Factor Analysis
The Factor Analysis is one of the types of the Multivariate Analysis. The main goal of the Factor Analysis is to reduce the number of factors that affect a process into a smaller number of factors that are able to explain the major part of the variation that occurs.
Let's say that you posted a questionnaire to 100 customers regarding a new product that you just launched. Among the different answers provided by the 100 customers, you might be able to reduce them to just 2 or 3 main factors that explain the reaction to the product itself. They may be the price, the customer experience and the quality of the product when compared to similar products. These 3 mains factors will probably explain about 90% of the variation between the different answers provided.
Let's say that you posted a questionnaire to 100 customers regarding a new product that you just launched. Among the different answers provided by the 100 customers, you might be able to reduce them to just 2 or 3 main factors that explain the reaction to the product itself. They may be the price, the customer experience and the quality of the product when compared to similar products. These 3 mains factors will probably explain about 90% of the variation between the different answers provided.