Perceptual

Maps
Visual Description
Perceptual Map
 Positioning
Perceptual Map of the Mind space is a very interesting
exercise to understand which brands are close and which far
away in consumers mind

Perceptual maps are ubiquitous in marketing presentations to

help the audience with visualizations of the competitive
landscape.
 Figure 1. The market for sport utility vehicles.
Prestigious

Positioning

Prestigious
Ford explorer

Xylo
Ertiga Scorpio

Not Rugged
Rugged

Enjoy Safari

Not Prestigious
 Positioning
Airline Industry

Kingfisher

Air Deccan

Indigo
 Perceptual Map
Paramount-
Full Service Sector Specific
King Fisher
Jet Airways

Indian Airlines

Low price
Indigo Price
Jet Lite

Air deccan
No frills
King Fisher Red
 Positioning
Beer Industry

Strong

Lite

Draught
 Positioning
Management Education

Sector Based

Function Based

Delivery Based

Duration Based
 Perceptual Map

Main stream
Schools ISB
outside IIM
top 50
LIBA TAPMI
Low Price
Price
XLRI
Schools IFMR
outside IRMA TAPMI MICA
top 50 PGDM- Telecom BKFS

Sector Focused
Figure 1. The market for sport utility vehicles.
Prestigious

Positioning
Figure 1. The market for sport utility vehicles.
Prestigious

Positioning
 Constructing Perceptual Maps
• Allows us to compare each vehicle to all others on the map
along the perceptual dimensions listed on the axis. This
kind of analysis requires several assumptions. Among the
most important of these assumptions are

• Consumers evaluate all products in this category using the

attributes listed along the axis of the perceptual map.
• These attributes are the most important of all possible
attributes a consumer might use to compare products in
this category.
• The points depicted on the map, representing products, are
accurate representations of consumers’ view of the
marketplace.
 Constructing Perceptual Maps
• How marketing researchers collect and use data
on consumers’ perceptions to develop these
maps.
• We will first consider the situation in which the
analyst can make an initial hypothesis or guess as
to what perceptual attributes consumers may be
using to evaluate a product and then move on to
a situation in which no such prior hypothesis is
possible.
 Attribute Ratings Method
• Constructing the XY plot
• Product managers may have some idea about which perceptual attributes
their product(s) and those of their competitors are considered prior to
purchase.
• A good example is the SUV market depicted in Figure 1. Automobiles are
very high involvement purchases, usually requiring consumers to make
mental trade-offs between price and a number of other attributes of
competing products before a purchase decision is made.
• Over time, automobile manufacturers have developed a reasonably
sophisticated understanding, often through marketing research, of the
attributes consumers consider in this process.
• To develop a perceptual map, a manager must determine which two of
the possible attributes are the most important in the decision process and
how consumers’ evaluate each product in the competitive set with
respect to these two attributes.
 Engineering Attribute Vs Perceptual Attribute

• Start by collecting consumer ratings for each product, both the

product of interest and other products in the competitive set, for
each possible attribute that management believes consumers might
reasonably consider.
• Perceptual attributes are not the same as engineering attributes.
For example, “number of miles per gallon” is an engineering
attribute. It has a definitive answer. “Fuel efficiency,” while
probably highly related to this engineering attribute, is a perceptual
attribute.
• Consumers are not being asked to report the quantitative answer
to this question, but are being asked about their overall impression
of the vehicle along this dimension.
• Likewise, “interior space” is an engineering attribute while
“roominess” is a perceptual attribute.
 Conducting Survey

Measuring consumers’ perceptions is generally accomplished by using a Likert scale

survey instrument.2 The general form of this question is

[Insert vehicle name] is a [insert attribute] sport utility vehicle.

Neither Agree Strongly

Agree Strongly Agree nor Disagree Disagree Disagree
Average attribute rating for each Product

Vehicle 1 Vehicle 2 ……….. Vehicle N

Attribute 1
Attribute 2 [average score]
………….
Attribute M
 Overall Preference

 In addition to this information, the researcher will also ask a single overall
preference question, using the same Likert scale, for each vehicle.
 The preference question takes the general form: “I believe that [insert vehicle
name] is an excellent [insert product category].”

 So, continuing our example, one question would be “I believe that Toyota
4Runner is an excellent sport utility vehicle.” Thus, the total data set collected by
the research includes NxM vehicles- specific average attribute scores and N overall
preference scores.
 the total data set collected by the research includes NxM vehicles- specific
average attribute scores and N overall preference scores.
 Regression

To determine which attributes should define the axis of the perceptual map, the
researcher can estimate a preference regression using a simple linear model.
Specifically, the researcher should estimate:
 
Overall Preferencein = α + β1 Attribute1in + β2 Attribute2in + …+βM AttributeMin + εin
 
where Overall Preferencein is the preference of respondent i for product n, Attibute1in is
respondent i’s rating on Attribute 1 for product n and so forth. Greek letters represent
parameters to be estimated by the regression.

Estimating this regression will yield estimates of the parameters

(coefficients) with additional information that will allow the researcher to
determine whether the parameter estimates are statistically significant. 3
 Regression

Determining the attributes to use to define the axes is straightforward.

The researcher should choose the two attributes that have estimated coefficients that
are the greatest in absolute value subject to the restriction that are statistically
significant.

Practically speaking, if either of the two estimated coefficients that are the greatest in
absolute value are not statistically significant this probably means that (1) the sample
size is not large enough or; (2) the set of attributes tested by the researcher is not
capturing the important determinants of product evaluation, and serious
consideration should be given to rethinking the data collection from the beginning.
 Perceptual Map
Figure 2. The market for sport utility vehicles, attribute scores included.
Prestigious

 Cadillac
Escalade (1.2, 4.7)  Hummer
H2 (4.5, 4.6)
 Nissan

 Chevy  Jeep Pathfinder (3.6, 4)

Tahoe (1.9, 3.8) Grand Cherokee (2.5, 3.8)

 Toyota
4Runner (3.5, 3.3)
Not Rugged Rugged

 Ford
Explorer (2.1, 2)  Jeep
Cherokee (4, 1.7)

Not Prestigious
 Constructing the Vector
 We have now constructed a perceptual map using perceptual attribute ratings.
 There is one more potentially valuable piece of information that can be gleaned from the
data that has been collected to develop this map. Up to this point, this map contains no
information about which product would be preferred by consumers.
 Some preference information does appear obvious.
 For example, it appears that, all else equal, Nissan Pathfinder would be preferred
by most people to Ford Explorer because it is generally viewed as more rugged
and more prestigious.
 But, it is less obvious whether consumers generally prefer the Jeep Cherokee or the
Toyota 4Runner. The Toyota is more prestigious but the Jeep is more rugged.
 What are the trade- offs consumers are willing to make?
 This kind of issue becomes even more interesting when different perceptual maps are
developed for different potential target audiences.
 For example, the trade-offs men are willing to make among perceptual attributes may be
quite different from those women are willing to make.
 This kind of information is extremely valuable for product design decisions as well as
target selection and marketing communication strategies.
 
 Vector construct
 the procedure described above already contains enough information to be able to
develop stronger statements about consumers’ preferences. This is generally
accomplished through the construction of an “ideal vector,” a vector depicted on
the perceptual map, which illustrates these trade-offs.
 Vector construct
Figure 4. Constructing linear utility functions.
Prestigious

 Cadillac
Escalade  Hummer
H2
 Nissan
 Chevy  Jeep Pathfinder

Tahoe Grand Cherokee

 Toyota
4Runner
Not Rugged Rugged

 Ford
Explorer  Jeep
Cherokee

Not Prestigious
 Interpretation
 The concept of bedtime drink was,however, not popular in Asia (and India), and so
Horlicks was positioned as a `health drink for the family.' The tactic was to position
Horlicks as a health food drink of international standards, in markets where
competing products were mostly of local manufacture.

 The answer to the Toyota 4Runner versus Jeep Cherokee now becomes clear.
Because utility lines that intersect the ideal vector further from the origin represent
higher levels of preference or utility relative to those that intersect closer to the
origin, we can definitely state that, on average, people prefer the Jeep Cherokee to
the Toyota 4Runner.
 Perceptual Map
• Purpose #1: Understanding Market Structure
 Purpose #2: Perceptions of a Product Concept
 Purpose #3: Direction to R&D Efforts to Satisfy Customers Better
How would
you like to
position
yourself