Tuesday, 30 August 2011

http://4.bp.blogspot.com/-uUx5AZYLTwA/TZ9K7k0A6QI/AAAAAAAAAQs/EgXqRIxP-Ng/s1600/Three%2BBasic%2BPrinciples%2Bof%2BChess%2Balaskajunior%2Bgolf%2Blucky%2Blife.jpgMARKET POSITIONING STRATEGY: MADE EASY WITH PERCEPTUAL MAPPING!!
Perceptual mapping (also known as Multidimensional Scaling) is a graphics technique used by asset marketers that attempts to visually display the perceptions of customers or potential customers. Typically the position of a product, product line, brand, or company is displayed relative to their competition.
There are two methods:
1.      Attribute-ratings methods (particularly useful for functional products)
2.      Overall-similarity methods (particularly useful for image-oriented products)

Here is a list of the marketing functions that perceptual mapping serves:
           Brand positioning
           Market segmentation
           Concept evaluation
           Product positioning
           Positioning analysis
           Cluster analysis
           Trend analysis
           Competitor analysis
           Identifying new market opportunities
           Identifying potential customers
A brand’s position is the set of perceptions, impressions, ideas and feelings that consumers have for the product compared with competing products. Marketers plan positions that give their products the greatest advantage in selected target markets, and they design marketing mixes to create these planned positions.
Perceptual maps are often used in brand research  to represent consumers’ perceptions of brands or products on two or more dimensions represented by X- and Y-axes, each with ends that have opposite meaning (e.g. bitter vs. sweet, cheap vs. expensive).  Each brand has a position in the perceptual map  space that reflects their relative similarity or preference to other brands with regards to the dimensions of the perceptual map .  With the help of perceptual maps we can transform consumer judgments of similarity or preference into distances represented in a multidimensional space.

Perceptual Map
Perceptual Maps are useful in marketing for these key reasons:
1.         Assessing strengths and weaknesses of relative to competing brands along certain criteria important to the customer.
    This is revealed by the positions of the marketer's brand and competing brands along the axes.
2.         Identification of competitive advantage for the brand
    Perceptual maps show differentiation among products in the customer's mind.
    For example, in a perceptual map representing the car market based on two dimensions, “conservative “ vs. “sporty” and “classy/ distinctive” vs. “practical/affordable,” Porsche will probability be seen as the classiest and sportiest of the cars in consumers’ minds, providing the brand with a strong competitive advantage. Assess opportunities for new brands, as well as for repositioning existing brands.
3.         Identifying market opportunities                                       
    Empty spaces near an ideal point (meaning an attractive market segment) on the perceptual map represent potential market opportunities.
4.         Market evolution. Tracking customer perceptions over time, and comparing perceptual maps developed at each point in time, can reveal how the market is changing. 
    First, ideal points may shift as new offerings enter the market and as markets mature.  For example, as product and process quality programs diffused through industry, consumers’ ideal points are likely to have shifted to reflect higher quality expectations, as well as to reflect closer positions of competing offerings along the quality dimension. 
    Second, the most important attributes may change as a result of environmental changes and the creative positioning of new entrants. 

Example: Positioning of Beers

Each of the approaches used for perceptual mapping has advantages and disadvantages:
Perceptual Map Approach

Few guidelines for Interpreting Perceptual Maps
1.      The arrow indicates the direction in which that attribute is increasing (The attribute is decreasing in the direction opposite to the arrow).  Thus, a beer positioned farther in the North East direction are popular with men, whereas a beer positioned in the South West direction is less popular with men.
2.      The length of the line from the origin to the arrow is an indicator of the variance of that attribute explained by the 2D map.  The longer this line, the greater is the importance of that attribute in helping you to interpret the map.   Thus, “Good value” and “Less filling” are relatively more important than “Pale color” and “Blue collar” in explaining how this group of customers discriminates between the different beers.
3.      Attributes that are both relatively important and close to the horizontal (vertical) axis help you in articulating the meaning of the axis.  Here, the two dimensions along which these customers seem to discriminate between the beers appear to be “Budget-Premium” for the horizontal axis and “Light-Heavy” for the vertical axis.  This interpretation can be based on attributes most correlated with the axes (Premium, Special occasions, Blue collar, Budget, etc. for the horizontal axis, and Heavy, Light, Pale color for the vertical axis).
4.      To position a particular beer on an attribute, draw an imaginary perpendicular line from the location of that beer onto that attribute.  (These are shown by dashed lines on the map).  Thus, Budweiser is perceived to more popular with men than Coors.
AUTHOR NAME: Ekta Malhotra
GROUP:Marketing 2
E-book: Marketing engineering: computer-assisted marketing analysis and planning By Gary L. Lilien, Arvind Rangaswamy

Ekta Malhotra 

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