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1. Toolbox Presentation #4:
Multidimensional Scaling
and OS Perceptual Maps
Diana Laboy-Rush
Laboy-
October 25 2006
25,
EMGT 510

2. Agenda
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 Why use Multidimensional Scaling (MDS)
and Overall Similarity (OS) Perceptual Maps
 What is MDS?
 Background and History
 Tips for Implementation
 Things to Consider
 Example Application

3. Challenges with AR Perceptual
Maps
Maps
 Users have difficulty scoring attributes, even
when they are aware of them
 Purchase d i i
P h decisions are sometimes made using
ti d i
implicit attributes, that are not easily identified
 Absence of phantom attributes as map
dimensions distort analysis
 AR views products as bundles of attributes,
attributes
which need to be complete in order to be
effective

4. What is Multidimensional Scaling?
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 Goal – to determine GAPs in the market based on
consumer / purchaser’s perception.
 Data
D t analysis methodology f mapping
l i th d l for i
similarities and dissimilarities among items
 Used in Market Research to map consumer
perceptions of products to draw out attributes
not otherwise easily communicated
 Analysis often graphically represented in order
to identify gaps in the market

5. Background and History
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 1938 - Pioneered by Young & Householder
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 1958 – Psychometrician Torgerson revived with the
earliest application in market research
 C
Consumer perceptions of silverware patterns
ti f il tt
 1969 – Stefflre was the first to use systematically, focused
on visual representation of consumer’s perceptions of
consumer s
brand similarities –developed “Tinkertoys”
 1975 – Green discussed the issues surrounding new
product development
 1983 – present : Numerous developments in methodology
and applications in market research

6. Recent Developments in MDS
p
 3-way unfolding models
 Stochastic MDS models
 Non-symmetric matrix models
 MDS / Clustering combinations (hybrid
models

7. Steps for Implementation
p p
 What brands and how many? y
Formulate the Problem 8<x<20 ideal
 What is the purpose of the
analysis?
l i ?
Obtain Input Data  Perception data : direct
approach
Run MDS Q = N (N - 1) / 2
Statistical Program Where # of questions depends on #
of brands
 Metric (interval) or Nonmetric
Map the results and (ordinal) MDS programs
define dimensions  2 D Map, often subjective

8. Example Application –
OS Perceptual Map of Search Engines
 Overall Si il it P
O ll Similarity Perceptual M of Search
t l Map f S h
Engines using Multidimensional Scaling
technique
 14 Subjects
5B Brands/Products
d /P d t
 Yahoo, Google, Copernic, AOL, MSN.com
 2 Di
Dimensions
i
 Usability and Overall Value
 5 point Ordinal Measurement Scale

9. Tools used
 Data Gathering
 Online Survey Tool : QuestionPro
www.questionpro.com
 Data Analysis and Visual Representation
 Excel Statistics Plugin : XLStat
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www.xlstat.com

10. MDS Proximity Map
y p
Configuration (Kruskal's stress (1) = 3.952E-5)
1
0.8
Go o gle
0.6
Co pernicus
0.4
0.2
02
Dim2
0
-1.2 -1 -0.8 -0.6 -0.4 -0.2 0 M SN.co m
0.2 0.4 0.6 0.8 1 1.2
-0.2
-0.4
Yaho o
-0.6 A OL
-0.8
Dim 1

11. OS Perceptual Map
p p
Go o gle
Gap 1
p
Co pernicus
Usability
M SN.co m
Value
Yaho o
A OL

12. Things to consider [3]
“Comparison of MDS Methods for Perceptual Mapping”,
7f t
factors varied over 4 diff
i d different MDS algorithms
t l ith
 Large samples are best –
 Analysis of <10 subjects should be interpreted cautiously
 The same holds true for # of brands, to lesser extent
 Greater than 6, less than 12 ideal
 Dissimilarity judgements should be collected on
interval scales or on ordinal scales with large
number of scale values
 Most frequent criticism of MDS is that assumptions
must be made on the error components
components.

13. References
1) Crawford,
Crawford Merle; DiBenedetto Anthony: New
DiBenedetto,
Products Management, eight edition
2)
) Carroll, J. Douglas; Green, Paul R.,
, g ; , ,
“Psychometric Methods in Marketing Research:
Part II, Multidimensional Scaling”, Journal of
Marketing Research, (May 1997), pp. 193-204
193 204
3) Bijmolt, Tammo H.A.; Wedel, Michel: “A
Comparison of Multidimensional Scaling
Methods for Perceptual Mapping”, Journal of
Mapping
Marketing Research, (May 1999), pp. 277-283
4) “How do I run a Multidimensional Scaling (
g (MDS)
)
with XLSTAT?”, http://www.xlstat.com/tutorials

14. Q
Questions??