Understanding Perceptions By Creating Perceptual Maps

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Understanding perceptual mapping Assumptions of perceptual maps The procedure for creating perceptual maps Interpreting perceptual maps So, What Are Perceptual Maps? Spatial representation in which customer perceptions for competitors’ brands are represented in a Euclidean space We are taking a very complex 3-D system and taking it down to a 2-D map When are Perceptual Maps Used? Can be used for finding space in customers’ minds - New product positioning decisions Existing product re-positioning decisions Check against managers’ views of market structure Identifying competitive set Image or reputation studies Harsh Gentle Expensive Cheap Advil St Joseph Baby Aspirin Excedrin Tylenol 4 Assumptions of Perceptual Maps Pair-wise distances between product alternatives directly indicate “perceived similarities†between any pair how close or how far apart are the products in customers’ MINDS A vector on the map (line & arrow) indicates BOTH magnitude and direction vectors denote underlying attributes 4 Assumptions of Perceptual Maps The axes of the maps are a special set of vectors suggesting underlying dimensions (or factors) that best characterize how customers differentiate between alternatives – they are just condensed vectors You can’t move directly into a good gap when repositioning Reliable Retro Retro & Reliable = Old Standard Classic Intuitive Understanding of Perceptual Mapping Suppose we have a set of ratings of airlines from customers on a set of attributes Convenience Punctuality Service Comfort Obtained using a 1 to 9 scale, where 1 = worst or lowest level of attribute and 9 = best or highest level of attribute AA 5.00 6.00 8.00 6.00 UA 8.00 5.00 7.00 6.00 US 3.00 5.00 5.00 4.00 C 3.00 4.00 4.00 4.00 SW 8.00 8.00 6.00 3.00 Intuitive Understanding of Perceptual Mapping Problem? Too many attributes Difficult if not impossible to understand how competitors stack up Can we (somehow) reduce number of attributes AND pictorially represent the options KEY: Without losing too much information Procedure for Creating Perceptual Maps 1. Identify products and attributes that are relevant 2. Obtain perceptions data 3. Select a perceptual mapping method (factor analysis) 4. Drawing the Map and Interpretation Step 1. Identifying Relevant Products and Attributes Attributes and products depend on objectives of the study Use focus groups (at least 4) to determine attributes and brands – 30 hours maximum Attributes will be feelings - not just Features Previous airline data example American, United, USAir, Continental, Southwest Convenience, Punctuality, Overall Service, Comfort Step 2. Obtain Perceptions Data Generally administered via surveys Keep segmentation in mind Important to get ratings from homogenous groups of customers Can group by demographics, behavior, psychographics, etc. Any method appropriate (all at once or one at a time) 100 minimum Airlines data - on a 1 to 9 scale (1 = worst, 9 = best or 1 = disagree, 9 = agree) Could use any odd-numbered scale Step 2. Obtain Perceptions Data Writing a 7 in the space provided means you agree with the statement and writing in a 1 means you disagree. Step 3. Perceptual Mapping Method In order to create a matrix of standardized scores - important to have the following form Attributes (Columns) Brands (Rows) Remember, the purpose of perceptual mapping? Data Reduction no significant loss of information Use Factor Analysis Step 3. Factor Analysis Methodology Systematically finds underlying patterns and inter-relationships among variables (attributes) using input (brands x attributes) matrix using the knowledge that attributes are correlated and the knowledge that correlated attributes have an underlying factor that can (usually) represent all of them without significant information loss Use SPSS Factor Analysis procedure – it will compress data Step 3. Factor Analysis Output Total Variance Explained How much of information (previously contained in MANY attributes) is explained by FEW factors? Remember, factors are the axes of the perceptual maps Important to see if 1-2 factors explain 60% or more of the variance Rotated Component Matrix (VARIMAX) Contains coordinates of attributes on perceptual map (with factors/components as axes) Also provides loading of attributes on individual factors Step 3. Factor Analysis Output First Page (in the SPSS data) contains coordinates for brands posted at the end of your original data in SPSS Step 4. Drawing The Perceptual Map Perceptual Map of Airlines -15...00 0.00 5......00 0.00 5....00 Attributes Brands AA UA C US SW Punctuality Convenience Service Comfort Step 4. Critical Outputs from Perceptual Maps 1. Name the axes (all 4 quadrants) 2. Competitive Clusters and Positioning 3. Order of brand preference 4. Locate good and bad gaps 5A. Make recommendations as to how to occupy good gaps Which attributes’ perceptions to improve and/or communicate? 5B. Specific position on the map that is to be achieved Which exact quadrant to move into and exact location on the map? Now You Do It (Or Walk Me Through It) Data on cars See handout Perceptual map of cars Preference Unreliable Poor Value Poorly Built Interesting Common Uncomfortable Sporty Easy Service Avant-garde Attractive Success Prestige Quiet Roomy Explain this map What does position of brands mean? Why are there vectors going to attributes? Why is preference vector bigger? Why not just use the preference data and forget the rest? Keep in mind this is PERCEPTION of our target market we surveyed Primary Attributes They are always the 3-5 attributes that are closest to the preference line. Can come from opposite direction. Well built – was poorly built in other direction. Successful Prestigious Quiet Comfortable – was uncomfortable in other direction. Name Axes Preference Unreliable Poor Value Poorly Built Interesting Common Uncomfortable Sporty Easy Service Avant-garde Attractive Success Prestige Quiet Roomy Made for Speed All in the Family Total Package Lemon Interpreting Output 1 – Name Axes Rules Cut each quadrant exactly in half with your X Make them short, catchy, and memorable Make them client and industry specific Try a phrase instead of a word Important to use only attributes NOT brands to name the quadrants Interpreting Output 2 – Competitive Clusters & Positioning Made for Speed All in the Family Total Package Lemon AMERICAN “MUSCLE†JAPANESE “PRINCES OF THE ROAD†EURO “STUCK-IN-THE MIDDLE†“EURO-LIKE†STATELY RIDES Interpreting Output 2 - Competitive Clusters Brands within clusters are direct competitors in customers’ minds Clusters are named in each quadrant Brands within clusters compete on similar attributes Interpreting Output 3: Order of Brand Preference Preference Interpreting Output 3: Order of Brand Preference Distance from the preference vector is irrelevant What matters is where the brand-projection falls ON the preference vector – brand lines must be drawn with a 90 degree angle where the line hits the preference line The farther a brand-projection falls ON the preference vector in the direction of increasing preference – the more preferred the brand And vice versa – farther on decreasing side of preference – the less preferred the brand Preference Gaps - Ovals & Space- Rectangle – Good Green Bad Red Bad Space Bad Space Good Space Good Space Interpreting Output 4: Gaps& Spaces Gaps – are the ovals that fall between brands on preference vector – make sure to look at brands that fall on both sides Spaces – are the rectangles on the map and are ALWAYS linked with a gap Good gaps/space – are where if a brand is anywhere in that space/rectangle when you draw the 90 degree line to the preference line you will fall in a preferred position in a good gap/oval Bad gaps/Bad space – as above only you will fall in a not preferred gap/oval Interpreting Output 5A - Repositioning to a Good Gap – Must Do! Choosing a good gap? Impact of size and feasibility Think of repositioning as involving 2 major steps 1. Must do – to start moving in the direction of the good gap- ALWAYS choose the 3-5 attributes CLOSEST to Preference line!!! 2. Choosing an exact location in a GOOD SPACE that makes sense based on data Must do to move in the direction of a good gap-Improve on primary attributes First Step Reposition Identify the 3-5 attributes closest to the Preference line These are your Primary Attributes – NO MATTER WHAT!! Make sure to check if a non-preffered attribute turned around is closer than ones on preferred side (Well Built & Comfortable) Interpreting Output 5A - Possible Repositioning to a Good Gap – Must Do! Preference Well Built Success Prestige Quiet All in the Family Total Package Lemon Comfortable Step 2 -Repositioning Exact Location on Map After the must do first step, step 2 involves choosing an exact location Choice of exact location Degree of competition near the space – which cluster? Existing positioning of the brand Once exact location is chosen, identify additional auxiliary/secondary attributes that your brand needs to improve on These are attributes that will move you in direction of new space ex: moving upward then you need to find vectors that are pointing up Preference Interpreting Output 4: Gaps and Space – Good and Bad ?? ?? Well Built Success Prestige Quiet Comfortable Interpreting Output 5C - Repositioning into a Good Gap + Space –Must Do &Auxiliary Attributes Preference Well Built Success Prestige Quiet Comfortable Avant-garde Easy Service Sporty X Review Outcomes We will be able to reposition by making customers aware that we have the Primary Attributes – Well Built, Successful, Prestigious, Quiet and Comfortable In order to move to our new space where we fall in the proper competitive cluster we must additionally highlight our Secondary Attributes – Sporty, Avant-garde & Easy Service Summary Perceptual maps reflect a succinct understanding of the competitive marketplace Need attributes and alternatives Need perceptions Need factor analysis with mapping software Interpreting perceptual mapping Writing a 7 in the space provided means you agree with the statement and writing in a 1 means you disagree.

Paper For Above instruction

Perceptual mapping is a powerful analytical tool used to visualize how customers perceive various brands or products within a competitive marketplace. It offers a spatial representation, typically in two dimensions, where each brand or product is positioned based on perceptions along specific attributes deemed relevant by consumers. Essentially, perceptual maps help marketers understand where their offerings stand relative to competitors and identify potential gaps or opportunities for repositioning or new product development.

Understanding and Assumptions of Perceptual Maps

Perceptual maps operate under several core assumptions. Firstly, the pairwise distances between products on the map are indicative of perceived similarities in customers' minds; brands positioned close together are perceived as similar, while those farther apart are viewed as different. Secondly, vectors—visual lines with arrows—represent both the magnitude and direction of attributes or perceptions, illustrating how brands or products relate to specific characteristics. Thirdly, the axes, or dimensions of the map, are derived as condensed vectors that encapsulate the underlying attributes that differentiate products. These axes are not arbitrary but are based on data analysis, often through techniques such as factor analysis. Finally, customers’ perceptions are assumed to be reliably depicted through the spatial relationships on the map, which can inform strategic positioning and repositioning efforts.

The Procedure for Creating Perceptual Maps

1. Identify relevant products and attributes: This initial step involves understanding the product categories and determining which attributes are most relevant to the target market. Using focus groups and qualitative research methods helps identify feelings and perceptions rather than just features. For example, in airline perception studies, attributes could include convenience, punctuality, service quality, and comfort.
2. Obtain perception data: Data collection typically occurs via surveys where customers rate brands on the selected attributes using scales such as 1 to 9. Ensuring data is drawn from homogeneous customer segments boosts reliability. Data points are plotted based on perceived performance; for example, an airline rated highly on punctuality and comfort will have high scores on those scales.
3. Select a mapping method (factor analysis): Since many attributes can lead to complex interpretations, factor analysis reduces the data into fewer, meaningful dimensions that explain most of the variance. This step involves analyzing the correlations among attributes and deriving underlying factors that represent these attributes collectively.
4. Draw and interpret the perceptual map: Using the results from factor analysis, a two-dimensional map is plotted. Brands are placed based on their perceived attribute scores, axes are named according to the underlying factors (e.g., "Price" vs. "Quality"), and clusters or competitors within the map emerge. Good and bad gaps are identified based on the distances between brands and the ideal position aligned with consumer preferences. Recommendations for repositioning involve moving brands toward better perceived positions by emphasizing or improving specific attributes.

Interpreting and Applying the Map: An Example of Airline Perception

Suppose a perceptual map of airlines reveals four quadrants labeled "Luxury", "Budget", "Economy", and "Premium". The axes might represent "Price" and "Service Quality". High-quality, expensive airlines cluster in one quadrant, while low-cost carriers cluster elsewhere. The map’s primary attributes—such as comfort, punctuality, and service—are assessed in relation to customer perceptions. For example, if an airline like US Airways is perceived as low on comfort and high on cost, repositioning efforts would focus on improving comfort or communicating value to move toward the "Economy" quadrant.

Brand preference lines plotted on the map show the most preferred brands. For instance, if Delta and American Airlines fall close to the ideal point but are perceived as expensive, strategies could involve adding value or reducing costs without sacrificing quality. The map also reveals gaps—areas with no brands—potentially indicating opportunities for new offerings or repositioning existing brands into these markets. Good gaps are accessible and align with customer needs, whereas bad gaps are either unfeasible or unlikely to attract customers.

Naming and Clustering of Attributes and Brands

Naming the axes involves selecting short, memorable phrases that accurately reflect the underlying dimensions, such as "Value" versus "Luxury" or "Price" versus "Quality". Clusters represent groups of brands perceived similarly; for example, "American Muscle" for high-performance vehicles or "Stately Rides" for luxury automobiles. These clusters help identify direct competitors and understand market positioning. For example, in the car industry, a cluster might include brands like BMW and Mercedes-Benz, while economy brands like Ford and Hyundai form another cluster.

Gap Analysis and Repositioning Strategies

Gaps along the preference vector are critical for strategic decision-making. Good gaps—areas with room for growth—are targeted for repositioning. To move a brand into a good gap, primary attributes—those closest to the ideal point—must be emphasized or improved. Secondary attributes, such as additional features, enhance the repositioning but are secondary in priority. For example, a mid-range hotel chain might need to improve its amenities or branding message to occupy a more desirable space on the map aligned with customer aspirations.

Conclusion

In sum, perceptual maps distill complex consumer perceptions into visual formats that inform competitive positioning and strategic planning. By understanding attribute dimensions, clusters, brand preferences, and gaps, managers can develop targeted strategies to enhance their market share and customer satisfaction. Mastery of perceptual mapping—via proper data collection, factor analysis, and interpretation—is vital in today’s highly competitive markets where perception often defines consumer choice.

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