How can you use perceptual mapping to analyze industry competition?

1 What is perceptual mapping?

Perceptual mapping is a technique that creates a graphical representation of the relative positions of different products or services in the market, based on how customers perceive them. Each product or service is plotted on a map with two or more axes, each representing an attribute or dimension that is important for customers. For example, you can use price and quality as two dimensions, and plot different brands of coffee on a map. The map shows how customers perceive the trade-off between price and quality, and how each brand compares to others.

2 Why use perceptual mapping?

Perceptual mapping can help you answer a variety of questions about your industry and competitive advantage, such as how customers perceive your products or services compared to competitors, what gaps or opportunities in the market you can fill or exploit, and how you can differentiate your products or services from competitors. It can also help you position your products or services to appeal to target segments and improve them to meet customer needs and expectations. Through perceptual mapping, you can gain a more comprehensive understanding of customer preferences, needs, and perceptions and use it to develop or adjust your marketing strategies.

3 How to create a perceptual map?

Creating a perceptual map involves identifying relevant attributes or dimensions, choosing two or more attributes to use as axes, plotting products or services and competitors' products or services on the map, and analyzing the map to draw insights. This data can be quantitative or qualitative, based on research, customer feedback, or industry reports. The two axes should be the most important factors for customers and independent of each other. For example, one could use price and quality or convenience and variety. Assigning scores or ratings to each product or service on each axis can be done through surveys, ratings, reviews, or other sources. Alternatively, one could use their own judgment or intuition to estimate the positions of each product or service. After plotting the data on the map, one should look for patterns, clusters, gaps, overlaps, or outliers and interpret what they mean for the industry and competitive position. It can also be used to identify target segments, unique selling propositions, strengths and weaknesses, opportunities and threats.

4 How to use perceptual mapping for strategy?

Perceptual mapping can be a useful tool when creating or improving your strategy. It can help you segment your market based on customer perceptions and preferences, differentiate your products or services from competitors, and reposition them in the market. You can use the map to identify different customer segments, create a distinctive identity and value proposition, evaluate your current position in the market, and monitor how it changes over time. With perceptual mapping, you can tailor your marketing mix to each segment, target them with specific messages, offers, or benefits, and adapt to changing customer perceptions or preferences.

5 Examples of perceptual mapping

Perceptual mapping can be applied to any industry, product, or service category, as long as you can identify the relevant attributes or dimensions for your market. For example, when mapping coffee, you can use price and quality as two dimensions and plot different brands of coffee on the map. This will show how customers perceive the trade-off between price and quality, and how each brand compares to others. It can also reveal gaps or opportunities in the market, such as a niche for a low-price, high-quality brand. Similarly, when mapping smartphones, features and design can be used as two dimensions to show how customers perceive the trade-off between features and design. For hotels, location and service can be used to plot different brands of hotels on the map. This will show how customers perceive the trade-off between location and service, as well as outliers or niches in the market.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?