Workshop on “Mapping

Procedures” to ascertain
positions

Raj Echambadi
Why Mapping?

An organic chemist
reads diagrams such
as the one here

An Electrical Engineer
reads diagrams such as the
one here

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

Bank A
Bank B

Fast service

Friendly

Honest

Convenient location

Convenient hours

Broad service

High saving rates

Levels of Competition
Beer

Ice
cream Tea Regular
colas Diet
lemon
limes
Diet-Rite
Wine cola
Diet Direct
Pepsi competition:
Diet Diet colas
Fast food Coke Juices

Fruit
flavore Indirect
Bottled d colas Lemon competition: Video
water limes Soft drinks rentals

Generic
Coffee competition:
Baseball
cards Beverages
Budget
competition:
Food and
entertainment
Methods for Determining Competitors

 Existing categories: SIC  NAICS

www.census.gov/epcd/www/naics.html
 Managerial judgment
 Customer-purchase-based
measures
Managerial Judgment of
Competition
Product/Services
Markets Same Different

Same A B

Different
C 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 Matrix
Time t+1
A B C D E

A .6 .2 .2 0 0

Time t B .2 .3 .4 .1 0

C .2 .3 .5 0 0

D 0 .1 .1 .5 .3

E .1 0 0 .4 .5
 Developing A Perceptual Map

 Two Alternative ways

 AttributeRating 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 map
 B2B 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
Cluster 1: Age =>60, Income = < 30K

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

Effectiveness
 Segment-wise Positionings

Gentleness Ideal for segment 1.

Tylenol Two different products /
positionings
Ideal for segment 2.
Effectiveness
Bufferin
Bayer
Private Label
Aspirin Excedrin
Anacin
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

Factor
1 2 3
X2 .930
X5 .925
X9 .924
X6
X4 .937
X8 .936
X1 .858
X7 .915
X3 .863
X10 .855
Extraction Method: Principal Axis Factoring.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 5 iterations.
Perceptual Map of Soft Drinks
1.0
Nestea

Lipton

.5

Coke

0.0 Pepsi

-.5

Gatorade
-1.0 Allsport
FAC2

-1.5
-1.5 -1.0 -.5 0.0 .5 1.0

FAC1
Perceptual Maps of Deodorants

Ganesh and Oakenfull (1997) Example 2

U.S. Sample
Mexican Sample
LEVELS OF COMPETITION
W/In Budget
Vacation Competition

Generic
Tropical
Competition
Vacation

Caribbean Higher-Order
Competition
Ski British
Bermuda
Vacation Virgin
Islands The
Bahamas Category
Barbados Competition
Outer Grand
Islands Bahama
Big
Screen Cayman Island
TV Nassau/
Islands Sub-Category
Hawaii Paradise
Island Competition
Aruba
US
Jamaica
Virgin Florida
Islands

Theme Mexico
Park
Car
Vacation
European
Vacation

Home
Repair
 DIMENSIONS OF IDEAL
DESTINATION ATTRIBUTESFACTOR ANALYSIS - DIMENSIONS OF IDEAL DESTINATION
SAFE / VALUE FOR CULTURE/ PRISTINE /
BEACHES LUXURY ACTION ACTIVITIES
FRIENDLY MONEY HISTORIC SLOW

Lots of water related activities+ 0.54

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

Lots of water
related
activates (25%)
Secondary Association

Easy and
Primary Association carefree
Awe-inspiring atmosphere
scenery (27%) Warm weather (32%)
four seasons a Colorful (37%)
year (40%)

JAMAICA Stunning,
beautiful beaches Festivals / Music
(29%) Performance (30%)

Direct air
service from my
city (27%)
NASSAU / PARADISE ISLAND
Primary and Secondary Associations Tertiary Association

Exciting and
Secondary Association diverse nightlife
(26%)

Primary Association Lots of action

Bustling with (27%)
Lots of water
visitors (28%) A cruise related activities
destination (34%) High-quality
(37%) retail shopping
(29%)

NASSAU / PARADISE
ISLAND Top five start Spas
Luxury Stunning,
resorts (36%) (27%)
hotels (42%) beautiful
Quality casinos beaches (28%)
(38%)
OUT ISLAND OF THE BAHAMAS
Primary and Secondary Associations
Tertiary Association

Secondary Association

Primary Association

Slow pace of life

(27%)
Pristine, remote
island (39%)

OUT ISLAND OF THE

BAHAMAS
Not too many Authentic genuine
people (36%) place with very little
commercialization
(30%)
KEY WEST
Primary and Secondary Associations Tertiary Association

Secondary Association

Lots of water
related
activities (29%)

Primary Association Authentic,

historic small
Exciting and towns (25%)
diverse nightlife Easy and
(39%) carefree
Colorful (31%) Variety of quality atmosphere
restaurants (38%) (35%)

KEY WEST
Historic Lots of action (30%) Fishing (39%)
Cultural
attractions Bustling with
(32%) visitors (37%)

Warm weather
four seasons a
Festivals /
year (26%)
Music
Performances
(28%)