Marketing Research Process 1. Formulate Problems 6. Research Report - Specify Research Objectives 2. Research Design 5. Data Analysis - Exploratory, - Interpretation Descriptive, Causal 3. Data Collection Method 4. Sample Design -Primary, secondary - Sampling frame, -Questionnaire Design sample selection, -Attitude Measurement sample size

Perceptual Mapping: Overview How do consumers evaluate products? What is a perceptual map? How to use perceptual maps? How to construct perceptual maps?

Product Evaluation What is the main difference between these two brands? Newspaper:1. SCMP2. Ming Pao Supermarket:1. ParkNShop2. Wellcome Car:1. Volvo2. Honda Transportation:1. MTR2. Taxi

Product Evaluation Only certain dimensions are keys in comparing products. Breakfast Snack: glazed donut, toast, muffin, etc. 1. Easy to Prepare 2. Sweetness Pain reliever: Tylenol, Advil, Dartil, etc. 1. Gentleness 2. Effectiveness Soft drink: Coke, Pepsi, 7up,Diet Coke, Diet 7-up. 1. Cola - noncola 2. Diet - nondiet

What is a Perceptual (Positioning) Map? Represent consumer perceptions and preferences spatially by means of a visual display. Axes represent underlying dimensions that respondents use to form perceptions and preferences of brands.

Ford Taurus Pontiac Grand Am Chevrolet Corsics Buick Century Toyota Camry Honda Accord Ford Thunderbird Ford Tempo

Perceptual Map: Soft drink Sprite 7 Up Coke Diet Coke Pepsi Diet Pepsi

Use of Perceptual Maps New product testing: perception of a product concept. –Test whether new product concept achieved intended positioning. –Example: breakfast concept intended to compete with donuts. New product development: directions for R& D efforts. –Needs information on “ideal point”, that is, what feasible point on the map represents ideal combination of attributes for different customer groups. –Example: Pain reliever, children’s Tylenol.

New Product Testing: Breakfast Easy to Prepare Glazed Donut Corn Muffin and Butter Jelly Donut Coffee New Cake Concept Sweetness Toast, tart Butter Toast & Jelly

Example: Pain Reliever Competing brands: Tylenol, Extra Strength Tylenol, Datril, Generic acetaminophen, Bufferin, Advil Three main segments: 1. Kids < 5 years old; – 40 years old; – 80 years old. Ideal points: ideal combination for consumers. Brand Choice: A consumer chooses the product closest to her ideal point Question: a. which brands should do best in sales? b. any opportunities for new products?

Pain Relievers Gentleness Effectiveness Tylenol Extra-strength Tylenol Advil Dartil Age: <10 Use: fever Age: >60 Use: arthritis Age: 20 ~ 40 Use: Aches

How to construct perceptual map? Method one: attribute-based ratings. Step 1: Identify list of attributes, and obtain ratings on each attribute. Step 2: Use factor analysis to identify key attributes and calculate ratings on key attributes. Use: industrial products, and consumer products with explicit attributes like computers, cars and mobile phone. Method two: similarity-based ratings. Step 1: measure similarity between pairs of brands. Step 2: use Multi-dimensional Scaling (MDS) to identify key attributes and computer ratings on key attributes. Used for consumer products without explicit attributes such as perfume, shampoo, beer,

Perceptual Mapping: Summary Consumers evaluate products based on key attributes. Perceptual map represents consumers’ quality perception on a spatial map. Perceptual maps can be productively used to test new products and identify opportunity for new products. Perceptual maps are constructed with factor analysis or multi-dimensional scaling.