An introductory guide to perceptual mapping

Post by Capsim
October 28, 2015

Marketing and Product professionals need to understand where their products and those of their competitors are positioned in the market. Whatever their product, one of the most effective tools for illustrating product position is the perceptual map.

The basics of perception mapping
Perceptual maps graphically show how a product serves customer’s needs or wants. Marketers rely on their own knowledge of an industry to create this map, as opposed to streams of data like market research. The aim is to create a diagram that can reflect the most idealized characteristics that consumers assign to products. This is vital to new product launches and revisions of existing products. By knowing where its competitor products are positioned, a company can discover an unoccupied product position and exploit that competitive advantage.

There are several primary factors as to why businesses utilize perceptual maps, including:

  • Different market segments have different preferences: No two segments are the same. It’s the job of the marketers to know the unique compositional makeup of each segment and how to best form strategies that play to those unique needs and desires.
  • Perception maps are more direct: When creating these maps, you can often plot using only two characteristics, which vary depending on the company. For instance, a soda manufacturer might chart based on sodas being high or low in caffeine and dark or light in color.
  • Find where your product fits in: Perceptual mapping is especially useful if a company employs the differentiation model as featured in Porter’s generic strategies. That approach is all about creating unique products, and a perceptual map is the best tool to help a company understand and cater to that segment.
  • Segment preferences change often: Events like marriage, new jobs, family planning and even location can change what consumers want. If created and updated frequently, perceptual maps help marketers understand customer movement and behavior. This lets companies deploy new strategies as spaces on the perceptual map open up.

A perceptual map in action
Perhaps the best way to understand how perceptual maps work is to see a real-world example. Take a look at the map below for vehicle extended warranties.

The Y-axis shows years a car is owned, while the X-axis indicates the miles a car has driven. By looking at the map itself, marketers were able to come across two primary clusters: the first in the five-year, 60,000-mile area, and a second near the seven-year, 100,000-mile area. That means because there’s a greater overall concentration in these two sections, it’s more than likely most customer interest in these year-mile positions. By identifying these two market segments, marketers can pass along this information as the appropriate departments develop subsequent warranty plans. Perceptual maps can also be used to identify where marketers less emphasis. For instance, by looking at the maps, they can see that only a few people need warranties that are under five years and 50,000 miles.

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