POSITIONING AND PERCEPTUAL MAPS
To truly understand marketing, a little psychology is in order. In fact, there is a whole segment of marketing studied under the title "Consumer Behavior." But we digress...
Unless we are marketing a completely new product, unlike anything anyone has ever thought about or seen - a rare occurrence, indeed - consumers already have some preconceived notions about whatever it is you are trying to sell them. Every consumer already has a perceptual map of sorts in his mind. Think about any product, and you naturally think about some of its characteristics. Some examples:
+ a McDonalds hamburger - cheap, not very healthy, greasy, fast
+ BMW - expensive, fast, powerful, handles well
+ Southwest Airlines - fun, inexpensive, fast, efficient
And so forth. Every one of the characteristics cited above can be thought of as lying somewhere on a horizontal line, somewhere between two extremes - or somewhere along a "dimension." Let's look at this graphically, using the easiest of all examples: price.
+ ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- +
free | inexpensive | moderate | somewhat expensive | expensive
Consider a product that has yet to be branded... (really NOT many left...) - electricity. Further, suppose you can select your electricity provider (as you can in California, for example). There is no difference between the electricity provided by one vendor and that provided by another save one single characteristic - price (since everything comes in off the same network, there are no differences in reliability). If we were to present a consumer with several providers of electricity, then, there would be only one way in which he could rank them - from least to most expensive - and he would most likely select the least expensive provider (unless he was a shareholder in one of the other utilities or had some other vested interest).
If we could slice open this consumer's brain and extract the small and insignificant segment of his mind used to think about electricity, we would find a perceptual map with one single dimension, just as the one I had created above. This map symbolizes the way that the consumer thinks about electricity. Corresponding to some of the characteristics along the price dimension, we would find the names of electricity providers, as follows -
The consumer has positioned each one of the utilities providing electricity in the only way that he can - using the price dimension. This is the only way that the consumer can differentiate between the different providers of electricity. "Utility A," therefore, is positioned in his mind as being cheap, while "C" is inexpensive and "B" is moderately priced.
What could we do, then, as marketers of electricity, to entice this consumer to switch providers? Sadly, unless we could introduce some new dimension into the mix, the only tool at our disposal is price. It is not surprising, then, that all of the utilities are "bunched" together - this means that they are very similar on this dimension. They are all positioned as relatively inexpensive. On a perceptual map, whenever products are close together, they are positioned in the consumer's mind as being very similar. It is important to note that, in reality, the products could be quite different - but they are positioned similarly. This is what is important to us as marketers.
In an ideal world, we could position our product on a one-on-one basis, based on the perceptions of every single consumer in the world. In reality, however, we typically can't - therefore, we draw up perceptual maps based on the target market segment we are trying to sell to. In effect, we average out the positioning across all relevant consumers. This provides us with some sense of how the products on the market are positioned in these consumers' minds.
Obviously, with price as the only relevant dimension there is little we can do to position our product - electricity - except play with the product's price. So, let's make this more interesting and add a second dimension. The second dimension in a perceptual map is orthogonal to the first - just like an 'X' and 'Y' axis are in algebra. Suppose that each of the three utilities above can now run individual lines to the consumer's home - they can now differentiate based not only on price, but also on reliability, or "uptime" - a characteristic that defines the percentage of time that we have electricity flowing. In the perceptual map that follows, I have added the dimension of reliability along the 'Y' axis -
The first dimension we had considered, price, is on the horizontal, or 'X' axis. Note that the positioning of the three providers along the dimension of price has remained identical to the one-dimensional perceptual map I had drawn above. 'A' is less expensive than 'C,' while 'C' is less expensive than 'B.'
The new dimension is reliability. The provider can be unreliable, or he can be very reliable - or he can fall anywhere in between these two extremes. On the map above, 'B' turns out to be positioned as most reliable - while 'C' is least reliable. 'A' is middle-of-the-road.
It is important to note that positioning does not necessarily correspond with performance - for example, utility 'B' may be advertising massively, in an attempt to position itself as the most reliable provider - although in reality it may not be significantly more reliable than either 'A' or 'C.' The perceptual map provides a picture of how the consumer thinks about the products in a specific category, and this may very well be different than what a scientific analysis of the characteristics of the products would yield.
As a marketer considering entry into this market - or as a marketer of one of the three existing utilities - I could now use the perceptual map to identify potential strategies. For example, it is clear that if I could position a utility as more reliable than 'B' but less expensive than 'C' I'd have a clear winner on my hands (a further analysis should clarify whether such a strategy would actually be profitable).
A graphical representation of a perceptual map is limited by our ability to render dimensions on paper (or on the screen) - we could add a third dimension to the above map, but we couldn't add any more. Sometimes, a fourth dimension can be discerned off of a three dimensional map by virtue of the clustering of some of the products. But typically, if you can't boil your map down to two or three dimensions, it's probably because you have yet to identify the most critical ones.
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