8.1 Perceptual Map

The Research & Development Department can use the Perceptual Map exercise to plan revision and invention projects that meet customers' shifting size and performance expectations. The Marketing Department can use the results during forecasting as they compare competing products and when determining prices (in general, better positioned products can command higher prices).

Each segment has a set of circles. The inner fine cut circles have a radius of 2.5 units. They represent the heart of the segments where demand is strong. In addition, each inner circle has an ideal spot, a location where demand is strongest. The larger outer rough cut circles have a radius of 4.0 units. They represent the outer fringe of the segments, where demand is weakest (see Figure 5.1 ).

8.1.1 Segment Centers and Segment Drift

Table 8.1 shows the yearly drift rates for each segment.

Table 8.1 Segment Circle Drift Rates: Every year, customers demand increased performance and decreased size.

For example, the center of the Traditional segment ends Round 0 (that is, the year before the start of the simulation) with a performance of 5.0 and a size of 15.0. To these coordinates, add the performance coordinate drift rate of +0.7 (customers want better performing products) and subtract the size coordinate drift rate of -0.7 (customers want smaller products). The result, at the end of Round 1 the center of the Traditional segment will have a performance of 5.7 and a size of 14.3.

The center of the High End segment ends Round 0 (last year) with a performance of 7.5 and a size of 12.5. The High End performance drift rate is +0.9 and the size drift rate is -0.9. At the end of Round 1, the center of the High End segment will have a performance of 8.4 and a size of 11.6 (7.5 + 0.9 = 8.4 and 12.5 - 0.9 = 11.6).

Each year, the segments drift the length of the hypotenuse of the triangle formed by cus­tomers desire for smaller and faster sensors. For example, in the Low End segment, size decreases and performance increases by 0.5 units, moving the segment center 0.7 units across the map.

In the Low End segment, size decreases and performance increases by 0.5 units, moving the segment center 0.7 units across the map.

The segment center locations at the end of each round display in Table 8.2.

Table 8.2 Segment Centers at the End of Each Round: Note the drift rates vary for each segment. For example, the Performance segment is more interested in improved performance than decreased size and the Size segment is more interested in decreased size than improved performance.

Tip: The information in Table 8.2 reflects the segment centers at the end of the round. Therefore, the Round 0 positions can be seen as the Round 1 starting positions, Round 2 positions can be seen as the Round 3 starting position, etc. Each month during the simulation year, the segment drifts 1/12th of the distance from the starting position to the ending position.

On Form 1, for each segment, use the information in Table 8.2 and mark the location of each segment center for Round 0 and for Round 8. Next, draw a fine cut circle with a radius of 2.5 units around each Round 8 segment center.

On Form 1, draw a line connecting the Round 0 High End center with the Round 8 High End center. Draw a line connecting the Round 0 Performance center with the Round 8 Performance center. Draw a line connecting the Round 0 Size center with the Round 8 Size center.

Form 1: Segment Drift

8.1.2 Ideal Spots

Customer positioning preferences are reported in the Segment Analyses of The Capstone® Courier. Within each analysis, the Buying Criteria box displays the ideal performance and size as of December 31 of the previous year. This ideal position is also called the ideal spot. If all other criteria are equal, a customer will prefer a product that is located nearer the ideal spot over a product that is located farther from it.

Some segments place a higher level of importance on positioning than others (see 2.2.3 Criteria By Segment). For example, positioning is the most important buying criteria for High End customers, but it is less important to Traditional and Low End customers.

Within each segment, the ideal spot is at a location relative to the center of the circle. These locations display in Table 8.3 and are illustrated in Figures 5.2 through 5.6.

For example, High End customers prefer products that have a performance that is 1.4 units bigger and a size that is 1.4 units smaller than the center of the segment circle. The center of the High End segment at the end of Round 1 has a performance of 8.4 and a size of 11.6. Therefore, the High End ideal spot at the end of Round 1 has a performance of 9.8 (8.4 + 1.4 = 9.8) and a size of 10.2 (11.6 - 1.4 = 10.2).

Table 8.3 Ideal Spot Offsets: Customers prefer products located this distance from the center of the segment circle.

Use Table 8.2 and Table 8.3 , to determine each segment's ideal spot for Rounds 2 through 8. Enter the results in Form 2.

On Form 1, mark the Round 8 ideal spot for each segment.

Form 2: Segment Ideal Spot Locations