1. Positioning
Positioning
Perceptual Mapping
Preference Mapping 1

2. Product Positioning Using Perceptual & Preference Maps
Differentiation: Creation of tangible or intangible differences on one or two key dimensions between a focal product and its main competitors.
Positioning: Strategies to ensure that key differences between the focal product and its competitors occupy a distinct position in the minds of customers.
Mapping: Techniques (using customer-data) that enable managers to develop differentiation and positioning strategies by enabling them to visualize the competitive structure of their markets as perceived by their customers. 2

3. Generic Positioning Strategies
Our product is unique
(eg, Perdue chicken).
Our product is different
(eg, Listerine).
Our product is similar
(eg, Meisterbrau). 3

4. Positioning Statement
For [target segment], the [concept] is [most important claim] because [single most important support].
Example:
For PC users, the IOMEGA Zip drive is the best portable storage device because it is most cost-effective system. 3 4 4

5. Perceptual Mapping for Developing Positioning Strategies
Develop a visual representation of how target customers view the competing alternatives.
Mapping perceptions:
Attribute-ratings methods (particularly useful for functional products—used in the course MDPREF program).
Overall-similarity methods (particularly useful for image-oriented products).
Mapping preferences:
Modified attribute-rating methods (using MDPREF).
External analysis using PREFMAP-3 program. 5

6. Conventional Mapping— Two Products on a Snake Chart
Does not Describes it describe completely it at all
| | | | | |
1. Company provides adequate insurance coverage for my car.
2. Company will not cancel policy because of age, accident experience, or health problems.
3. Friendly and considerate.
4. Settles claims fairly.
5. Inefficient, hard to deal with.
6. Provides good advice about types and amounts of coverage to buy.
7. Too big to care about individual customers.
8. Explains things clearly.
9. Premium rates are lower than most companies.
10. Has personnel available for questions all over the country.
11. Will raise premiums because of age.
12. Takes a long time to settle a claim.
13. Very professional/modern.
14. Specialists in serving my local area.
15. Quick, reliable service, easily accessible.
16. A “good citizen” in community.
17. Has complete line of insurance products available.
18. Is widely known “name company”.
19. Is very aggressive, rapidly growing company.
20. Provides advice on how to avoid accidents. 6

7. 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

8. 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

9. 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

10. 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 A A15
Dell 320N
C1 TI Travelmate
Toshiba concept
• • •
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

11. Example Plot of Attributes of Laptops on a 2D Perceptual Map
Common
· Toshiba 1960CT
Easy setup
Slow
Performance
Light
Value
· IBM 701 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

12. Example Plot of Attributes of Laptops on a 2D Perceptual Map
(Plain)
Common
· Toshiba 1960CT
Easy setup
Slow
Performance
Light
Good Value
· IBM 701 C “Butterfly”
Elegant
Looks 9 12 9

13. 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

14. 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

15. 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

16. 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

17. 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
Special Occasions
Heineken
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

18. Interpreting Perceptual and Preference Maps
Technical adequacy
What percentage of variance in the raw data is captured in the map?
What percentage of the variance of each attribute is captured in the map?
Managerial interpretation
What underlying dimensions characterize how consumers view the products?
What is the competitive set associated with the new concept?
How well is the new concept positioned with respect to the existing brands?
Which attributes are related to each other?
Which attributes influence customer preferences positively? Negatively?
What improvements will enhance the value of the new concept?
Which customer segments have positive perceptions and high preference for the new concept? 14 18 14

19. Mapping Preferences
Objective—Introduce customer preferences into perceptual maps:
A simple ideal point method (MDPREF): Introduce an “ideal” brand as an additional stimulus evaluated by customers.
1. Combine attribute ratings of ideal brand with the other brands.
2. Compare how similar the ideal brand is to the other brands included in the study.
A simple vector method (MDPREF): Introduce “preferences” as an additional variable in the ratings data
1. Analyze the preference variable simultaneously with evaluations of the cars on each attribute.
Identify which attributes influence consumer preferences the most
Identify which brands are most preferred in the aggregate.
2. Analyze preferences separately for each customer.
Identify target segments that prefer the brand of interest the most 15 19 15

20. Mapping Preferences cont’d
PREFMAP-3 external unfolding
Develop a perceptual map of competing alternatives by other methods.
Given the fixed positions of the alternatives, map the preferences of customers on the same map (this approach is called external unfolding). 20

21. Ideal-Point Preference Model Vector Preference Model
Two Preference Models
Ideal-Point Preference Model
Vector Preference Model
Increasing Preference
Preference
Preference
Decreasing Preference
Ideal Point
Attribute
Attribute
(eg, sweetness)
(eg, service speed) 21

22. Interpreting Preference Models
(a) A is preferred twice as much as B. (dIB = 2dIA)
Ideal-Point Map
Ideal Point (I) A B
dIB
dIA
Vector Map
Preference Vector A
dAC
dAB C B
(b) A is preferred to B and B is preferred to C. With reference to A, C is preferred half as much as B. (dAC = 2dAB) 22

23. MDPREF Vector Method for Representing Aggregate Preferences
Matrix of inputs:
A1 A2 A3 A A15, PREF
Dell 320N
C1 TI Travelmate
Toshiba concept
• • •
Dell 320N
C2 TI Travelmate
Toshiba concept
Note: A higher number on PREF indicates higher preference for that brand.
Compute average ratings of each brand on each attribute and the average preferences for each brand.
Submit data to MDPREF to obtain a “joint space” map showing relationships between brands and their evaluations on each attribute.
Interpret the map. The relative locations of the brands are directly provided by the map. The orientation of the attributes (including preference) are determined by drawing vectors from the origin to each attribute. The positionf a brand on an attribute is determined by drawing a perpendiclar line from the brand location to the attribute orientation. 23

24. Example Input Data for MDPREF Vector Model
Input matrix has attributes on rows and objects on columns
B1 B2 B3 B3 B4 B5 B6 B7 B8 New
Attractive Light Unreliable Plain Battery life Screen Keyboard Roomy Easy service Expandability Setup Common Value Preference 18 24 18

25. Preference Map Using MDPREF Vector Model
Low battery life
Keyboard
Expandability
Toshiba
Elegant
Distinct
Unsuccessful
Avant-Garde
Heavy
IBM
Compaq
Fast operation
Reliable
Sanyo TI
Good design
AST Exec
Difficult to use
Dell
NEC
New Concept
Value
Graphics
Poor setup
Samsung
Screen quality
Preference 19 19 25

26. Data for PREFMAP-3 for Representing Individual Preferences
Matrix of inputs:
C1 C2 C3 C
Dell 320N
TI Travelmate
Toshiba Concept
• • •
An element of this matrix is the stated preference of each consumer (C1, C2, . . .) for each brand. A higher number indicates higher preference for that brand.
Submit data to PREFMAP-3 (in addition to perception data) to obtain a “joint space” map showing relationships between brands and preferences between brands for each consumer.
Interpret the map. The relative locations of the brands are directly provided by the map. The direction in which an individual consumer’s preferences are increasing is determined by drawing a vector from the origin to each consumer’s ID displayed on the map. The relative preference for a brand for an individual consumer is determined by drawing a perpendicular from the brand location to the preference orientation. Identify target segments by examining consumer groupings on the map. 26

27. Limitations of Preference Mapping
Provides a static model—ignores dynamics of customer perceptions.
Interpretation is sometimes difficult.
Does not incorporate cost or likelihood of being able to achieve a desired positioning.
Does not incorporate a “probability model” to indicate goodness of a map.
Generally, need about 6 to 8 products to make the technique useful. 20 27 21