Perceptual maps are powerful tools that provide visual insights into consumer perceptions of different brands or products within a market. In this blog post, we'll explore what a perceptual map of the European insurance market can reveal, and what it cannot, emphasizing the need for additional tools like preference maps for a more comprehensive understanding.

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What is a Perceptual Map?

A perceptual map plots products or brands based on various attributes as perceived by consumers. For the insurance market, common dimensions might include price, quality, customer service, brand image, and other relevant attributes.

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Perceptual Map of the European Insurance Market

Below is a perceptual map featuring 20 popular European insurance brands. The map plots insurance providers on two dimensions: "Price" (from Budget to Premium) and "Service Quality" (from Low to High).

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Insurance Brands on the Map:

1. AXA
2. Allianz
3. Generali
4. Aviva
5. Zurich
6. Prudential
7. Legal & General
8. Mapfre
9. UnipolSai
10. Groupama
11. Swiss Life
12. CNP Assurances
13. Bupa
14. Aegon
15. Talanx
16. NN Group
17. Direct Line
18. RSA Insurance Group
19. Admiral Group
20. PZU

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What Can We See in This Map?

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1. Competitive Positioning:

• Price: We see which insurance brands are perceived as budget-friendly (e.g., Admiral Group, Direct Line) versus premium (e.g., Zurich, Swiss Life).
• Service Quality: We identify insurance providers perceived as low service quality (e.g., Admiral Group, PZU) versus those perceived as high service quality (e.g., AXA, Allianz).

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2. Market Segmentation:

• The map highlights different segments within the insurance market. For example, budget-friendly and low-service-quality insurance providers appeal to a different segment than premium and high-service-quality providers.

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3. Gaps in the Market:

• Identifying areas on the map with fewer brands can reveal market opportunities. For instance, there might be room for a new premium insurance provider with mid-range service quality if that area is underrepresented.

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4. Brand Clusters:

• We see clusters of brands that are perceived similarly. For example, AXA, Allianz, and Zurich cluster together as premium, high-service-quality insurance providers.

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What Can We Not See in This Map?

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1. Consumer Preferences:

• While perceptual maps show how brands are perceived, they do not reveal consumer preferences. Just because two brands are close together on the map does not mean consumers like them equally.

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2. Purchase Intent:

• The map does not indicate which brands consumers intend to purchase. Preference data is needed to understand which brands are favored over others.

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3. Market Share:

• The map does not show the market share of each brand. A preference map, which includes data on consumer choices, is necessary to correlate perceptions with actual sales data.

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4. Nuanced Attributes:

• Perceptual maps are typically limited to a few dimensions. They cannot capture all the nuanced attributes that might influence consumer choices, such as claims processing efficiency, product range, or customer support.

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The Need for a Preference Map

A preference map adds a layer of consumer preference data to the perceptual map. This combination can show not only how brands are perceived but also how much they are liked and chosen by consumers.

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For example:

• If AXA and Allianz are perceived similarly, a preference map might reveal that consumers overwhelmingly prefer AXA over Allianz due to factors like better customer support or more comprehensive coverage options.

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Conclusion

A perceptual map of the European insurance market provides valuable insights into competitive positioning, market segmentation, and potential gaps. However, to gain a comprehensive understanding of consumer behavior and market dynamics, it's essential to complement perceptual maps with preference maps. Preference maps incorporate consumer preferences and purchase intentions, providing a more complete picture of the market.

By using both perceptual and preference maps, marketers can craft more effective strategies, identify opportunities, and better meet consumer needs in the dynamic European insurance market.

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