How Your Home Business Can Benefit From a Perceptual Map

Find the Sweet Spot of Product Positioning With a Perceptual Map

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One of the biggest headaches for marketers is deciding where a new product or service fits into the marketplace. In this article we will show how your business can benefit from using perceptual maps to decide where to position your product or service against those of the competitors.

Perceptual Map Example 1

How Your Home Business Can Benefit From a Perceptual Map
How Your Home Business Can Benefit From a Perceptual Map. (c) Dave Mcleod/Susan Ward 

In the above example, customer perceptions of price versus quality for three different brands are displayed on a graph, providing an excellent visual representation of how brands can be differentiated in the minds of consumers.

The data for perceptual maps comes from customer surveys of products or services––customers are typically asked to rate their views on various criteria such as:

  • Performance
  • Ease of use
  • Price
  • Reliability
  • Customer support

Survey results are compiled and plotted on a graph according to their scale values.

Types of Perceptual Maps

Aside from price versus quality, perceptual maps can be made for a variety of product/service attributes. For example:

  • Trucks - Towing capacity versus fuel consumption
  • Landscaping services - Appearance versus effect on the environment
  • Coffee - Price versus sustainability
  • Food/drink - Taste versus sugar or salt content
  • Hotels - Price versus location, amenities, etc.

3D perceptual maps can be used to incorporate an additional attribute.

How to Create a Perceptual Map Step by Step

As an example, let's say you think you have developed a winning recipe for a granola bar and wish to use perceptual mapping to help you decide where to position the product in the marketplace.

Step 1 - Decide which attributes are most important to the customer base.

In our example we have decided to use taste and nutritional value as the determinant attributes that are of highest importance to the consumer and will influence their purchasing decisions. (We could use others such as price, sugar/fat content levels, market share, potential allergens, etc.)

Step 2 - Determine the existing competition.

Compile a list of the competing products that will be included in your market survey and plotted on your perceptual map. Depending on the product a minimum of four or five competitors should be surveyed, preferably those with the largest market share.

Step 3 - Design and implement a market survey.

Develop a rating scale for the determinant attributes (in this case taste and nutrition) and distribute the survey to customers. A simple 1-5 rating works well––complex and time-consuming surveys are a turn off for most people.

How you conduct the survey depends on your situation. If you have an existing retail business it may be relatively easy to set up space for customers to take the survey. Otherwise, renting space for a booth in a mall or farmer's market may suffice. Other types of products or services may lend themselves to web or email-based survey methods.

Offer incentives to encourage consumers to participate. In this case, people love to try snack foods and having free samples of yours and your competitors' products will entice participation.

Remember that there are no shortcuts to proper market research––collecting quality data in your market surveys is key to producing accurate perceptual maps.

Step 4 - Using the data from the market research study, create your perceptual map.

There are a number of ways to plot the results of your survey data:

  • By hand using pen and paper (graph paper makes plotting easier)
  • Using a spreadsheet template if you are proficient with Excel or other spreadsheet software
  • Using online perceptual mapping tools

Step 5 - Using the map, decide where to position your product versus the competition.

Once you have your perceptual map, you will need to determine where to position your product versus the competition––preferably where there appears to be a gap in the marketplace.

In the example below, you may decide that a segment of the market would prefer to sacrifice a degree of taste for more nutrition. (On the other hand, there may be a reason why there is no competition in a particular area of the graph––that product space may be unappealing to consumers.)

Competing head to head with another brand is generally risky. However, price may enter into the decision. You may be able to take market share from a competing product that has the same or similar attribute rankings if you are able to set the price of your product sufficiently low enough.

Perceptual Map Example 2

How Your Home Business Can Benefit From a Perceptual Map
How Your Home Business Can Benefit From a Perceptual Map. Image (c) Dave Mcleod/Susan Ward

Perceptual Map Pitfalls

Perceptual maps can be excellent tools for businesses to determine how products are viewed by customers but it must be remembered that buyer's perception of various attributes such as taste, reliability, ease of use, etc. is subjective and can vary widely from person to person.

Use the following tips to increase the reliability of the data:

  • Make sure the attributes you choose are relevant to the consumer purchasing decisions.
  • Get as large a sample of the target market as possible.
  • Make the survey short, clear, concise, and without bias.

If the collected data set is insufficiently large or the questions are slanted in some fashion the resulting map is likely to be inaccurate and may invalidate any subsequent map-based decisions on product placement.

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