Structural Equation Modeling (SEM) from MAi

You’ve All Heard of Driver Analysis—
But You Need to Kick It Up a Notch with Structural Equation Modeling (SEM)

Driver Analysis can be—and very often is—as simple as a quick regression of attribute ratings to purchase intent. Which is fine as far as it goes. But increasingly often these days, you need to go a lot further. MAi helps you do just that with Structural Equation Modeling (SEM).

Marketers are no longer content just to ask simple questions such as, “What is the impact of product performance on purchase interest?” Nowadays, marketers recognize the growing complexity of their consumers and markets, and to succeed they need to understand the multilayered interactions among a whole host of variables, and ultimately how these interactions affect consumers’ attitudes and behaviors.

And that’s where we can help, by bringing our SEM capability to bear on these increasingly tricky issues.

MAi’s approach allows clients to …

• Test the structure of relationships – “How do product attributes interact to drive consumer preferences for a given product/brand, and which attributes ladder up to others to drive these preferences?”
• Identify & understand both direct and indirect effects – “Scent may directly drive purchase interest for hair care products, but does it also drive purchase interest indirectly through its impact on perceptions of product performance?”
• Understand where and how attribute impacts and relationships differ across subgroups in a population – “Are the drivers of overall preference different between men and women, between my different consumer segmentation groups?”
• Understand how certain attributes combine in consumers’ minds to form latent constructs – “what attributes form a consumer’s emotional connection to a brand/product?”
• Produce more accurate simulation results & scenario planning by incorporating the structure of the relationships between attitudes and behavior into the model.