Free downloadable dataset to be used with this book:
Dataset: Restaurant.csv
Dataset: Photocopier.csv
Dataset: Cafe100.csv
Erratum:
Overview:
Partial least squares is a new approach in structural equation modeling that can pay dividends when theory is scarce, correct model specifications are uncertain, and predictive accuracy is paramount.
Marketers can use PLS to build models that measure latent variables such as socioeconomic status, perceived quality, satisfaction, brand attitude, buying intention, and customer loyalty. When applied correctly, PLS can be a great alternative to existing covariance-based SEM approaches.
Dr. Ken Kwong-Kay Wong, an award-winning marketing professor who has taught applied research for more than fifteen years, wrote this reference guide with graduate students and marketing practitioners in mind. Filled with business examples and downloadable datasets for practice, the guide includes step-by-step guidelines for advanced PLS-SEM procedures in SmartPLS, including: CTA-PLS, FIMIX-PLS, GoF (SRMR, dULS and dG), HCM, HTMT, IPMA, MICOM, PLS-MGA, PLS-POS, PLSc, and QEM.
Filled with useful illustrations to facilitate understanding, you’ll find this guide a go-to tool when conducting marketing research.
Praise for
Mastering Partial Least Squares Structural Equation Modeling (PLS-SEM)
with SmartPLS in 38 Hours
“PLS-SEM is a very robust and advanced technique that is well suited for prediction in multi-equation econometric models. This easy-to-read book helps researchers apply various statistical procedures in SmartPLS quickly in a step-by-step manner. I would highly recommend it to all PLS-SEM user.”
— Prof. Dipak C. Jain
President (European) and Professor of Marketing
CEIBS, Shanghai
“Having supervised to completion twenty-seven doctoral candidates, of which 70% utilized quantitative methodology using PLS, I wish I had Dr. Wong's book earlier. Mastering Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS in 38 Hoursprovides all the essentials in comprehending, assimilating, applying and explicitly presenting sophisticated structured models in the most simplistic manner for a plethora of Business and Non-Business disciplines. Since PLS-SEM quantitative analysis has gained prominence with most top tiered academic journals, this book is a necessity for aspiring academics who wish to have prolific publications in highly ranked publications.”
— Prof. Siva Muthaly
Dean, Faculty of Business & Management
Asia Pacific University of Technology & Innovation, Malaysia
“In a world filled with fake-news, academic research results get ever more important. For that reason, key methodologies like PLS-SEM must become available and understood beyond an elite scholar group. Dr. Wong’s book does just that and is therefore highly recommended.”
— Prof. dr. Jack AA van der Veen
Professor of Supply Chain Management
Nyenrode Business Universiteit, The Netherlands
“We teach PLS-SEM as part of our Marketing Research course at Seneca and Ken was able to turn this difficult subject into an easy one for our students. Researchers at all levels would definitely benefit from this well-organized book to become competent in this multivariate data analysis method.”
—Chris McCracken
Academic Chair, School of Marketing
Seneca College, Canada
“A must-have edition for academics and practitioners alike. Dr. Wong brings a refreshing approach to this important topic supporting a wider application across sectors. The clarity of the content will encourage those new to the field to enhance their skill set with step-by-step support. The comprehensiveness of the edition will allow it to also serve as a valuable reference for even the most advanced researchers.”
—Prof. Margaret D. Osborne
Former Academic Chair, School of Marketing
Seneca College, Canada
“Ken Wong has created an easy-to-use, all-in-one blueprint for academics and practitioners on PLS-SEM.”
—Prof. Seung Hwan (Mark) Lee
Interim Director
Ted Rogers School of Retail Management
Ryerson University, Canada
“Finally, a step-by-step guide to one of the most used method in academia. Life would be much easier for many of us. A must for anyone wanting to know it — well.”
—Prof. Terence Tse
Associate Professor of Finance
ESCP Europe Business School, UK
“The new book of Dr. Ken Wong on PLS-SEM is a good contribution to help researchers in the application of this important tool in marketing research. His lucid writing style and useful illustrations make life simple for students, researchers and practitioners alike. Strongly recommended!”
— Prof. Kanishka Bedi
Professor, School of Business and Quality Management
Hamdan Bin Mohammed Smart University, UAE
“In real world scenarios, researchers as well as practising managers have always struggled with actual data that does not mimic the properties of a statistically normal distribution. Ken’s graphic attempt proposing PLS-SEM as a possible alternate solution to identify complex causal relationships is indeed noteworthy, more so due to the book’s hands on approach in using software with enough downloadable data sets to aid the familiarisation process without overwhelming the reader.”
— Prof. Chinmoy Sahu
Dean, Manipal GlobalNxt University, Malaysia
Table of Contents
A Better Way to Measure Customer Satisfaction
Chapter 2 – Understanding the PLS-SEM Components
Inner (Structural) and Outer (Measurement) Models
Determination of Sample Size in PLS-SEM
Formative vs. Reflective Measurement Scale
Should it be Formative or Reflective?
Guidelines for Correct PLS-SEM Application
Chapter 3 – Using SmartPLS Software for Path Model Estimation
Introduction to the SmartPLS Software Application
Downloading and Installing the Software
Solving Software Installation Problem on Recent Macs
Case Study: Customer Survey in a Restaurant (B2C)
Building the Inner and Outer Models
Running the Path-Modeling Estimation
Chapter 4 – Evaluating PLS-SEM Results in SmartPLS
The Colorful PLS-SEM Estimations Diagram
Initial Assessment Checklist
Model with Reflective Measurement
Model with Formative Measurement
Evaluating PLS-SEM Model with Reflective Measurement
Explanation of Target Endogenous Variable Variance
Inner Model Path Coefficient Sizes and Significance
Outer Model Loadings and Significance
Internal Consistency Reliability
Checking Structural Path Significance in Bootstrapping
Predictive Relevance: The Stone-Geisser’s (Q2) Values
Managerial Implications - Restaurant Example
Chapter 5 – Evaluating Model with Formative Measurement
Different Things to Check and Report
Outer Model Weight and Significance
Model Having Both Reflective and Formative Measurements
Chapter 6 – Determining Measurement Model Using Confirmatory Tetrad Analysis (CTA-PLS)
Formative or Reflective? Determining the Measurement Model Quantitatively
Case Study: Customer Survey in a Café (B2C)
Chapter 7 – Handling Non-Linear Relationship Using Quadratic Effect Modeling (QEM)
Non-linear Relationship Explained
Chapter 8 – Analysing Segments Using Heterogeneity Modeling
Something is Hiding in the Dataset
Establishing Measurement Invariance (MICOM)
A. Modeling Observed Heterogeneous Data
B. Modeling Unobserved Heterogeneous Data
Chapter 9 – Estimating Complex Models Using Higher Order Construct Modeling (HCM)
Case Study: Customer Survey in a Photocopier Manufacturer (B2B)
Conceptual Framework and Research Hypotheses
Questionnaire Design and Data Collection
Multiple-item vs. Single-item Indicators
Formative vs. Reflective Hierarchical Components Model:
Internal Consistency Reliability
Coefficient of Determination (R2)
Chapter 10 – Mediation Analysis
Customer Satisfaction (SATIS) as a Mediator
Chapter 11 – Comparing Groups Using Categorical Moderation Analysis (PLS-MGA)
Multi-group Analysis – “Business Type” in the Photocopier Manufacturer Example
Managerial Implications for the Photocopier Manufacturer
Chapter 12 – New Techniques in PLS-SEM
Estimating Factor Models Using Consistent PLS (PLSc)
Assessing Discriminant Validity Using Heterotrait-Monotrait Ratio of Correlations (HTMT)
Contrasting Total Effects Using Importance-Performance Matrix Analysis (IPMA)
Testing Goodness of Model Fit (GoF) Using SRMR, dULS, and dG
Chapter 13 – Recommended PLS-SEM Resources