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 telecom 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 telecom market, common dimensions might include price, network quality, customer service, and other relevant attributes.

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Perceptual Map of the European Telecom Market

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

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Telecom Brands on the Map:

1. Vodafone
2. Orange
3. Deutsche Telekom (T-Mobile)
4. Telefónica (O2)
5. BT Group
6. Three
7. EE
8. TIM (Telecom Italia)
9. Swisscom
10. KPN
11. Telia
12. Telenor
13. Bouygues Telecom
14. SFR
15. Wind Tre
16. Proximus
17. Elisa
18. Telekom Austria
19. Cosmote
20. Altice

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What Can We See in This Map?

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1. Competitive Positioning:

• Price: We see which telecom brands are perceived as budget-friendly (e.g., Three, Wind Tre) versus premium (e.g., Swisscom, Vodafone).
• Service Quality: We identify telecom providers perceived as low service quality (e.g., Wind Tre, Cosmote) versus those perceived as high service quality (e.g., Deutsche Telekom, Swisscom).

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2. Market Segmentation:

• The map highlights different segments within the telecom market. For example, budget-friendly and low-service-quality 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 telecom 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, Vodafone, Orange, and Deutsche Telekom cluster together as premium, high-service-quality telecom 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 coverage areas, data speed, or additional services offered.

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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 Vodafone and Orange are perceived similarly, a preference map might reveal that consumers overwhelmingly prefer Vodafone over Orange due to factors like better customer service or more attractive pricing plans.

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Conclusion

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A perceptual map of the European telecom 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.

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