PRODUCT POSITIONING: A COMPARISON OF PERCEPTUAL MAPPING TECHNIQUES

Chiranjeev S. Kohli & Lance Leuthesser

Chiranjeev S. Kohli and Lance Lancaster are Associate Professors of Marketing at California State University, Fullerton, California. Chiranjeev S. Kohli would like to thank Dr. Franklin Acito for his valuable suggestions on an earlier draft of the article.

COMPARISON OF ALTERNATIVE PERCEPTUAL MAPPING TECHNIQUES Abstract Product positioning is a crucial component of competitive marketing strategy. Perceptual mapping techniques are frequently used to aid managers in making product positioning decisions. This paper presents an overview of perceptual mapping, explains the conceptual foundation, and compares three widely used techniques -- factor analysis, discriminant analysis, and multidimensional scaling. Differences in these analytical techniques are highlighted, with implications for marketing managers.

the determining aspects of a product are latent. and ultimately better decisions. we highlight the relative strengths and limitations of each of these approaches to perceptual mapping and suggest guidelines for their use which should assist managers facing product positioning decisions. Although marketing managers typically engage research professionals to perform product positioning studies." Perceptual mapping refers generally to techniques used to graphically represent this product space. Keeping with our objective of explaining the concepts. we discuss the techniques in their basic form. we identify contexts in which each is most appropriate. The other objective is to help identify product attributes which are determinant in influencing customer choice for the product class. and (3) multidimensional scaling.INTRODUCTION A key element of competitive marketing strategy is product positioning. Accordingly. marketers have two broad objectives in mind when undertaking perceptual mapping. In the second part of the paper. Product positioning has been defined as the act of designing the image of the firm's offering so that target customers understand and appreciate what the product stands for in relation to its competitors. an understanding of the basics of product positioning techniques will enable these managers to make better evaluations of proposed research undertakings. Often. in the first section of the paper we review three frequently used perceptual mapping techniques: (1) factor analysis. One objective is to determine where a target brand is positioned versus the competition. REVIEW OF PERCEPTUAL MAPPING TECHNIQUES In general. if brands are not perceived to differ on that attribute. unobservable 1 . Focusing on the differences in these techniques. No matter how important a product attribute is. Each brand within a set of competitive offerings is thought of as occupying a certain position in a customer's "perceptual space. Determinant attributes are those which are important to customers and also exhibit differences across brands. (2) discriminant analysis. then the attribute will not be influential in customers' choice decisions.

we might hypothesize that these two measures both tap the concept "intrinsic value. rule out the possibility that the correlation 2 . Table 1 shows hypothetical rating data for the automobile example. at least. likert-like scales containing from five to nine rating points are employed for such measures). An examination of the correlation matrix reveals that the attributes "reliability" and "resale value" are highly correlated.constructs which subsume a number of manifest."† We cannot. the first pair of attributes shows very low correlation with the second pair." Likewise "exterior design" and "aerodynamic body" might be indicators of. the brands' ratings on these factors are used to position the brands in perceptual space. Consider m brands of automobiles. three brands (m = 3) are rated on four attributes (p = 4). Thus we may conclude that there are really two underlying dimensions represented in our respondents' ratings of these automobiles. Perceptual mapping techniques can be very useful in uncovering these latent dimensions. observable attributes. The resulting input data form a matrix containing mn rows and p columns. After the factors have been identified. Generation of the Perceptual Map. which we wish to map. In this example. Similarly. however. On statistical grounds. as the number of observed attribute measures might suggest. For this example. say. Each of the m brands is rated on p attributes by n respondents. For example. Factor Analysis The Concept. Input Data. An example will clarify the type of data which is used as input to factor analysis. However. "styling. Factor analysis is essentially a data reduction technique in which the objective is to represent the original pool of attributes in terms of a smaller number of underlying dimensions or factors. "exterior design" and "aerodynamic body" are highly correlated. the data suggest that "reliability" and "resale value" might be two indicators of some underlying concept. the correlation matrix appears in Table 2. Three individuals (n = 3) each rates all brands on the four attributes (typically. not four. The next step is generation of a correlation matrix for the p attributes.

discriminant analysis will identify those underlying dimensions which are most useful in discriminating among groups.J3. an objective of this method is to reduce the number of attributes to a smaller number of underlying dimensions. unlike factor analysis. Input data requirements for discriminant analysis are similar to those for factor analysis. the set of ratings for each brand constitutes a group. However..." Discriminant Analysis The Concept. D3. Generation of the Perceptual Map. discriminant analysis identifies the first dimension of "intrinsic 3 . S3. S1. D1. the brands are then evaluated on these factors by computing an overall "factor score. again. to Figure 1. (Refer to Figure 1 for the automobile example. In discriminant analysis. John's positioning of Brand 1 (point J1) appears in the lower left portion of Figure 1 as J1(3. For example. which may be averaged over n individuals for the brand's overall position on the map.) The overall brand position is shown by the respective number of the brand and the mark " . these latter dimensions will not be "significant" in discriminant analysis. Using the same data employed for factor analysis (see Tables 1 and 2). Refer. Discriminant analysis also requires that respondents provide attribute ratings. unobserved (and unmeasured)." In product positioning studies." The factor score is simply the average of all the attribute evaluations contributing to that factor.between these measures is due to another.5). discriminant analysis focuses on attributes which show differences between brands. sets of observations represent different "groups. variable. Having identified the factors. Like factor analysis. As its name suggests. Input Data. 1.‡ Brands are then positioned by factor scores. This approach will tend to ignore attribute ratings which show a large variation within brands. Thus any conclusions about the existence of meaningful factors must ultimately be supported by theoretical considerations. (Disregard the ellipses at this point.) The positioning of the brands for each individual is shown in Figure 1 as J1.

In this case. 4 . knowing a value for styling conveys little information about a particular brand's identity. therefore. The ellipses in the figure indicate the variation in the ratings of each brand by different respondents. Note the relatively short axes of the ellipses along the X axis (intrinsic value) and the relatively long axes in the Y direction (brands 1 and 2 in particular). an intrinsic value of 4 uniquely identifies brand 2. for example. It is clear from Figure 1 that respondents show substantially greater overall agreement when rating the two attributes representing "intrinsic value" than when rating the two attributes representing "styling. discriminant analysis will identify only the "intrinsic value" dimension as significant. could pertain to any of the three brands." Stated another way. the intrinsic value dimension conveys complete information as to brand.value" (represented by the X axis in Figure 1) as the first discriminating dimension. On the other hand. A styling rating of 4.

0 9.0 256.7 5.0 504.0 6.7 3.0 2.0 6.0 4.7 Resale Value 3.0 7.0 2.0 4.0 4.0 Factor Variance 7.0 5 .0 4.0 3.0 4.0 5.0 379.0 6.0 4.5 4.5 4.0 2.0 3.8 248.0 6.0 3.0 9.3 4.0 4.0 2.0 4.0 5.0 5.0 6.0 5.0 2.0 4.0 3.7 6.0 3.0 4.0 3.0 5.0 3.3 Factor 2 Exterior Aerodynamic Design Body 1.0 4.0 5.7 2.3 173.0 4.0 9.3 2.0 6.0 3.0 9.0 3.Table 1 RATINGS OF THREE BRANDS OF AUTOMOBILES ON FOUR ATTRIBUTES BY THREE RESPONDENTS Attributes Factor 1 Reliability Respondents Brand 1 John Doug Scott Attribute Average Factor Average Brand 2 John Doug Scott Attribute Average Factor Average Brand 3 John Doug Scott Attribute Average Factor Average Attribute Variance 206.

00 0.32 1.93 0.00 Resale Value Exterior Design Aerodynamic Body 6 .Table 2 CORRELATION MATRIX OF THE ATTRIBUTES Reliability Reliability Resale Value Exterior Design Aerodynamic Body 1.00 0.02 0.00 0.97 1.16 0.20 1.

at most.Multidimensional Scaling (MDS) The Concept. MDS asks respondents to rate brands on overall similarity. When the map has been generated. the more similar the brands). Unlike those methods. we take a hypothetical "similarity matrix" shown in Table 3. the relative positioning of the brands. brands "B" and "C" are most similar. Table 3 SIMILARITY MATRIX A A B C D X 3 2 1 X 1 5 X 6 X B C D Entries in the matrix show the rank-order of similarity of the two brands in a pair. Respondents may either rate (metric scaling) or rank-order (non-metric scaling) the similarity for each pairing of brands. Thus. Generation of the Perceptual Map. Note that the matrix has rank-ordering of similarities (non-metric scaling). allow the analyst to infer the underlying dimensions of the map. judging the overall similarity between the paired brands. not individual attributes. Respondents evaluate brands in pairs. m-2 7 . and C. such that the relative positions in the mapped space reflect the degree of perceived similarity between the objects (the closer in space. together with knowledge of the general characteristics of the brands. Non-metric scaling requires. consider three brands only: A. This is a major distinction from both factor and discriminant analysis. B. Input Data. and brands "C" and "D" are least similar. For illustration sake. MDS enables us to map objects (brands) spatially. First.

three additional conditions need to be satisfied (these conditions arise from the data appearing in the bottom row of Table 3). the distance between A and D) should be greater than AB. Its similarity rankings when paired with the other brands are also shown in Table 3. and BC. Placing D at the position shown in the map satisfies this condition. the new condition dictates that AD should be made greater than AB. B. This is illustrated in Figure 3. D should lie somewhere outside a circle centered at A." or lack of fit. First. Thus. with positions for the four brands depicted as A. where m is the number of brands. with a radius AB. the condition that CD be the largest of all inter-brand distances creates a problem if we wish to maintain a one-dimensional map. until an acceptable level of fit is obtained. AC. Finally. Thus. and this is already satisfied with the existing positions. C'. in our example we can represent the three brands on a one dimensional map with perfect fit. Since AC and BC are already less than AB. If we now try to reconstruct the map for the four brands. With a bit of trial and error it will soon become apparent that mapping the four brands cannot be accommodated with a one-dimensional solution. The next condition is that BD must be greater than all the above distances. AD (i. a possible outcome in two dimensions is shown in Figure 3.. however.dimensions to map the brands. assume we introduce a fourth brand. Now. and D'. referring to Figure 3. where m = 4) solution allows perfect fit. 8 . In this case the two-dimensional (m-2. However. without disturbing the earlier set up. Similar to the simple trial and error process suggested here.e. algorithms used for MDS generally entail an iterative estimating routine wherein each step seeks to reduce the "stress. and preserves our one-dimensional solution. D.

2 for non-metric scaling). As a rule of thumb. a large number of stimuli significantly increases the complexity of 9 . Too few stimuli may lead to unstable solutions or the obscuring of subtle dimensions which may differentiate the brands. it is desirable to have as many stimuli (brands) as possible because the number of stimuli puts a limit on the number of dimensions which can be extracted (m . thirteen for three dimensions.4 2. at least nine stimuli are desirable for a two-dimensional solution.COMPARISON OF THE PERCEPTUAL MAPPING TECHNIQUES MDS versus Factor and Discriminant Analysis The following issues are important when comparing MDS with factor analysis and discriminant analysis: 1.1 for metric scaling and m . and seventeen for four dimensions. Despite its desirability. Under MDS.

For example.2 5. Because MDS requires only similarity judgments for brand pairings. In contrast. MDS has been shown to be robust to embedding an existing stimuli set with new stimuli. For m stimuli. Thus. MDS has been found to be robust to either modification.5 6. 4. MDS performs very well in mapping geographic locations based on proximity judgments. One way to alleviate this problem is to increase the number of respondents q times. Do consumers normally make overall similarity judgments for the stimuli of concern? If not. At most they allow a complete reversal. or where only a subset of such attributes are thought to be available. MDS should not be used if there is a large variation in the way consumers perceive products in the category. where comparing distances is perceived as a very "natural" task. thereby requiring each respondent to perform only one qth of the total number of judgments required. it is unlikely that they can give meaningful responses to such questions in a research setting. Cm2 similarity judgments are required. as long as the new stimuli are not drastically different in nature. Three related theoretical issues are of concern when using MDS: a.6 3. Programs used for MDS. This reduction may be accomplished through either random or systematic selection of one qth of all possible pairs. This may result in judgment errors due to increase in fatigue or non-cooperation on the part of respondents. MDS is recommended over factor and discriminant analysis. which implies C92 = 36 paired comparisons if the Kruskal-Wish criteria are followed. do not allow changes in rank order among subjects. No such constraints are imposed for the other two techniques. lower validity should be expected in a 10 .respondents' tasks. it is not necessary a priori to specify all product attributes which are relevant to consumers' choice decisions. Thus in cases where it is not clear that the relevant attributes can be specified. such as INDSCAL.

respondents who are knowledgeable about the product category are usually able to make attribute level comparisons.8 b. others may find the Corvette to be nearer to the Ford Mustang based on specific attributes such as engine size. gas consumption. horsepower. The validity of MDS is diminished in cases where there is large variation in the way respondents make similarity judgments. suggesting task-dependent instability. However. whereas respondents with low knowledge tend to make holistic judgments.relatively complex marketing application such as automobiles. For example. The extent of this problem may be assessed by repeating the task at different points in time. that is. the respondent's ability to make similarity judgments during the task may be limited to using two or three dimensions only. and domestic origin. While some individuals consciously weigh stimuli on different attributes to come up with overall similarity judgments. If the actual representation is much more complex. and "premium" and "quality" on another occasion. while some individuals may perceive the Mazda Miata to be similar to the Chevrolet Corvette. Thus.8 For example. others may use Gestalt impressions about the stimuli to make that judgment. mapping of health care services may reveal that a respondent based comparisons on "deductible" and "choice of physician" on one occasion. c. MDS will generate unstable dimensions that are highly dependent on the task. both being in the overall category of "sports" cars. It is assumed that a perceptual map generated using MDS reflects a respondent's actual internal cognitive space. Variation in the perception of similarity should be assessed after the task 11 . Similarity judgments may be performed differently by different individuals. where there is a large number of concrete dimensions. it is possible that a relatively simple two or three dimensional representation may be the result of short term memory constraints.

it is advisable to base the choice of scale on factors such as the information load of respondents. Comparison of Factor Analysis with Discriminant Analysis The following points are worth noting: 1. when the number of stimuli becomes large. In this case. Recall that discriminant analysis defines dimensions which show maximum differences between groups. and only a subset of determinant attributes have been identified. The "ease of interpretation" criterion has been advocated over statistical significance for retaining dimensions produced by MDS. it is preferred in situations where consumers naturally make overall similarity judgments for the product class. depending on the objective at hand.2 This may or may not be desirable. refer to the two-dimensional map shown in Figure 4. because factor analysis will include those dimensions that account for a significant amount of the total variation even when such dimensions do not show variation across groups.7 In summary. and the stimuli are not very complex. or the ease with which the task may be completed.by asking respondents to report the way in which they made similarity judgments. the problem may be alleviated by having the respondents rate (metric) the similarity judgments.1 Accordingly. 8. Discriminant analysis will identify the dimension defined by 12 . tending to ignore those dimensions of brands which show large variation across all consumers. Thus as discussed earlier in this section. 7. For this reason. MDS is likely to be preferred when a large number of stimuli are available. It is also preferred when a large variation in respondents' similarity perceptions is not expected. ranking (non-metric) the similarity judgments becomes difficult. discriminant analysis is likely to generate fewer dimensions than factor analysis. MDS is fairly robust to the metric used. both metric and non-metric scaling techniques yield similar dimensions. which depicts three brands. and extract underlying dimensions as a part of their internal cognitive process. Finally. To clarify this point.

and so on).line aa as its first discriminating dimension. this is because X explains less of the variation between groups. respondents are more likely to agree on objective dimensions (length. This 13 . factor analysis will identify the dimension bb. weight. like/dislike. As the diagram indicates. and factor analysis gives more weight to the X dimension. In contrast.3 This is an important point to keep in mind when designing positioning studies that include both types of measures. and so on) than on evaluative dimensions (good/bad. Typically. The ellipses indicate the variation in the evaluation of the two brands on the two dimensions mapped. Again. color. discriminant analysis generally places less emphasis on evaluative dimensions than does factor analysis. discriminant analysis gives more weight to the Y dimension. This distinction is very important. Accordingly.

factor analysis and discriminant analysis can be used together to highlight attributes which differ significantly in the degree to which consumers perceptions vary. Figure 5 suggests that though the reliability rating of B is superior to that for A. by itself.leads us to the next issue. then. is useful to the manager responsible for Brand B. In sum. If factor analysis gives more emphasis to a dimension than discriminant analysis. 2. there is a large variation in the way it is perceived. Factor analysis and discriminant analysis should not be viewed as conflicting techniques. suggesting that he/she may wish to explore possible reasons for lack of image clarity or focus concerning this attribute. As Figure 5 further illustrates. 3. This information. The maximum possible number of dimensions in factor analysis is the number of attributes 14 . even though the mean score on Brand B remains unchanged. narrowing the frequency distribution for Brand B to curve B' will strengthen the perceived difference between Brands A and B. it is likely that the response frequency distribution for that attribute is as shown in Figure 5.

(2) factor analysis and discriminant analysis may be used as complementary techniques to highlight those dimensions which differ substantially in the level of perceptual agreement among consumers. and (3) MDS. Conditions favoring the use of factor and discriminant analysis are generally opposite to those favoring MDS. it is important that m and p be sufficiently large. Thus. are of interest. as opposed to evaluative dimensions. In summary. and both are useful in condensing a large number of product attribute measures into a smaller set of meaningful underlying dimensions.1.on which ratings have been obtained. whereas under the latter two methods interval scaled ratings must be provided for each product attribute. MDS is particularly useful in instances where consumers naturally tend to make overall similarity judgments. and (3) factor analysis is generally preferred when attribute ratings are available on very few brands. under the first method. (1) discriminant analysis should be generally preferred over factor analysis when objective dimensions. Factor analysis and discriminant analysis are both data reduction techniques. A key difference between factor analysis and discriminant analysis is that the former method identifies product dimensions which account for overall variation in consumers' responses. CONCLUSION This article has presented a brief overview of three methods of analysis frequently used in product positioning research: (1) factor analysis. consumers make overall similarity judgments of brands. where p is the number of brands and m is the number of attributes on which these brands are evaluated.1 and m . In circumstances with a limited number of brands and/or attributes factor analysis is preferred. the maximum possible number of dimensions is given by the lesser of p . (2) discriminant analysis. Accordingly. In discriminant analysis. MDS differs from both factor and discriminant analysis in that. or in circumstances where attribute data are sparse. As previously mentioned. whereas the latter identifies only those dimensions that account for significant variation 15 . too few brands leads to the possibility that important discriminating dimensions may be overlooked.

The differences in these two methods make it useful to view them as complementary techniques. 16 .between brands. an implication of the above difference is that factor analysis tends to place greater emphasis on evaluative dimensions than does discriminant analysis. Because the overall variance in consumers' responses for evaluative dimensions is generally greater than for objective dimensions.

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e." See Table 1 for approximate estimates of variance explained by each factor. the first dimension identified will be the one described by "styling.Footnotes † The first dimension identified by factor analysis is the one that shows maximum variance. Factors may be rotated for ease of interpretation. The second dimension has the next highest variance subject to the constraint that it is orthogonal to the first one.. In the example (using rough estimates). ‡ The precise method is to evaluate each respondent's brand attribute on the first and second factor (i. the extracted orthogonal linear equations containing p elements). which may then be averaged over n individuals for the brand's overall position on the perceptual map." which is likely to explain greater variance than the one defined by "intrinsic value. 18 . Actual variance explained by different factors is proportional to the eigenvalue of the respective factors.

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