1. Marketing Tools for Marketing Managers (May 1998). Penn State University 1 Positioning G Positioning concept G Perceptual mapping G Preference mapping G Positioning the Infiniti G20 car

2. Marketing Tools for Marketing Managers (May 1998). Penn State University 2 Some Key Concepts G Differentiation: Creation of tangible or intangible differences on one or two key dimensions between a focal product and its main competitors. G Positioning: Strategies conceived by firms to ensure that the main differences between the focal product and its competitors occupy a distinct and important position in the minds of current and potential customers. G Mapping: Techniques (using customer-data) that enable managers to develop differentiation and positioning strategies by helping them to visualize the competitive structure of their markets as perceived by their customers. Example data include customer perceptions of existing products (and new concepts) along various attributes, perceptions of similarities between brands, preferences for the products, or measures of behavioral response of customers toward the products.

3. Marketing Tools for Marketing Managers (May 1998). Penn State University 3 Positioning Bases G Life style (self-concept) positioning G Attribute positioning G Benefit positioning G Competitive positioning G Time-based (e.g., usage occasion) positioning

4. Marketing Tools for Marketing Managers (May 1998). Penn State University 4 The Power of Visual Representation

5. Marketing Tools for Marketing Managers (May 1998). Penn State University 5 What Do You See?

6. Marketing Tools for Marketing Managers (May 1998). Penn State University 6 Can You See Patterns in This Data? Ratings of nine brands of notebook computers on several attributes B1B2B3B3B4B5B6B7B8New Attractive5.13.63.55.43.94.85.24.05.24.0 Light6.03.55.03.93.35.35.02.55.52.5 Unreliable3.44.14.52.14.52.74.53.72.53.8 Plain1.54.12.92.34.52.73.54.32.25.2 Battery life3.34.94.34.13.93.03.56.23.54.0 Screen3.55.33.46.45.45.23.36.03.34.8 Keyboard2.63.52.53.43.83.32.85.04.34.7 Roomy5.54.35.43.13.43.34.73.54.34.2 Easy service4.54.93.35.04.44.53.34.73.84.5 Expandability5.54.35.43.13.43.34.73.54.34.2 Setup5.63.55.65.42.54.25.23.35.82.5 Common4.13.53.32.94.04.32.24.23.34.2 Value3.54.84.43.63.62.73.24.73.54.0 Preference7.43.44.86.64.47.47.13.86.93.3

7. Marketing Tools for Marketing Managers (May 1998). Penn State University 7 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 not Describes itdescribe completelyit at all |||||| 012345 Conventional Mapping Using Snake Charts

8. Marketing Tools for Marketing Managers (May 1998). Penn State University 8 An Example 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.

9. Marketing Tools for Marketing Managers (May 1998). Penn State University 9 Uses of Mapping Techniques G Understand the underlying market structure of product categories as perceived by customers. This can help in identifying opportunities through “gaps” in the resulting maps. G Represent customers’ perceptions and preferences in a manner that aids communication and discussion within the product management team. G Evaluate a product (new concept) in the context of existing products in the market. G Explore strategic and tactical options to position new concepts. G Develop a (new) name for a product. G Check how perceptions of your products compare to those of your competitors.

10. Marketing Tools for Marketing Managers (May 1998). Penn State University 10 Uses of Mapping Techniques G Identify aspects of your products that are most favorable to you. G Determine exactly how much change is need on key product attributes to move your products to more favorable positions. G Visually determine whether your communications programs are having the desired impact on market perceptions. G Compare perceptions from different demographic, geographic, or psychographic subgroups in your market.

11. Marketing Tools for Marketing Managers (May 1998). Penn State University 11 Mapping Techniques G Mapping perceptions u Attribute-ratings methods (particularly useful for functional products) u Overall-similarity methods (particularly useful for image- oriented products) G Mapping preferences u Include an overall preference vector in a perceptual map u “External joint space” analysis to fit preferences of individuals on a common perceptual map

12. Marketing Tools for Marketing Managers (May 1998). Penn State University 12 Perceptual Maps Using Attribute Ratings G Select a set of PDA’s which are of interest to the target group of customers (including the new concept of interest). G Identify a set of key attributes on which these pda’s are evaluated by the target group (e.g., through focus groups). G Ensure that customers are familiar with the products of interest (e.g., through video presentation). G Have customers evaluate the products on the chosen set of attributes. Example: Positioning of a new pda concept Light...........................…Heavy (A1) Unreliable..............….............Reliable (A2) Small…...........................Large (A3) Poor Connectivity…………………...Good connectivity (A4) Poor value...........…............…Good value (A5)... Definitely would not buy......................….....Definitely would buy (Preference)

13. Marketing Tools for Marketing Managers (May 1998). Penn State University 13 C1 C2 G Generate a matrix of inputs for the analysis consisting of each customer’s (C1, C2,...) ratings of each brand on each of the attributes (A1, A2, A3,....) G Compute average ratings of each brand on each attribute. Submit data to a suitable perceptual mapping technique (e.g., Factor Analysis). G Interpret the underlying key dimensions of the map using the directions of the individual attributes. G Articulate the implications of how customers’ view the competing products and concepts. A1A2A3A4...............A15 Sharp 580063722 Pilot 500043415 New PDA36277. Sharp 5800 Pilot 5000 New PDA Perceptual Maps Using Attribute Ratings

14. Marketing Tools for Marketing Managers (May 1998). Penn State University 14 Screen quality Connectivity? Image ? Common Large Easy to use Successful Good Communication capabilities Newton 130    Sony PIC 2000 Example Plot of Attributes of PDAs on a 2-D Perceptual Map (Difficult to use) Poor Communication capabilities

15. Marketing Tools for Marketing Managers (May 1998). Penn State University 15 Perceptual Map Using MDPREF Vector Model

16. Marketing Tools for Marketing Managers (May 1998). Penn State University 16 G Attributes that are both relatively important and close to the horizontal (vertical) axis help you in articulating the meaning of the axis. Here, the two dimensions along which these customers seem to discriminate between the computers appear to be “Image” for the horizontal axis and “Connectivity” for the vertical axis. This interpretation can be based on attributes most correlated with the axes (Common, value, perceived success, etc. for the horizontal axis), and communication capabilities and connectivity for the vertical axis). G To position a PDA on each attribute, draw an imaginary perpendicular line from the location of that PDA onto that attribute. (These are shown by dashed lines on the map). Thus, Sony PIC 2000 is perceived to be easier to use than the Sharp 5800. Guidelines for Interpreting Perceptual Maps (cont.)

17. Marketing Tools for Marketing Managers (May 1998). Penn State University 17 Guidelines for Interpreting Perceptual Maps G The arrow indicates the direction in which that attribute is increasing (The attribute is decreasing in the direction opposite to the arrow). Thus, PDAs positioned farther and farther in the South-West direction are considered to offer “good value,” and those positioned in the North-East direction offer poor value. G 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 in helping you to interpret the map. Thus, “screen quality” and “expandability” are relatively more important than “economical” and “communication capabilities” in explaining how this group of customers discriminates between the PDAs.

18. Marketing Tools for Marketing Managers (May 1998). Penn State University 18 G Data Input G Submit data to a preference mapping technique, such as PREFMAP-3, to obtain an “external joint space” map showing relationships between brands and preferences for each brand for each customer. Preferences are recovered by the map while keeping all products at their locations as determined by the perceptual map. G Interpret the preference map. Explore alternative locations for the focal product by moving it to different points on the map. C1C2C3C4........ Sharp 58002393 Pilot 50007725 New PDA3835 ….. An entry in this matrix is the stated preference of each customer (C1, C2,...) for each brand. A larger number indicates higher preference for that brand. Preference Maps

19. Marketing Tools for Marketing Managers (May 1998). Penn State University 19 Preference Map (Showing only Preferences and Objects)

20. Marketing Tools for Marketing Managers (May 1998). Penn State University 20

21. Marketing Tools for Marketing Managers (May 1998). Penn State University 21 Interpreting Perceptual and Preference Maps G Technical adequacy u What percentage of the total information (variance) in the raw data is captured in the map? u What percentage of the information of each attribute (variance) is captured in the map? G Managerial interpretation (example questions) u What underlying dimensions seem to characterize how customers view the products? u What is the competitive set associated with the target product or new concept? u How well is a target product positioned with respect to the existing products? u Which attributes are related to each other? u Which attributes influence customer preferences positively? negatively? u What improvements will enhance the value of a product or new concept? u Which customer segments have positive perceptions and high preference for the product?

22. Marketing Tools for Marketing Managers (May 1998). Penn State University 22 Limitations G Provides a static model - ignores dynamics of customer perceptions. G Interpretation is sometimes difficult. G Does not incorporate cost or likelihood of being able to achieve a desired positioning. G Does not incorporate a “probability model” to indicate goodness of a map. G Generally, need about 6 to 8 products to make the technique useful.