Perceptual Mapping

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<p>Workshop on Mapping Procedures to ascertain positionsRaj Echambadi</p> <p>Why Mapping?An organic chemist reads diagrams such as the one here</p> <p>An Electrical Engineer reads diagrams such as the one here</p> <p>Marketing strategy people read perceptual maps.</p> <p>What is a perceptual map? A perceptual map is a visual representation of how</p> <p>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</p> <p>Perceptual Map of only Attributes</p> <p>Perceptual Map of only Products</p> <p>Both Products and Attributes</p> <p>Important Decisions Before Positioning Exercises What brands should be positioned? What categories are involved (substitutable)? What are the appropriate attributes to</p> <p>measure?</p> <p>Profile analysis a.k.a. Snake PlotsBank A Bank B Fast service Friendly Honest Convenient location Convenient hours Broad service High saving rates</p> <p>Levels of CompetitionBeer Ice cream</p> <p>Tea</p> <p>Regular colas</p> <p>Diet lemon limes Diet-Rite cola</p> <p>Wine Diet Pepsi Fast foodFruit flavore d colas</p> <p>Diet Coke</p> <p>Direct competition: Diet colas Juices</p> <p>Bottled water</p> <p>Lemon limes</p> <p>Indirect competition: Soft drinks</p> <p>Video rentals</p> <p>Baseball cards</p> <p>Coffee</p> <p>Generic competition: Beverages Budget competition: Food and entertainment</p> <p>Methods for Determining Competitors Existing categories: SIC Managerial judgment Customer-purchase-based</p> <p>NAICS</p> <p>www.census.gov/epcd/www/naics.html</p> <p>measures</p> <p>Managerial Judgment of CompetitionMarkets Product/Services Same Different</p> <p>Same</p> <p>A C</p> <p>B D</p> <p>Different</p> <p>Customer-purchase-based measures Brand Switching Data</p> <p>The Extent of Substitutability among Brands</p> <p> Cross-Elasticity of Demand:</p> <p>Change in Brand Bs Sales/ Change in Brand As Price</p> <p> Mainly Used for Nondurable Products</p> <p>Brand-Switching MatrixTime t+1A A .6 .2 .2 0 .1 B .2 .3 .3 .1 0 C .2 .4 .5 .1 0 D 0 .1 0 .5 .4 E 0 0 0 .3 .5</p> <p>Time t</p> <p>B C D E</p> <p>Developing A Perceptual Map Two Alternative ways</p> <p>Rating method (AR) Overall Similarity method (OS) Attribute</p> <p>Perceptual Mapping Means graphic description of customers</p> <p>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&amp;D efforts to satisfy customers better.</p> <p>Attribute Rating Method Data</p> <p>Cube (brands*attributes*respondents) Statistical Analysis (Factor Analysis) Find out two (or three) axes for the perceptual map B2B products ok.</p> <p>Overall Similarity method (OS) Suitable</p> <p>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</p> <p>Example: Pain Reliever Market</p> <p>Effectiveness: perceptions on the ability to make headache pain go away fast Gentleness: perceptions that the product would not upset ones stomach or cause heartburn</p> <p>Is there a positioning opportunity along gentleness and effectiveness?</p> <p>Which opportunity is better?</p> <p>Determine the Ideal Vector of your Segment</p> <p>Ideal vector is a fancy term for finding the importance weights (placed by consumers) of the dimensions.</p> <p>Benefit Segmentation - Positioning by Segments</p> <p>Gentleness</p> <p>Cluster 1: Age =&gt;60, Income = &lt; 30K Cluster 2: Age = $60K</p> <p>Effectiveness</p> <p>Segment-wise PositioningsGentleness TylenolIdeal for segment 1. Two different products / positionings Ideal for segment 2.</p> <p>Bufferin Private Label Aspirin Bayer Anacin Excedrin</p> <p>Effectiveness</p> <p>List of Attributes For Soft Drink Data (1 = strongly disagree to 7 = strongly agree) </p> <p>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.</p> <p>Example 1</p> <p>a Rotated Factor Matrix</p> <p>1 X2 X5 X9 X6 X4 X8 X1 X7 X3 X10 .930 .925 .924</p> <p>actor 2</p> <p>3</p> <p>.937 .936 .858 .915 .863 .855</p> <p>Extraction Method: Principal xis actoring. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 5 iterations.</p> <p>Perceptual Map of Soft Drinks1. t i t . Coke . i</p> <p>-. G t r -1. All ort</p> <p>FAC2</p> <p>-1. -1. -1. -. . . 1.</p> <p>FAC1</p> <p>Perceptual Maps of Deodorants</p> <p>Ganesh and Oakenfull (1997)</p> <p>Example 2</p> <p>U.S. Sample</p> <p>Mexican Sample</p> <p>LEVELS OF COMPETITIONVacationW/In Budget Competition Generic Competition</p> <p>Tropical Vacation</p> <p>CaribbeanSki Vacation British Virgin Islands Barbados Big Screen TV Bermuda</p> <p>Higher-Order Competition</p> <p>Outer Islands</p> <p>Hawaii</p> <p>Cayman Islands</p> <p>Nassau/ Paradise Island US Virgin Islands</p> <p>The Bahamas Grand Bahama Island</p> <p>Category Competition</p> <p>Sub-Category Competition</p> <p>Aruba Jamaica Florida</p> <p>Theme Park Vacation</p> <p>Mexico Car European Vacation</p> <p>Home Repair</p> <p>DIMENSIONS OF IDEAL DESTINATION ATTRIBUTES </p> <p>FAC OR ANALYSIS - DIMENSIONS OF IDEAL DES INA IONBEACHES SAFE / VALUE FOR LUXURY ONEY FRIENDLY CULTURE/ HISTORIC PRISTINE / SLOW ACTION ACTIVITIES</p> <p>0. 0. 0.</p> <p>APPEALS TO SOME</p> <p>Factors arranged in order of importance based on mean ideal ratings.</p> <p>GOOD TO HAVE FOR MOST</p> <p>MUST HAVE FOR ALL</p> <p>Lot of ter related act t es+ 0. St , eaut f ul eaches 0. Easy and carefree at osphere 0. 1 0. Fr endly, elcoming people Safe at all hours 0. 2 Good alue for money Reasonably priced resorts Budget hotels Luxury hotels Top five star resorts Variety of uality restaurants High- uality retail shopping Spas Direct air service from my city Warm eather four seasons a year Historic and cultural attractions Authentic, historic small towns Museums Festivals / Music Performances Eco-friendly Island style architecture Awe-inspiring scenery Colorful Pristine, remote island Slow pace of life Not too many people Authentic genuine place with very little commercialization Lots of action Exciting and diverse nightlife Bustling with visitors Quality casinos A cruise destination Kayaking Fishing Great Golf courses</p> <p>0. 1 0. 0. 0. 0. 0. 0 0.25</p> <p>0. 0. 5 0.59 0. 0. 0. 0. 0. 0</p> <p>0. 0.57 0.51 0. 9</p> <p>0.74 0. 4 0.53 0.48 0.46 0.57 0.50 0.49</p> <p>JAMAICA Primary and Secondary Associations</p> <p>NASSAU / PARADISE ISLAND Primary and Secondary Associations</p> <p>OUT ISLAND OF THE BAHAMAS Primary and Secondary Associations</p> <p>KEY WEST Primary and Secondary Associations</p>

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