New Products Management Chapter 6 Analytical Attribute Approaches: Introduction and Perceptual Mapping

What are Analytical Attribute Techniques? Basic idea: products are made up of attributes -- a future product change must involve one or more of these attributes. Three types of attributes: features, functions, benefits. Theoretical sequence: feature permits a function which provides a benefit.

Gap Analysis Determinant gap map (produced from managerial input/judgment on products) AR perceptual gap map (based on attribute ratings by customers) OS perceptual map (based on overall similarities ratings by customers)

A Data Cube 700 . . . 2 1 Attributes 1 2 3 .... Brands .... X Ideal 1 Figure 6-3 A Data Cube 700 . . Respondents . 2 1 1 2 3 .... Brands .... X Ideal 1 2 . 15 Attributes

Obtaining Customer Perceptions Figure 6-4 Rate each brand you are familiar with on each of the following: Disagree Agree 1. Attractive design 1..2..3..4..5 2. Stylish 1..2..3..4..5 3. Comfortable to wear 1..2..3..4..5 4. Fashionable 1..2..3..4..5 5. I feel good when I wear it 1..2..3..4..5 6. Is ideal for swimming 1..2..3..4..5 7. Looks like a designer label 1..2..3..4..5 8. Easy to swim in 1..2..3..4..5 9. In style 1..2..3..4..5 10. Great appearance 1..2..3..4..5 11. Comfortable to swim in 1..2..3..4..5 12. This is a desirable label 1..2..3..4..5 13. Gives me the look I like 1..2..3..4..5 14. I like the colors it comes in 1..2..3..4..5 15. Is functional for swimming 1..2..3..4..5

Snake Plot of Perceptions (Three Brands) Figure 6-5 Ratings Aqualine Islands Figure 6-5 Snake Plot of Brand Ratings Sunflare Attributes

Data Reduction Using Multivariate Analysis Factor Analysis Reduces the original number of attributes to a smaller number of factors, each containing a set of attributes that “hang together” Cluster Analysis Reduces the original number of respondents to a smaller number of clusters based on their benefits sought, as revealed by their “ideal brand”

Selecting the Appropriate Number of Factors Figure 6-6 Selecting the Appropriate Number of Factors The Scree Percent Variance Explained No. of Factors

Figure 6-7 Factor Loading Matrix

Figure 6-8 Factor Scores Matrix Sample calculation of factor scores: From the snake plot, the mean ratings of Aqualine on Attributes 1 through 15 are 2.15, 2.40, 3.48, …, 3.77. Multiply each of these mean ratings by the corresponding coefficient in the factor score coefficient matrix to get Aqualine’s factor scores. For example, on Factor 1, Aqualine’s score is (2.15 x 0.145) + (2.40 x 0.146) + (3.48 x -0.018) + … + (3.77 x -0.019) = 2.48. Similarly, its score on Factor 2 can be calculated as 4.36. All other brands’ factor scores are calculated the same way.

The AR Perceptual Map Aqualine Gap 1 Islands Molokai Splash Sunflare Figure 6-9 The AR Perceptual Map Aqualine Islands Splash Molokai Sunflare Gap 1 Gap 2 Fashion Comfort

Uses of Mapping Techniques Understand the market structure of product categories as perceived by customers. Select the set of competitors to compete against. Image studies to help position the organization. Represent customers’ perceptions and preferences in a manner that aids communication and discussion within the organization. Evaluate a new product concept in the context of existing brands in the market. Developing a name for a new product. 4 7 5

Mapping Methods in Marketing Joint Space Maps (includes both perception & preference) Perceptual Maps Preference Maps Similarity-based methods Attribute-based methods Ideal-point model (unfolding model) Vector model External analysis using PREFMAP-3 Simple “joint space maps” using modified perceptual mapping methods Positioning–8 8

Perceptual Maps Using Attribute Ratings Example: Evaluation of New Laptop Concept with Longer Battery Life Select a set of laptop computers of interest to the target group (including the new concept). Identify key attributes (eg,through focus groups). Ensure that consumers are familiar with the laptops (eg, through video presentation). Have consumers evaluate the laptops. Reliable .............................. Unreliable (A1) Common .............................. Distinctive (A2) Light .............................. Heavy (A3) Short battery life .............................. Long battery life (A4) • • • Poor value .............................. Good value (A15) 6 6 9

Perceptual Maps Using Attribute Ratings cont’d Generate a matrix of inputs consisting of each consumer’s (C1, C2,...) Ratings of each brand on each of the attributes (A1, A2, A3,....) A1 A2 A3 A4 ............... A15 Dell 320N 6 3 7 2 2 C1 TI Travelmate 4 3 4 1 5 Toshiba concept 3 6 2 7 7 • • • Dell 320N C2 TI Travelmate Toshiba concept Compute average ratings of each brand on each attribute. Submit data to a suitable perceptual mapping technique (eg, MDPREF or Factor Analysis). Interpret the underlying key dimensions of the map using the directions of the individual attributes. Explore the implications of how consumers’ view the competing products. 7 10 7

Example Plot of Attributes of Laptops on a 2D Perceptual Map Common Toshiba 1960CT Easy setup Slow Performance Light Value  C “Butterfly” Elegant Looks The six attributes were measured on semantic differential scales: 1) Slow–Fast operation, 2) Plain–Elegant, 3) Easy–Difficult setup, 4) Poor–Excellent value, 5) Light–Heavy, and 6) Common–Distinctive. 8 11 8

Example Plot of Attributes of Laptops on a 2D Perceptual Map (Plain) Common Toshiba 1960CT Easy setup Slow Performance Light Good Value  C “Butterfly” Elegant Looks 9 12 9

Guidelines for Interpreting Perceptual Maps (Laptop) The arrow indicates the direction in which that attribute is increasing (The attribute is decreasing in the direction opposite to the arrow). 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. 10 13 10

Guidelines for Interpreting Perceptual Maps (Laptop) cont’d Attributes that are both relatively important and close to the horizontal (vertical) axis help interpret the meaning of the axis. To position a laptop on each attribute, draw an imaginary perpendicular line from the location of the laptop onto that attribute. (These are shown by dashed lines on the map). 11 14 11

Perceptual Map of Beer Market (This slide shows only the products) Old Milwaukee Budweiser Beck’s Meister Brau Heineken Miller Coors Stroh’s Michelob Coors Light Miller Lite Old Milwaukee Light 12 12 15

Perceptual Map of Beer Market cont’d (This slide shows only the attributes) Heavy Popular with Men Heavy Full Bodied Special Occasions Blue Collar Dining Out Premium Good Value Budget Premium Popular with Women Pale Color On a Budget Light Light Less Filling 13 16 13

Perceptual Map of Beer Market cont’d (This slide shows both products & attributes) Heavy Popular with Men Heavy Full Bodied Old Milwaukee Budweiser Beck’s Meister Brau Heineken Special Occasions Miller Blue Collar Dining Out Premium Good Value Coors Budget Stroh’s Premium Michelob Coors Light Popular with Women Miller Lite Pale Color On a Budget Old Milwaukee Light Light Light Less Filling 17

Failures of Gap Analysis Input comes from questions on how brands differ (nuances ignored) Brands considered as sets of attributes; totalities, interrelationships overlooked; also creations requiring a conceptual leap Analysis and mapping may be history by the time data are gathered and analyzed Acceptance of findings by persons turned off by mathematical calculations?