Data for this session is available in Data – Perceptual Mapping

Perceptual Mapping

Skander Esseghaier

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In this session, you will learn:

How to construct a map of product locations in the perceptual space of consumers How to do it using Minitab What attributes you should use when constructing a perceptual map
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What is Perceptual Mapping
A technique to understand the position of brands as consumers perceive them The output is a map of product locations in the perceptual space of consumers Though consumers may think about a number of attributes in evaluating products, it may be possible to summarize these attributes because consumer perceptions along these attributes may be correlated We can use factor analysis to find this reduced perceptual space and map the products in this space
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Perceptual Map… Final Output
Perceptual Map for Cars
1.5

VW Golf
Economy

1 0.5

Dodge Neon

Camry
-1.5 -1

Taurus
0 -0.5 -0.5 -1 -1.5 Fashion 0 0.5 1 1.5 2

Lexus ES 300 BMW325
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Perceptual Maps: An Illustration Using the Car Market
Cars Considered
Ford Taurus Toyota Camry Volkswagen Golf BMW 3-Series Lexus ES300 Dodge Neon

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Survey…
Each respondent is asked to rate 6 cars on a number of attributes on a 1-7 scale
Affordability Practicality Classiness Sportiness Youth Appeal Fun to Drive
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Data…
Respondent 1 1 1 1 1 1 2 2 Car
Taurus Neon Camry Lexus BMW VW Taurus Neon

Afford 7

Practical 5

Classy 2

Sporty 5

Youthful 5

Fun 5

20 20 20 20 20 20

Taurus Neon Camry Lexus BMW VW
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Quick and Dirty Sense of the Data: Looking at the Correlation Matrix

Afford Afford Practical Class Sporty Youth App Fun 1 0,013004 -0,61826 -0,34601 -0,0619 -0,17834

Practical

Class

Sporty

Youth App

Fun

1 -0,48435 1 -0,77767 0,798962 1 -0,72219 0,257668 0,636417 -0,73562 0,573691 0,852368

1 0,64312

1

Fair amount of correlations between variables indicates that Factor Analysis may be useful
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Simple Approach: Plot Attribute by Attribute
Practicality Vs Sportiness
1.5

BMW
1

Lexus Neon
0.5 0 -1.5 Sportiness -1 -0.5 -0.5 -1 -1.5 Practicality 0 0.5 1 1.5

Taurus Camry Volkswagen

Can lead to too many maps

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First Step: Do Principal Component Analysis (PCA)

This allows us to select the # of factors PCA uses the correlation matrix of the data and constructs factors
if there are n variables we will have n factors first factor will explain most variance, second next and so on…

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Minitab Output of PCA: Eigen Analysis

Eigenanalysis of the Correlation Matrix
Eigenvalue Proportion Cumulative 3.7336 0.622 0.622 1.3383 0.223 0.845 0.4641 0.077 0.923 0.2558 0.043 0.965 0.1514 0.025 0.991 0.0568 0.009 1.000

84.5% of variance in 6 variables is explained by just 2 factors
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Minitab Output of PCA: Scree Plot
Scree Plot of Afford-Fun
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Eigenvalue

2

1

0 1 2 3 4 5 6

Component Number
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Second Step: Do Factor Analysis
Perform factor analysis with the factors selected from Step 1 Interpret resulting factors
use factor loadings and loading plot to interpret factors if it is not interpretable use rotation options until we get something that can be interpreted

Look at factor equations and factor scores
score plots will be useful
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Unrotated Factor Loadings: Variable’s Correlation with the Factors
Unrotated Factor Loadings and Communalities Variable Afford Practica Class Sporty Youth Ap Fun Variance % Var Factor1 0.376 0.849 -0.774 -0.965 -0.740 -0.890 3.7336 0.622 Factor2 -0.841 0.367 0.529 0.050 -0.434 -0.158 1.3383 0.223 Communality 0.849 0.855 0.879 0.934 0.736 0.818 5.0719 0.845
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Interpreting Factors: Looking at Loading Plot without Rotation
Loading Plot of Afford-Fun
Class
0.5

Practica

Second Factor

Sporty
0.0

Fun

Youth Ap
-0.5

Afford

-1.0

-0.5

0.0

0.5

First Factor

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Rotated Factor Loadings: Variable’s Correlation with the Factors
Rotated Factor Loadings and Communalities Varimax Rotation Variable Afford Practica Class Sporty Youth Ap Fun Variance % Var Factor1 0.063 -0.922 0.435 0.829 0.857 0.860 3.2045 0.534 Factor2 0.919 0.075 -0.831 -0.498 0.036 -0.279 1.8674 0.311 Communality 0.849 0.855 0.879 0.934 0.736 0.818 5.0719 0.845
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Interpreting Factors: Looking at Loading Plot with Rotation
Attribute-Factor Relationship (Loading Plot)
1 0.8 0.6 0.4

Affordability

Practicality
-1 Factor 2 -0.5

0.2 0 0 -0.2 -0.4 -0.6 -0.8 -1 Factor 1

Youth
0.5

Fun

1

Sportiness Classiness

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Naming Factors

Can we name these factors? This highlights the subjectivity involved here

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How Did Cars Score on Fashion and Economy Factors?
Factor Score Coefficients Variable Afford Practica Class Sporty Youth Ap Fun Factor1 0.206 -0.330 -0.003 0.211 0.327 0.266 Factor2 0.602 -0.135 -0.446 -0.154 0.193 -0.008

Fashion = 0.206 Affordability - 0.330 Practicality - 0.003 Classiness + 0.211 Sportiveness + 0.327 Youthful Appeal + 0.266 Fun Economy = 0.602 Affordability -0.135 Practicality -0.446 Classiness - 0.154 Sportiveness + 0.193 Youthful Appeal - 0.008 Fun

We standardize the variables and then take the average of the 20 consumer’s ratings 19 on the standardized variable to plug in

Alternative Approach To Compute Factor Scores for Each Car

Store Minitab’s factor scores for each car based on each consumer’s ratings
we will have 20*6=120 numbers

Average the factor scores across consumers for each car
we will get the factor score for each car

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Where are Cars Located in the Perceptual Space?
Perceptual Map for Cars
1.5

Volkswagen

1 0.5

Neon

Camry
-1.5 Economy -1

Taurus
0 -0.5 -0.5 -1 -1.5 Fashion
21

0

0.5

1

1.5

2

Lexus BMW

Applications of Perceptual Maps
Who are our competitors? On what dimensions do we compete? Where to introduce new products?
you also need to be aware of consumer preferences look for locations with relatively more consumers but limited competition

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Caveats
Identify relevant attributes
don’t miss important attributes (Exploratory Research is important) no point asking about unimportant attributes conjoint analysis may be useful in identifying what attributes are important to consumers

Identify discriminating attributes
don’t use primary attributes (like cleaning power of detergents) there should be real perceptual differences on average for the product
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Step 1: Choose Number of Factors to Extract
Do Principal Component Analysis (PCA) In Minitab select Stat>Multivariate>Principal Components… Select the variables you want to factor analyze in Variables box Select “Correlation” as the data that will be analyzed; this will mean that the data will be standardized and therefore each variable will have equal effect Ask for Scree Plot (using Graphs button) which graphs the amount of variance explained by each factor
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Step 2: Perform Factor Analysis
Do Factor Analysis in Minitab, Stat>Multivariate>Factor Analysis…. number of Factors to extract should be from Step 1 try “None” rotation for a start (else try Varimax or others if it doesn’t work) In Graphs: select loading plot (score plot is not useful here) In Storage: in the scores box store the factor scores by selecting 2 variables
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Step 3: Plot the Perceptual Map
Take the average of the factor scores for each car Use these average scores to plot the perceptual map

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