## Tuesday, 30 August 2011

Permap

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:

Figure-1 figure-2

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

Perceptual Mapping -- Deciding What Image to Project

Before you embark on an image advertising campaign, you need to know the type of image you wish to convey. A key component of your decision should be an understanding of your current image and your competitors' images. This knowledge can be gained through image research and perceptual mapping.

The process is rather simple. Using a survey of the market, you measure the image of your company and your key competitors using a series of image "attributes." These "attributes" are dimensions measuring such items as "speed." "low prices," "courtesy," "high tech," "accuracy," etc. You also measure how each company rates on a "best for people like me" scale. This enables you to calculate the relative importance of each attribute by establishing the mathematical relationship between the attributes and the "best for people like me" scale.

You can then plot the performance of each company and importance of each attribute in two-dimensional space. A typical plot would look similar to the below. Each letter represents one company. (We've plotted only five attributes for illustrative purposes. When you are measuring four competitors, you could measure and plot as many as ten or twelve attributes if you desire. To measure more attributes than that would be to extend the survey to an unreasonable length.)

After you have plotted the importance and performance ratings, you can begin to formulate a "desired image." In doing so, you need to consider several things:

• Your competitive position on each attribute,
• Whether your "strengths" are recognized in the marketplace,
• Your perceptions of how feasible it would be to move an attribute in perceptual space,
• The uniqueness of your desired position.

Suppose you are company B. Your though process might go something like this.

"My company is highly accurate, and we could move to the right of company A on accuracy with the right advertising campaign. However, accuracy is the lowest attribute in importance, so the benefit would be limited. We won't worry about promoting accuracy."

"All five companies are about tied in consumer perception of speed, and we all do rather well, so there isn't much potential benefit there. Scratch speed."

"Our rating on high tech is pretty good, but I could still move up perception on that. Let's check out the other two attributes before we make a decision."

"There seems to be a lot of opportunity to improve on low price. Nobody does well on this attribute.We are more efficient than our competitors, and could afford to lower price a little. I don't want us to be viewed as being "cheap," but we could do better on this attribute."

"Look at the opportunity on courtesy. We know we have high customer satisfaction scores -- and it's the most important attribute. There's our opportunity."

From this train of thought, you may decide to develop a campaign with a theme like the courteous service you deserve, at a price you can afford. If your campaign is successful, the next time you measure image the plot may look like the one below. Notice how company B has moved to the right (toward the high performance side of the scale) on the two most important attributes.

Group - Marketing 3

Author of the article - krishnaraj Chaturvedi

### A few applications of Perceptual Mapping

Perceptual Mapping

A few applications

PERCEPTUAL MAPPING- yet another tool to complement the omnipotent STP theory that our marketing friends talk about. They say it helps the marketer know how products are perceived by customers which in-turn aids them in “positioning” a new product. Brands of chocolates, for examples, when mapped against 2-dimensional attributes can be used to identify gaps in the market- consumer needs that are not being met (something like in the picture below).

However, contrary to the usual belief, the application of this visual tool does not end at marketing and branding. When applied judiciously, it can be used in behavioral finance to examine investing patterns of investors. Infact, a study by Skyline Business School attempted to understand the financial behavior of high net worth investors in mutual funds. Apart from rates of return and risk, other factors, that influence financial decisions, like savings capacities, income levels, ability to evaluate product choices and performance, confidence in products, service providers and regulators, tax incentives, as well as ease of market access were also taken into consideration.

And after marketing and finance, guess what, even HRs manage to get their hands dirty in this, as if already a million mind-boggling personality theories were not enough. They say perceptual mapping can be used to identify, understand and address issues such as organization culture and workplace diversity, employee profiling and candidate selection, employee retention and exit surveys.

Considering its diverse applications, as a random thought, what about using perception mapping to examine interviewee qualities as viewed by interviewers and then verifying their selections accordingly? PLACECOM, where art thou??

Author- Sahil Singhal

Finance Group 3

### Perceptual Mapping

A crucial issue in strategy development is staking out a valuable place in customers’ minds. Customers (and potential customers) think about different companies/brands/products in different ways and companies try to position themselves in different ways to gain advantage.

For example, in general, Volvo is about safety, BMW is about performance, Toyota is about quality, Hyundai is about value. By staking out a credible position on a dimension important to customers, a company can capture customers to whom this dimension is important. In the car industry, positioning is pretty c

lear.

Perceptual Mapping

Customers simultaneously consider many attributes in their purchase decision. Sometimes their opinions on these many attributes can be thought of as driven by their attitudes on a smaller number of underlying latent actors. For example, in the banking industry, a customer may choose an institution because of their perception of how the various institutions compare on many attributes. Such attributes may include branch hours, ATM locations, online banking, check imaging, email notifications, and overdraft protection. Their perceptions of these attributes ay be driven by their attitude toward an underlying latent factor related to convenience and ease of use. If you knew the customer’s attitude on this one latent factor, it would explain how the customer rates an institution on each of these many attributes.

There is a statistical technique called factor analysis that identifies the presence of underlying factors. It allows you to work with a few factors instead of many attributes. This technique can be used to generate the data needed for a perceptual map.

Another technique is ca

lled multiple discriminant analysis. The approach develops linear combinations of the attribute ratings which can be used to predict to which company/brand/product a particular set of ratings belongs. The output of such an analysis can also be used to generate a perceptual map.

Above is an example of such a perceptual map generated from a discriminant analysis. Teenagers were asked to rate various drinks (milk, lemonade, sodas, etc.) on various attributes (good value for the money, popular, nourishing, healthfulness, etc.).

Attributes are shown with a dotted arrow. The length of the arrow indicates how important the attribute is in differentiating between the types of drinks. The longer the arrow, the more important it is. Lines that are close together indicate that the attributes are similar. For example, fizzy and good-value-for- the-money are important attributes. Nourishing and healthfulness are very similar.

Drawing perpendicular line s from a drink to an attribute allows comparison of the drinks. For example, a new product, flavored milk, is considered more modern than regular milk. Coke®, Fanta® and lemonade are similar in the minds of the teenagers because they are near each other on the plot.

A map like this allows comparison of multiple attributes and multiple companies/brands/ products at the same time. It allows you to see if your product occupies the space in the customer’s mind that you intended. It also allows you to identify white space opportunities. In the map above, there are areas that no drink occupies. If the areas are associated with attributes that are important to customers (as determined by your survey) these are white space opportunities for you to explore.

Perceptual mapping is a very useful tool for understanding company’s position in the minds of customers relative to competitors. This is crucial to staking out a valuable place that provides long- term competitive advantage for company and its products.

Author- Sushant Dhall

Finance group 3

### A Crazy Experiment on Perceptual Mapping !!!

Something very strange happened to me today, after nearly 10... No, 11 years... nope its 12... Forget it doesn’t matter, the point i am trying to make is, i happened to sit in the first row of a class after nearly so many years. And that too for 3 hours in a business analytics class.After sitting for 3 hrs now i know why these first benchers get so many marks in exams, u get to hear everything professor says and you don’t get distracted like last benchers like sleeping or staring at a girl, or doing any other better thing in life. But being last bencher all my life i couldn’t stop myself to implement my learning`s in a typical back bencher style. So here it goes.

The topic for the day was Perceptual Mapping which was done using software called Permap. If u ask what perceptual mapping is its simple “It’s a map where we can map the perceptions”. It’s used to make some of the tough decisions in marketing (!) and in some other industries which you can see here in the other blog posts. But what i am trying to do here is to map the perceptions of something that is so tough to predict in the whole world. Any guesses?  Storm, stock markets, Sreesanth...Nope It`s a woman... they are one of the most toughest to predict and understand, their mind is so fast and complicated which will make even a higher end Intel processor  look inferior. To solve this problem and make every guys life easier let us consider that some jerk like me(!) has found a mobile app which will generate a Perceptual map on his phone about whichever girl he`s currently speaking to. And based on the map the app gives some recommendation on what the girl is thinking and what the guy is supposed to do. Here is the conversation

Girl: I`m planning to go shopping, you coming?
The guy looks at the app, where the girls perception is plotted as a star and the recommendation below

He thinks he`s safe (we guys are so stupid):
Guy: Actually I’ve got some work tonight?
Girl: Is it so important?
The guy looks at the app

He`s terrified: “We`ll i can mange some time where are you planning to go?
Girl: What are you looking in your mobile? Are you looking at someone other than me ?
Guy (Doesn`t look at the app this time): Come on its nothing, u know me better, tell me where are we going?
Girl: I was thinking we can go to brigade and buy some stuff, and a movie perhaps? But looks like u have no time for me.
The guy looks at the app again

He replies,”Movie, that`s gonna be a lil tough ? Can we go this weekend?
Girl doesn’t reply anything. The guy looks the mobile

He presses the “S pls” button, the app crashes and a spark comes out of mobile hurting the guys hand.
Girl: Oh shit!!! What happened to your phone...? Your hand is bleeding, Come on we`ll go the doctor
The girl takes him to the doctor, the guys picks up his phone and to his surprise the app flashes in the screen

Hope you found this entertaining, I’m kind of sure that guys would welcome such an application.

If i had hurt the sentiments of any of the female audience, i am not apologizing, because i don`t give a damn :)

If our professor reads this post he will never ever call me to the first bench.

References : Based on a true event from every guys life :))

Cheers
Ragu

Group: Marketing 5
Author : Ragunathan A
Roll No: 13032

### Learning Multi-Dimensional Scaling (MDS)

Today, i.e. on 30th August, 2011 we had our lecture number 7, 8 &9 on business analytics. In this we learnt, understood, applied & discussed the technique of Multi-Dimensional Scaling (MDS). We learnt the design & interpretation of the map & making a strategy based on that using relevant data, first-level analysis & above all innovative ideas & solutions.

Also known as PERCEPTUAL MAPPING, it is a popular method to analyse & understand consumer perceptions of products, brands, etc. It produces a graphic representation of consumer’s mind, which is visually appealing & readily discernible. Often it is more valuable than heaps of data or complex tables, full of numbers. Hence, it is no surprise it is commonly used across various fields, ranging from business to academics & henceforth.

In marketing, it is commonly used for product or brand positioning. For eg- in a two dimensional X-Y plane, where X axis measures price & Y axis measures quality, we can map consumer perceptions of say, cars. Thus, Mercedes will fall in the quadrant of high-price & high quality, whereas a brand like Maruti maybe perceptually low price & medium quality. Hence, it helps to identify gaps in positioning & helps businesses & managers to design suitable strategies for the existing product or brand or completely reposition it.

It can be based on two methods-

Attribute based

Overall similarity/ dissimilarity

The tools required for perceptual mapping, which we also used in the class are- SPSS, Permap software, MS Excel & Notepad. In class we solved few problems on the perceptual mapping & made some suggestions. For eg- we studied the perceptions of 6 different beer brands like Budweiser, Heineken, Fosters, Carslberg, Kingfisher, etc. First, we have pairs of the brands & then rated them together as a pair & found out the mean. Then, using SPSS functions & commands, we generated a proximity matrix showing the relative distance amongst brands. Eg- Budweiser-Heineken pair had a distance of 0.856 while, Kingfisher-Carlsberg had a distance of 0.343 in the matrix. Thus, this showed a stronger association between Budweiser- Heineken as opposed to Kingfisher-Carlsberg pair. This proximity matrix data was then transferred to the notepad, from where it was extracted on the permap software. Here, we did the actual mapping & formed clusters on the basis of overall similarity. We tried to minimize the error value as much as possible, to ensure reliability of data. Thus, by adjusting the data to suit the requirements & objectives of the study, we produce a valid perceptual map, which can then be processed, interpreted & used for strategy formulation or providing solutions.

We also did attribute based scaling amongst cellphone users studying relationship between users of sms, alarm, camera, etc. Our group also did an analysis on retail store satisfaction & age groups. The key learning here was, closer the variable group is to the arrow-head, the stronger the relationship. Thus, in our case, the students (18-24) were the farthest from 4 out the 6 variables & hence, using perceptual mapping & first level analysis, we were able to identify the gaps & problems & suggest solutions.

Overall, it was a rich learning experience in the class today & it was good to learn such a useful business technique, (through different data sets & examples) which has diverse applications & is being used by companies on a wide scale.

- Author: Abhinav Jain, 13121, Marketing Group-1

### Perception mapping the easy and complex face of Analytics

Raghavendra Pratap Singh- 13031

Finance- Grp 6

### Perceptual Mapping in market research

Multidimensional scaling (MDS) is a set of related statistical techniques often used in information visualization for exploring similarities or dissimilarities in data. The term perceptual mapping refers to a collection of techniques which can be used to generate graphical representations of perceived product relationships. Although they generally also contain relevant product attributes, lending interpretability to the map, it is not necessarily a requirement. It is an invaluable tool to reduce a large data set with numerous attributes into an easily interpreted 2-dimensional plot. One hazard is some loss of data inherent in this type of analysis. A 2-dimensional plot may not fully, or accurately, depict the relationships among products or between products and attributes.
After spending a substantial amount of time introspecting, the Facebook window which has reserved a permanent place on my Taskbar, opened up the usage of perceptual mapping in social media. As social media emerges as the new medium of marketing, it also provides the largest repository of consumer responses. Take an example of Walmart. The Facebook page of Walmart has a response base of 8,777,644 people of whom 37,827 are monthly active users. A simple post by the retail giant leads to thousands of responses every day. How they might use perceptual mapping would become clear if we concentrate on the posts they put up, “Sandra Webster's commitment to fighting hunger in America makes her an Everyday Hero in our minds. Who is the person who makes a difference in your community?” The questions may be based on several attributes and the responses would become a set of numerous variants. Using certain simple algorithms, the string series can be grouped into clusters of similar responses. This information can be used to compare the preferences of different groups of people. The result can be used in assortment planning, store layout , advertisement strategies etc.
Drifting a little from social media, the movie which is being known as a marketing success, ‘Zindagi Milegi Na Dobara’ is the best example of a perfect output of perceptual mapping. The movie targets the urban youth with elan. Analysis of responses to different variables can lead to a perceptual map of behavioral patterns of youth, their habits, aspirations , goals etc. Movies with the correct combination of such attributes can prove to be a strategic success .
This tool can also be used for positioning of brands in a market. Once the appropriate segment of the market has been identified, the challenge is to position the product so that it meets the needs and wants of the target customers.
The market perceptual map will provide the range of “positions” that a product can take in a market based on two dimensions that are important to customers.
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.

Name : Sayantani Chatterjee
Roll : 13103
Marketing Group 6

MARKET 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 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.

PERCEPTUAL MAPS USING ATTRIBUTE RATINGS FOR POSITIONING
Example: Positioning of Beers
PERCEPTUAL MAPPING OF BEER MARKET

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

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
SOURCES: