Positioning–1

Positioning

Positioning

Perceptual Mapping

Preference Mapping

Positioning–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.

Positioning–3

Generic Positioning Strategies

Our product is unique

(eg, Perdue chicken).

Our product is different

(eg, Listerine).

Our product is similar

(eg, Meisterbrau).

Positioning–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.

Positioning–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.

Positioning–6

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.

Does notDescribes it describecompletely it at all| | | | | |0 1 2 3 4 5

Conventional Mapping—Two Products on a Snake Chart

Positioning–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.

Mapping Methods in Marketing

Perceptual Maps Preference MapsJoint Space Maps

(includes both perception & preference)

Similarity-based methods

Attribute-based methods

Ideal-point model(unfolding model)

Vector model

External analysisusing PREFMAP-3

Simple “joint space maps” using modified perceptual mapping methods

Positioning–8

Positioning–9

Perceptual MapsUsing 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)

Positioning–10

Perceptual MapsUsing 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 ............... A15Dell 320N 6 3 7 2 2

C1 TI Travelmate 4 3 4 1 5Toshiba 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.

Positioning–11

C“Butterfly”

Slow

Looks

Performance

Easy setup

LightValue

Common

Elegant

Example Plot of Attributes of Laptops on a 2D Perceptual Map

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.

Toshiba 1960CT

Positioning–12

C“Butterfly”

Slow Easy setup

Light

Common

Elegant

(Plain)

Example Plot of Attributes of Laptops on a 2D Perceptual Map

Looks

Performance

GoodValue

Toshiba 1960CT

Positioning–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.

Positioning–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).

Positioning–15

Perceptual Map of Beer Market (This slide shows only the products)

•

Meister Brau

Stroh’s

•

•

•

Beck’s

• Heineken

Old Milwaukee

•

Miller •

Coors•

Michelob•

Miller Lite

• Coors Light•

OldMilwaukee Light

•

Budweiser

Positioning–16

Perceptual Map of Beer Market cont’d (This slide shows only the attributes)

Popular with MenHeavy

Special Occasions

Dining Out Premium

Popular with

Women

Light

Pale Color

On a Budget

Good ValueBlue Collar

Full Bodied

PremiumBudget

Light

Heavy

Less Filling

Positioning–17

Perceptual Map of Beer Market cont’d (This slide shows both products & attributes)

Popular with MenHeavy

Special Occasions

Dining Out Premium

Popular with

Women

Light

Pale Color

On a Budget

Good ValueBlue Collar

Full Bodied

PremiumBudget

Light

Heavy

•

Meister Brau

Stroh’s

•

•

•

Beck’s

• Heineken

Old Milwaukee

•

Miller •

Coors•

Michelob•

Miller Lite

• Coors Light•

OldMilwaukee Light

•

Budweiser

Less Filling

Positioning–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?

Positioning–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

Positioning–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).

Positioning–21

Two Preference Models

Attribute Attribute

Preference Preference

Ideal-Point Preference Model Vector Preference Model

Ideal Point

IncreasingPreference

DecreasingPreference

(eg, sweetness) (eg, service speed)

Positioning–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

(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)

Preference Vector

A

C

dAB

dAC

B

Positioning–23

MDPREF Vector Method for Representing Aggregate Preferences

Matrix of inputs:

A1 A2 A3 A4 ............... A15, PREFDell 320N 4 3 4 1 2 2

C1 TI Travelmate 6 3 7 2 8 8Toshiba concept 3 6 2 7 6 6 •

• •

Dell 320N C2 TI Travelmate

Toshiba conceptNote: 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.

Positioning–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 5.1 3.6 3.5 5.4 3.9 4.8 5.2 4.0 5.2 4.0Light 6.0 3.5 5.0 3.9 3.3 5.3 5.0 2.5 5.5 2.5Unreliable 3.4 4.1 4.5 2.1 4.5 2.7 4.5 3.7 2.5 3.8Plain 1.5 4.1 2.9 2.3 4.5 2.7 3.5 4.3 2.2 5.2Battery life 3.3 4.9 4.3 4.1 3.9 3.0 3.5 6.2 3.5 4.0Screen 3.5 5.3 3.4 6.4 5.4 5.2 3.3 6.0 3.3 4.8Keyboard 2.6 3.5 2.5 3.4 3.8 3.3 2.8 5.0 4.3 4.7Roomy 5.5 4.3 5.4 3.1 3.4 3.3 4.7 3.5 4.3 4.2Easy service 4.5 4.9 3.3 5.0 4.4 4.5 3.3 4.7 3.8 4.5Expandability 5.5 4.3 5.4 3.1 3.4 3.3 4.7 3.5 4.3 4.2Setup 5.6 3.5 5.6 5.4 2.5 4.2 5.2 3.3 5.8 2.5Common 4.1 3.5 3.3 2.9 4.0 4.3 2.2 4.2 3.3 4.2Value 3.5 4.8 4.4 3.6 3.6 2.7 3.2 4.7 3.5 4.0Preference 7.4 3.4 4.8 6.6 4.4 7.4 7.1 3.8 6.9 3.3

Positioning–25

• Preference

Preference Map Using MDPREF Vector Model

Low battery life

• New Concept

• Toshiba

Unsuccessful

Heavy

Reliable • IBM• Compaq

Keyboard

ExpandabilityElegantDistinctAvant-Garde

Fast operation• Sanyo

• Good design• TI• Dell

• AST Exec

ValueGraphics

Screen quality

• NEC

• SamsungPoor setup

Difficult to use

Positioning–26

Matrix of inputs:

C1 C2 C3 C4 ...............Dell 320N 2 3 9 3

TI Travelmate 7 7 2 5Toshiba Concept 3 8 3 5 • •

• 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.

Data for PREFMAP-3 for Representing Individual Preferences

Positioning–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.