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 retail 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?

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

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Perceptual Map of the European Retail Market

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

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Retail Brands on the Map:

1. Aldi
2. Lidl
3. Tesco
4. Carrefour
5. Sainsbury's
6. Asda
7. Morrisons
8. E.Leclerc
9. Auchan
10. Coop
11. Waitrose
12. Marks & Spencer
13. Metro
14. Spar
15. Rewe
16. Migros
17. Biedronka
18. Kaufland
19. Netto
20. Colruyt

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What Can We See in This Map?

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1. Competitive Positioning:

• Price: We see which retail brands are perceived as budget-friendly (e.g., Aldi, Lidl) versus premium (e.g., Waitrose, Marks & Spencer).
• Quality: We identify retailers perceived as low quality (e.g., Netto, Biedronka) versus those perceived as high quality (e.g., Waitrose, Marks & Spencer).

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2. Market Segmentation:

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

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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 retailer with mid-range quality if that area is underrepresented.

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4. Brand Clusters:

• We see clusters of brands that are perceived similarly. For example, Aldi and Lidl cluster together as budget-friendly, low-quality retailers.

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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 product variety, store locations, or loyalty programs.

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The Need for a Preference Map

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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.

For example:

• If Aldi and Lidl are perceived similarly, a preference map might reveal that consumers overwhelmingly prefer Lidl over Aldi due to factors like store layout or specific product lines.

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Conclusion

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A perceptual map of the European retail 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 retail market.

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