Perceptual Mapping Using R

What is Perceptual Mapping?

Perceptual mapping is a diagrammatic technique used by asset marketers that attempts to
visually display the perceptions of customers or potential customers. Typically the position of a
company's product, product line, or brand is displayed relative to their competition. Perceptual
maps, also known as market maps, usually have two dimensions but can be multi-dimensional;
they can be used to identify gaps in the market and potential partners or merger targets as well as
to clarify perceptual problems with a company's product.
Uses of Perceptual Map:

Perceptual mapping enables companies to better understand their customers: the who, why,
where, how and what of their behavior. If a business is perceived in a manner they find
unsatisfactory, further research then identifies what can be done to change that. Perceptual
mapping also allows businesses to see what consumers think of other brands, particularly their
competitors. Regular uses of the maps can help track preferences, and see changes as they
happen. Perceptual mapping can help define market segments, showing clusters of businesses
differentiated by key aspects (such as higher class or number of restaurants). Within the clusters
found in perceptual maps of entire industries, a business can classify potential partners or
possible businesses to merge with, since the clustering of brands signifies the similarity in
businesses, meaning they have corresponding attributes. It can also help identify gaps in a market
where a new product or service could be introduced. Perceptual maps can also be used to help
keep track of how a new product, such as a recently introduced smartphone, is being viewed in a
specific market. It is important to see that the way a business is marketing its product is not only
successful, but successful in a manner that aligns with the businesss overarching goal for
positioning.

Some companies seem to have fallen out of favor with the public, such as Quicken Loans and
VW. Perceptual mapping can help elicit the extent of the damage.

Limitation of Perceptual Mapping:

There are many limitations to perceptual mapping. The largest is the number of variables used.
Traditionally, the map uses two variables and does not account for others. This assumption can
hinder the reliability of results, as in some cases, it is not safe to assume that there are only two
major factors influencing the decision of purchase for a consumer. For example, a graph may use
quality of food and pricing, but not take into account other relevant variables such as the number
of visits and locations. Also, there is often a blurred line between what a business can offer and
what a consumer thinks the business can offer. This could be due to miscommunication, lack of
knowledge, impact from social media, and so on. These untruths can influence the result,
creating a slight bias in the statistics. Another limitation is data gathering. The data needed to
form a perceptual map is usually obtained through surveys, and can be difficult to obtain. The
range of behaviors that the map covers is also a constraint, as the limitation to two variables
means that its application works mainly with purchase decisions made with little thought and
effort, such as purchasing a beverage at a store or going to a fast food restaurant.

How to Construct Perceptual Map

1. Determine which characteristics of the product are consumer hot buttons

This is going to be a function of your market, so the characteristics that consumers use to
determine which car to buy are entirely different from which doctor to use, where the criterion
might be reputation (high versus unknown) and location (near versus far). You cant guess on
this stuff, because if you have the wrong criteria, then the rest of your efforts would be wasted.
So ask your market what is important to them. You can do a survey or a focus group to find
those hot buttons that control consumer behavior. There are also ways to use a customer
relationship management system (CRM), if properly designed, to see what consumer hot buttons
are based on actual purchase behavior.

2. Survey your market

Once youve identified consumer hot buttons, you need to find out how consumers rate your
products, as well as how they rate your competitors. My preferred way of doing this is to have
consumers identify competing products, then rate them based on hot button criteria. Its also
good to get demographics, some geographic, and some psychographic information do see if there
might be some segmentation value ie. different segments generate different maps and you can
use this to reach the segments better with unique brands.

3. Graph results
Computer programs can make this a lot easier and if youve got more than 2 dimensions you
want to graph, computers are necessary. You can use Excel to do this, although there is
special software for perceptual mapping and you can buy SPSS, which is more expensive, but
can be used for lots of analysis projects. Regardless, the map should not only display the
position of various brands, but the size of the brand on the map should reflect its market share
(so youll need to gather this info from secondary sources).

4. Interpret the perceptual map

This step is where you get strategic value from the map. Here are some things to look for on
your map.

Do consumer attitudes toward my brand match what I want them to think about my
brand?

Do consumer attitudes toward my competitors match what I thought about them?

Who are the competitors consumers see as closest to my brand?

Are there holes in the map indicating potential for new brands?

5. Make changes in your marketing strategy

If consumers dont see your brand in a favorable way, you need to make changes. If theres
really something wrong with your brand leading to poor consumer attitudes, then fix your
brand. If not, changes to your advertising and promotional campaign are needed to help
moderate these attitudes.

If consumers view competitors as being very similar to your brand, think about how your brand
can stand out you really dont want to go head-to-head with competitors and price is the last
tool you should use to differentiate your brand. If there are holes you think represent viable
products that your company can produce, think about introducing a new brand or moving your
brand into the unfilled position.

Perceptual Mapping in R:

1. We need to install package "MASS"

R Code: Simple Data Visualization using biplots. We use USArrests data (inbuilt R dataset)
to see how it can be visualized in 2 dimensions. Below code will be used

> library("MASS")

> pc.cr <-princomp(USArrests, cor = TRUE)# scale data

> summary(pc.cr)

> biplot(pc.cr)
2. Below is the code and R output of a program:

setwd("C:/Users/spectre360/Desktop/R Data")
getwd()

# -- Read in Average Perceptions table -- #

mydata = read.table("per_map.txt", header = TRUE, na.rm = TRUE)
mydata = t(mydata) #transposing to ease analysis
as.numeric(mydata)
mydata #view the table read
# extract brand & attribute names #
brdnames = rownames(mydata)
attribnames = colnames(mydata)

pref = read.table("pref.txt", header = TRUE, na.rm = TRUE)

dim(pref) #check table dimensions
pref[1:10,] #view first 10 rowsr

## --- Build func to run simple perceptual maps --- ##

JSM <- function(inp1, prefs){

# inp1 = perception matrix with row and column headers

# brands in rows and attributes in columns
# prefs = preferences matrix

par(pty="s") # set square plotting region

fit = prcomp(inp1, scale.=TRUE) # extract prin compts

plot(fit$rotation[,1:2], # use only top 2 prinComps

type ="n",xlim=c(-1.5,1.5), ylim=c(-1.5,1.5), # plot parms
main ="Joint Space map - Home-brew on R") # plot title

abline(h=0); abline(v=0) # build horiz & vert axes

attribnames = colnames(inp1)
brdnames = rownames(inp1)

# <-- insert attrib vectors as arrows--

for (i1 in 1:nrow(fit$rotation)){
arrows(0,0, x1=fit$rotation[i1,1]*fit$sdev[1], y1=fit$rotation[i1,2]*fit$sdev[2], col="blue", lwd=1.5);
text(x=fit$rotation[i1,1]*fit$sdev[1],y=fit$rotation[i1,2]*fit$sdev[2], labels=attribnames[i1],col="blue",
cex=1.1)}

# <--- make co-ords within (-1,1) frame #

fit1=fit
fit1$x[,1]=fit$x[,1]/apply(abs(fit$x),2,sum)[1]
fit1$x[,2]=fit$x[,2]/apply(abs(fit$x),2,sum)[2]
points(x=fit1$x[,1], y=fit1$x[,2], pch=19, col="red")
text(x=fit1$x[,1], y=fit1$x[,2], labels=brdnames,col="black", cex=1.1)

# --- add preferences to map ---#

k1 = 2; #scale-down factor
pref=data.matrix(prefs)# make data compatible
pref1 = pref %*% fit1$x[,1:2]
for (i1 in 1:nrow(pref1)){segments(0,0, x1=pref1[i1,1]/k1,y1=pref1[i1,2]/k1, col="maroon2", lwd=1.25)}
}

JSM(mydata,pref)

Output:

> mydata #view the table read

[,1] [,2] [,3] [,4] [,5]
X "Largechoice" "Lowprices" "Servicequality" "Productquality" "Convenience"
OfficeStar "5.2" "2.1" "4.2" "3.7" "2.7"
PaperCo "4.4" "4.5" "2.3" "2.6" "1.4"
OfficeEquipment "3.9" "2.6" "3.1" "3.1" "4.7"

Supermarket "2.3" "4.1" "1.8" "2.9" "5.1"

> pref[1:10,] #view first 10 rowsr

V1 V2 V3 V4
1 5 3 3 1
2 4 3 4 2
3 4 2 3 2
4 5 3 5 3
5 2 5 3 2
6 4 3 2 2
7 3 3 4 2
8 1 2 3 5
9 2 4 4 3

10 2 5 4 3

Perceptual Map
NOTE: Please find the two text file and a r file with code.