 0

Male 1