The fundamental purpose of Permap is to uncover hidden structure that might be residing
in a complex data set. Compared to other data mining and data analysis techniques MDS is
growing increasingly popular because its mathematical basis is easier to understand and its
results are easier to interpret (Fitzgerald & Hubert, 1987).
Permap is an interactive computer program. It offers both metric (ratio and interval) and
nonmetric (ordinal, ratio + bounds, interval + bounds) MDS techniques. It solves problems in up
to eight dimensional space and allows boundary conditions to be imposed on the solution. In the
technical jargon, Permap treats "weighted, incomplete, one-mode, two-way" or "weighted,
incomplete, two-mode, two-way" data sets. Other jargon would say it handles weighted,
symmetric, incomplete, triangular or rectangular data sets. The word “weighted” means each
data point can have its own multiplier that reflects in some way the importance or reliability of
the point. The word “symmetric” means that Permap assumes that the (i, j) proximity value
equals the (j, i) proximity value, and “incomplete” means that it can handle missing data. The
one-mode, two-way and square references indicate that Permap can analyze a matrix of
proximity information between several objects, and the two-mode, two-way and rectangular
references means it can analyze objects each of which are specified by an array of attributes.
Permap can treat up to 1000 objects at a time (but see cautions in Section 11) and each
object can have up to 100 attributes. It is easy to use, Windows PC-based, visually oriented, and
allows real-time interaction with the analysis. It has been designed to have an intuitive interface
and it avoids many of the arcane alternatives that are seen in the research literature but are never
used in practice.
Use of perceptual map as a step in positioning and building VP:
Perceptual map or positioning map is a visual tool to depict the place of different products based on 2 attributes important to consumers. The map shows how the customers perceive each brand in terms of the 2 attributes on the horizontal and vertical axis. At the same time, the map can should what will be the ideal location from the customer’s point of view for a product. Once a perceptual map is completed, it will also illustrate possible locations (attributes) that the product can enter the market.
Using the perceptual map, one can easily identify the POP (Points of Parity) and POD (Point of Difference) of products compare to each other. Then POP and POD can be used to create the value proposition. The POP will be used to show user that our product can deliver what other products in the market can deliver and POD will show what our product which others can’t (or have poor performance in that area)
For example in cordless phone market a perceptual map can look like this:
As it can be seen from figure 1, B&O which is a high-end product has the highest rating from user perception on audio quality and industrial design (FYI a base and a handset unit can cost as high as $7000 USD). But in figure 2, this brand loses the size and life time of the battery to other brands. So for a value proposition for this brand, efforts should be focused on audio quality and design. On the other hand for VTech and Undien audio quality and battery life are POPs as both brands deliver similar battery life hours and audio quality, but a POD for VTech will be smaller handset design, where as a POD for Uniden can be better industrial design.
Group - Marketing 3
Author of the Article - Naveed Sheik