Using Perceptual Mapping for Competitive Analysis
A perceptual map is used by market researchers to understand the views of customers about a brand or product. Because they are so helpful to know the positioning of a brand, they are also referred to as product positioning maps.
In the image above, we can see perceptual mapping being done for the automotive industry in the context of Northern America using the determinants of the cars as price and quality.
It’s important to pinpoint the markets where the perceptual mapping is being done as there might not be the same perception among people of different economies and cultures. For instance, in Nepal BMW would be at the highest point in terms of quality and price in terms of brand perception as companies such as Tesla and Lamborghini have not officially entered the market.
Why do Perceptual Mapping?
Perceptual Mapping is more of a result of a competitive analysis deeply done regarding all the major players in the market. Only after a detailed analysis can a perceptual map as one above be created. Rather than through lists and paragraphs, perceptual mapping helps to provide the analysis in one picture. A picture indeed is worth a thousand words.
Perceptual Mapping can help you to find your positioning in the market. It will help you figure out who your direct competitors are competing for the customers in your own target segment.
Can Ford consider Lamborghini as a competitor? Only somewhat but mostly not as the target segment served is different.
Rather, Ford Executives can look at the perceptual mapping and understand that they should probably keep a close eye on players such as Toyota and Volkswagen.
At the same time, if a new player wants to enter the market, they can work towards where they should position their brand in terms of quality and price perceptions to find the most “blue oceany” area that they can.
A new entrant can look at the perceptual map and say what if we position the brand that is regarded as superior in quality yet with an affordable price tag? That might be the differentiator that becomes the main tagline of the new entrant.
Perceptual Mapping can be especially helpful in deciding the kind of marketing strategy you choose to develop along with the kind of customer profiles that you are targeting. In this instance, it could be interested car buyers who are more into brand quality and utility rather than buying a car for the brand value that comes with it.
Only piloting the product would help to validate the hypothesis before a perfect fit is found for the company to move forward with. Once validated, the company can find its own unique place in the perceptual map too and make a ton of money(hopefully).
A perceptual map contains two determinant attributes which are basically the main variables that a customer tends to factor in when deciding to make a purchase. Price and Quality are some of the most widely used determinant attributes. However, these can differ as per the product. For instance, for a web browser, it may be speed and user experience.
Let’s take the example of creating a perceptual map by taking the determinant attributes as Price and Quality for the shoe market of Nepal. For the perceptual map below, the sample is only me but while doing a real perceptual map, there should be ample data collected from the targeted segment to make sure the perceptual map is accurate.
There’s a lot more you can do with Perceptual Mapping
You can think of a myriad of ideas on utilizing this concept. I created a perceptual map of all the works that I had done till now by putting two of my determinant attributes which were growth work and good pay. As per the quadrant they are in, they are rated as from Bad to Great. This was helpful in assessing if the current jobs I am doing match the expectations I have.
Yet, there is a lot more you can do with perceptual maps so start tinkering with them!
