Competitive Perceptual Positioning

Perceptual Mapping

Perceptual mapping is a graphic display explaining the perceptions of customers with relation to product characteristics.

Learning Objectives

Evaluate the concept of perceptual mapping as part of competitive perceptual positioning

Key Takeaways

Key Points

  • Perceptual maps help marketers understand where the consumer ranks their company in terms of characteristics and in comparison to competing companies.
  • Perceptual maps can display consumers’ ideal points that reflect their ideal combinations of product characteristics.
  • When creating a new product, a company should look for a space that is currently unoccupied by competitors and that has a high concentration of consumer desire (ideal points).
  • A perceptual map is usually based more on a marketer’s knowledge of an industry than market research.

Key Terms

  • demand void: Areas without any significant consumer desires; typically found in ideal point maps of perceptual mapping.
  • price elasticity: The measurement of how changing one economic variable affects others. For example:”If I lower the price of my product, how much more will I sell? “”If I raise the price, how much less will I sell? “”If we learn that a resource is becoming scarce, will people scramble to acquire it? “

Perceptual Mapping

Perceptual mapping is a diagrammatic technique used by marketers in an attempt to visually display the perceptions of customers or potential customers. Typically the position of a product, product line, brand, or company is displayed relative to their competition. Some perceptual maps use different size circles to indicate the sales volume or market share of the various competing products.

Perceptual Map Of Competing Products

Perceptual maps commonly have two dimensions even though they are capable of having several. For example, in this perceptual map you can see consumer perceptions of various automobiles on the two dimensions of sportiness/conservative and classy/affordable. This sample of consumers felt that Porsche cars were the sportiest and classiest of the ones in the study. They felt that Plymouth cars were the most practical and conservative. Cars that are positioned close to each other were seen as similar on the relevant dimensions by the consumer. For example, consumers saw Buick, Chrysler, and Oldsmobile as similar. They are close competitors and form a competitive grouping. A company considering the introduction of a new model will look for an area on the map free from competitors.

A perceptual map that shows car manufacturers based on conservative, classy distinctive, sporty, and practical affordable.

Perceptual Mapping: Perceptual mapping ranks companies based on customers’ perceptions of certain characteristics.

Perceptual Map Of a Consumer’s Ideal

Many perceptual maps also display consumers’ ideal points. These points reflect ideal combinations of the two product characteristics as seen by a consumer. This diagram shows a study of consumers’ ideal points in the alcohol product space. Each dot represents one respondent’s ideal combination of the two dimensions. Areas where there is a cluster of ideal points (such as A) indicates a market segment. Areas without ideal points are sometimes referred to as demand voids.

An ideal points map for the alcoholic beverage industry based on quaintness, social appeal, status, and individuality.

Ideal Points Maps: Ideal points maps reflect ideal combinations of two product characteristics as seen by a consumer. Marketers are able to accurately target their message to consumers based on consumer desires.

Combining the Competing Products and Ideal Points Maps

A company considering introducing a new product will look for areas with a high density of ideal points. They will also look for areas without competitive rivals. This is best done by placing both the ideal points and the competing products on the same map. This map displays various aspirin products as seen on the dimensions of effectiveness and gentleness. It also shows two ideal vectors. This study indicates that there is one segment that is more concerned with effectiveness than harshness, and another segment that is more interested in gentleness than strength.

A combination map of competing products and ideal points. It compares pain medications based on whether they are more or less effective and more or less gentle.

Combination Map: A combination map allows companies to find a space that has unmet consumer desires.

Intuitive Maps

Perceptual maps need not come from a detailed study. There are also intuitive maps (also called judgmental maps or consensus maps) that are created by marketers based on their understanding of their industry. The value of this type of map is questionable, as they often just give the appearance of credibility to management’s preconceptions. When detailed marketing research studies are done, methodological problems can arise, but at least the information is coming directly from the consumer. There is an assortment of statistical procedures (preference regression, multi-dimensional scaling) that can be used to convert the raw data collected in a survey into a perceptual map.

Some techniques are constructed from perceived differences between products, others are constructed from perceived similarities. Still others are constructed from cross price elasticity of demand data from electronic scanners.

Positioning Bases

By using customer research and perceptual mapping, a marketer can create a positioning statement using one of the three main bases.

Learning Objectives

Examine positioning and the strategy behind it relative to competitive perceptual positioning

Key Takeaways

Key Points

  • Functional Positions deal with solving a problem, providing benefits and getting a favorable perception from investors, stockholders and consumers.
  • Symbolic Positions deal with self- image enhancement, ego identification, belongingness, social meaningfulness and affective fulfillment.
  • Experiential Positions deal with providing sensory or cognitive stimulation.
  • By using customer research and perceptual mapping, a marketer can create a positioning statement using one of the three main bases.

Key Terms

  • Experiential: Of, related to, encountered in, or derived from experience
  • positioning: The act of positioning; placement.
  • perceptual mapping: Perceptual mapping is a diagrammatic technique used by asset marketers that attempts to visually display the perceptions of customers or potential customers.

Introduction

When a company presents a product or service in a way that is differentiating from the competition, they are said to be “positioning” it. Positioning relates to a process used by marketers to create an image in the minds of a target market. While positioning used to focus on consumer positioning, it now focuses more on competitive positioning.

The Positioning Concepts

There are three basic concepts for positioning:

  1. Functional Positions deal with solving a problem, providing benefits and getting a favorable perception from investors, stockholders and consumers.
  2. Symbolic Positions deal with self-image enhancement, ego identification, belongingness, social meaningfulness and affective fulfillment.
  3. Experiential Positions deal with providing sensory or cognitive stimulation.

Positioning is facilitated by perceptual mapping to determine the ideal points of consumers.This helps to determine if positioning should be functional, symbolic, or experiential. Strong positioning will enable a single product to appeal to different customers for different reasons. For example, two people are interested in buying a new car; one wants a car that is powerful and stylish while the other buyer is looking for a car that is reliable and safe and yet they buy the same exact car. One purchase solved a problem and exemplifies functional positioning while the other purchase is an example of symbolic and/or experiential positioning.

The Positioning Statement and Strategy

By using customer research and perceptual mapping, a marketer can create a positioning statement using one of the three main bases.

A positioning statement explains the target market for the product, the benefit of the product, and how the product is different than the competitors.

When creating a positioning statement, it is important to determine a pain point of the customer. Customers often buy on a want, rather than a need, impulse. By talking to a customer’s pain point, it is often possible to address the need impulse and the want impulse at the same time. If both of these issues can be addressed then it is easier to overcome objections regarding a product.

A woman stands on a stage and discusses a PowerPoint slide that breaks down customers wants and needs.

Wants versus Needs: What consumers want may not be what they need, but it is important to understand both.

A company can create brand positioning strategies or product positioning strategies. It is important to understand the strengths and weaknesses of both the organization and the competition when creating a positioning strategy.

Repositioning

Repositioning involves changing the identity of a product relative to competing products.

Learning Objectives

Indicate the characteristics and application of a re-positioning as it applies to competitive perceptual positioning

Key Takeaways

Key Points

  • When a company initiates a re-positioning strategy, it needs to change the expectations of stakeholders, including employees, stockholders, and financial backers.
  • A company may need to consider a re-positioning strategy if they have a weak brand, if they have not remained competitive in the market, or if there is a change in the economy.
  • A company may re-position a specific product line, a brand, or the entire organization.

Key Terms

  • repositioning: Changing the identity of a product or a company in the minds of stakeholders and competitors.

Repositioning involves changing the identity of a product relative to competing products. Many famous companies have saved failing products by repositioning them in the market. When a company initiates a repositioning strategy, it needs to change the expectations of stakeholders, including employees, stockholders, and financial backers.

An Image of the sign for the Apple Campus reading "1 Infinite Loop"

Apple Inc.: Apple Inc. is an example of a company that achieved re-positioning

Brand Identity

Brand identity is often involved with the success or failure of a product. A company that has achieved brand recognition can often survive the challenge of new entrants in a market. The problem with being at the top of the market, however, is that someone is always trying to knock you off. Companies that have become complacent with brand strategies sometimes find themselves knocked off their pedestal by a competitor.

Lack of a Strong Brand

Some companies lack a strong product or brand. They perform well in the market, but not exceptionally. Any changes in the market can force these companies from maintaining business to failing.

Economic Volatility

A severe change in the economy can affect a company or a brand. The hospitality industry saw this when the United States went through a recent financial crisis. Many upscale hotels and restaurants suffered because people couldn’t afford the prices.

There are Different Levels of Repositioning

An organization can reposition a product line, a brand, or an entire company. Determining which type of repositioning is needed isn’t always easy; it is important to understand the changes in the current market and how competitors will react to the change. If a change is volatile and is unprecedented, there may not be enough information available to use to make a decision. Understanding the strengths and weaknesses of a company can help determine when repositioning may be necessary and how the change should occur. When Apple switched their focus to iPod and its successors, for example, the company was able to change its financial situation and achieve success. The complete dedication of stakeholders and the creation of a product that is in demand can help companies survive a repositioning strategy.