Perceptual Mapping

Workshop on “Mapping Procedures” to ascertain positions

Raj Echambadi

An Electrical Engineer reads diagrams such as the one here

An organic chemist reads diagrams such as the one here

Why Mapping?

Marketing strategy people read perceptual maps.

What is a perceptual map? A perceptual map is a visual representation of how target

customers view the competing alternatives in a Euclidean space which represents the market

The map has the following characteristics: The axes of the map are a special set of vectors

suggesting the underlying dimensions that best characterize how customers differentiate between alternatives

The pair-wise distances between product alternatives directly indicate how close or far apart the products are in the minds of customers

A vector on the map indicates both magnitude and direction in the Euclidean space. Vectors are usually used to geometrically denote attributes of the perceptual maps

Perceptual Map of only Attributes

Perceptual Map of only Products

Both Products and Attributes

Important Decisions Before Positioning Exercises

What brands should be positioned? What categories are involved (substitutable)? What are the appropriate attributes to

measure?

Profile analysis a.k.a. Snake Plots

Fast service

Friendly

Honest

Convenient location

Convenient hours

Broad service

High saving rates

Bank A

Bank B

Levels of Competition

Diet lemon limes

Baseball cards

Fruit flavored colas

Coffee

DietCoke

DietPepsi

Diet-Rite cola

Bottled water

Lemon limes

Regularcolas

Beer

Juices

Wine

Fast food

Tea

Video rentals

Icecream

Direct competition: Diet colas

Indirect competition: Soft drinks

Generic competition: Beverages

Budget competition: Food and entertainment

Methods for Determining Competitors

Existing categories: SIC NAICSwww.census.gov/epcd/www/naics.html

Managerial judgmentCustomer-purchase-based

measures

Managerial Judgment of Competition

Markets Same DifferentProduct/Services

Same

Different

A

C

B

D

Customer-purchase-based measures

Brand Switching Data The Extent of Substitutability among Brands

Cross-Elasticity of Demand: Change in Brand B’s Sales/ Change in Brand A’s Price

Mainly Used for Nondurable Products

Brand-Switching MatrixTime t+1

A B C D E

A .6 .2 .2 0 0

B .2 .3 .4 .1 0

C .2 .3 .5 0 0

D 0 .1 .1 .5 .3

E .1 0 0 .4 .5

Time t

Developing A Perceptual Map

Two Alternative ways Attribute Rating method (AR) Overall Similarity method (OS)

Perceptual Mapping Means graphic description of customers’

perception about different brands/products. You can use it to gain

Customer perceptions for a new product concept.

Better understanding of market structure. Direction for R&D efforts to satisfy

customers better.

Attribute Rating Method

Data Cube (brands*attributes*respondents)

Statistical Analysis (Factor Analysis)Find out two (or three) axes for the

perceptual mapB2B products ok.

Overall Similarity method (OS)

Suitable for consumer products and services Ask consumers’ perception the extent of

similarity of pairs of items. Similarity Data Analysis (Multidimensional

Scaling) You name the axes and infer the attributes

Example: Pain Reliever Market

Effectiveness: perceptions on the ability to make headache pain go away fast

Gentleness: perceptions that the product would not upset one’s stomach or cause heartburn

Is there a positioning opportunity along gentleness and effectiveness?

Which opportunity is better?

Determine the Ideal Vector of your Segment

Ideal vector is a fancy term for finding the importance weights (placed by consumers) of the dimensions.

Benefit Segmentation - Positioning by Segments

Gentleness

Effectiveness

Cluster 1: Age =>60, Income = < 30K

Cluster 2: Age = <40; Income = > $60K

Segment-wise Positionings

Gentleness

Effectiveness

Tylenol

Bufferin

Excedrin

BayerPrivate Label Aspirin Anacin

Ideal for segment 1.

Ideal for segment 2.

Two different products / positionings

List of Attributes For Soft Drink Data (1 = strongly disagree to 7 = strongly agree) 1. Brand X has a refreshing taste. 2. I prefer Brand X because it has fewer calories than other drinks. 3. Brand X quenches my thirst immediately. 4. I like the sweet taste of Brand X. 5. I prefer drinking Brand X after workouts and sports because it gives

me energy. 6. I prefer Brand X because it comes in environment friendly packaging. 7. Brand X has minerals and vitamins that help quench my deep down

body thirst. 8. Brand X has a unique flavor of its own. 9. Brand X has the right mix of minerals and vitamins that are healthy

for my body. 10. I prefer to drink Brand X when I am really thirsty.

Example 1

Rotated Factor Matrixa

.930

.925

.924 .937 .936 .858 .915 .863 .855

X2X5X9X6X4X8X1X7X3X10

1 2 3Factor

Extraction Method: Principal Axis Factoring. Rotation Method: Varimax with Kaiser Normalization.

Rotation converged in 5 iterations.a.

Perceptual Map of Soft Drinks

FAC1

1.0.50.0-.5-1.0-1.5

FAC

21.0

.5

0.0

-.5

-1.0

-1.5

Pepsi

Nestea

Lipton

Gatorade

Coke

Allsport

Perceptual Maps of Deodorants

Ganesh and Oakenfull (1997) Example 2

U.S. Sample

Mexican Sample

LEVELS OF COMPETITION

Grand Bahama

IslandNassau/Paradise

Island

Outer Islands

TheBahamas

Bermuda BritishVirgin

Islands

Jamaica

Aruba

Barbados

Cayman Islands

USVirgin

Islands

Caribbean

Florida

Hawaii

Mexico

TropicalVacation

SkiVacation

EuropeanVacation

ThemePark

Vacation

Vacation

HomeRepair

Big Screen

TV

Car

W/In Budget Competition

Generic Competition

Higher-Order Competition

CategoryCompetition

Sub-CategoryCompetition

DIMENSIONS OF IDEAL DESTINATION ATTRIBUTES

BEACHES SAFE / FRIENDLY

VALUE FOR MONEY LUXURY CULTURE/

HISTORICPRISTINE /

SLOW ACTION ACTIVITIES

Lots of water related activities+ 0.54Stunning, beautiful beaches 0.37Easy and carefree atmosphere 0.61Friendly, welcoming people 0.53Safe at all hours 0.42Good value for money 0.74Reasonably priced resorts 0.66Budget hotels 0.43Luxury hotels 0.81Top five star resorts 0.75Variety of quality restaurants 0.47High-quality retail shopping 0.38Spas 0.34Direct air service from my city 0.30Warm weather four seasons a year 0.25Historic and cultural attractions 0.68Authentic, historic small towns 0.65Museums 0.59Festivals / Music Performances 0.43Eco-friendly 0.37Island style architecture 0.37Awe-inspiring scenery 0.36Colorful 0.30 Pristine, remote island 0.63Slow pace of life 0.57Not too many people 0.51Authentic genuine place with very little commercialization 0.49Lots of action 0.74Exciting and diverse nightlife 0.64Bustling with visitors 0.53Quality casinos 0.48A cruise destination 0.46Kayaking 0.57Fishing 0.50Great Golf courses 0.49

FACTOR ANALYSIS - DIMENSIONS OF IDEAL DESTINATION

MUSTHAVEFOR ALL

GOODTO HAVEFORMOST

APPEALSTOSOME

Factors arranged in order of importance based on mean ideal ratings.

JAMAICAPrimary and Secondary Associations

Warm weather four seasons a

year (40%)

Festivals / Music Performance (30%)

Colorful (37%)

Stunning, beautiful beaches

(29%)

Awe-inspiring scenery (27%)

Direct air service from my

city (27%)

Easy and carefree

atmosphere (32%)

Lots of water related

activates (25%)

Primary Association

Secondary Association

Tertiary Association

JAMAICA

NASSAU / PARADISE ISLANDPrimary and Secondary Associations

Lots of water related activities

(34%)

Luxury hotels (42%)

High-quality retail shopping

(29%)

Bustling with visitors (28%)

Lots of action (27%)

Stunning, beautiful

beaches (28%)

Primary Association

Secondary Association

Tertiary Association

NASSAU / PARADISE ISLAND

Spas (27%)

Quality casinos (38%)

A cruise destination

(37%)

Exciting and diverse nightlife

(26%)

Top five start resorts (36%)

OUT ISLAND OF THE BAHAMASPrimary and Secondary Associations

Slow pace of life (27%)

Authentic genuine place with very little commercialization

(30%)

Pristine, remote island (39%)

Primary Association

Secondary Association

Tertiary Association

OUT ISLAND OF THE BAHAMAS

Not too many people (36%)

KEY WESTPrimary and Secondary Associations

Exciting and diverse nightlife

(39%)

Fishing (39%)

Easy and carefree

atmosphere (35%)

Lots of water related

activities (29%)

Authentic, historic small towns (25%)

Primary Association

Secondary Association

Tertiary Association

KEY WESTLots of action (30%)

Bustling with visitors (37%)

Variety of quality restaurants (38%)

Warm weather four seasons a

year (26%)

Historic Cultural

attractions (32%)

Festivals / Music

Performances (28%)

Colorful (31%)