ABSTRACT
Chapter 8 addresses Exploratory Factor Analysis (EFA), which seeks to identify how observable and latent variables are related. Therefore, it seeks to identify under which latent dimensions directly measurable variables are grouped. For instance, what is the meaning of service quality? Obviously, it will vary in accordance with the customer profile and the sector. Using EFA, it’s possible to identify what dimensions are most valued by, for example, fitness centers’ customers, such as equipment and infrastructure, opening hours, location, or trainers and staff support. The chapter presents the basic concepts of EFA, the criteria to retain variables and to choose the number of factors to be retained. Following that, it includes the steps to test reliability and validity. The technique is illustrated with theoretical description, followed by an example with the SPSS commands and the results tables with comments. The chapter also includes exercises, such as a road map to perform the analysis, an interpretative exercise with results tables, and a market context to guide a research design.
