## Tuesday, 30 August 2011

### Perceptual Mapping.....!

Perceptual mapping has been used as a strategic management tool for about thirty years. It offers a unique ability to communicate the complex relationships between market place competitors and the criteria used by buyers in making purchase decisions and recommendations.

Perceptual maps may be used for market segmentation, concept development and evaluation, and tracking changes in marketplace perceptions among other uses.

Perceptual mapping involves two steps: (1) data collection and (2) data analysis and

presentation.

Data Collection

Among the various mathematical and statistical methods used to produce perceptual maps, multiple discriminant analysis provides the most reliable methodology because :

1. Discriminant analysis has a close linkage between product points and attribute locations.

2. Discriminant analysis maps do not change if attributes are added that are linear combinations of those already present in the perceptual space.

3. Discriminant analysis is the most efficient method in terms of cramming into a space of low dimensionality the most information about how products differ.

4. Unlike mapping based on distances or similarities, DA make use of attribute ratings, which are easy and natural for respondents, and useful for their content even if

mapping is not done with them.

Employing this methodology, respondents are never asked about similarities among products or subjects; they are asked to rate products on attributes, and similarities are inferred from differences in respondents’ ratings.

Data Analysis and Presentation

Multiple discriminant analysis uses the “F ratio” to determine attribute and product or subject location in the perceptual space. The F ratio is a ratio of the variance between ratings of different products/subjects to the variance of ratings within products/subjects. In an attribute study, these variations among ratings are generally of two types:

1. The differences between products/subjects, revealed in the difference between average ratings for different products.

2. The differences within products, revealed in the differences among respondents’ ratings of the same product.

Multiple discriminant analysis finds the optimal weighted combination of all the attributes which would produce the highest F ratio of between-product to within product variation. That weighted combination of attributes becomes the first dimension of the perceptual map.

### An Example of Perceptual Mapping

This hypothetical example of the beverage market illustrates one of the primary results of a perceptual mapping study—the map itself.

In the perceptual map below, both functional attributes (“sparkling”) and emotional attributes (“youthful”) are included. Each attribute is represented by an arrow. Attributes that are close to one another are related, and the types of beverages are positioned near the attributes that best describe them.

By understanding the position of the client brand and competitive brands, the following questions may be addressed:

• What attributes does the brand own? What attributes do competitors own?
• Are there gaps in the market that may be filled by the client brand?
• How should the brand be positioned to be both relevant to the market and differentiated from the compete tion?

Thus, Perception Mapping offers a number of industry-tested solutions that can be rapidly adapted to your unique environments.

By

Sushma Pamidi – Operations Group 2