Perceptual mapping

The value map (or matrix of values ​​and value-for- matrix ) is an instrument for determining the competitive position of products or services. This relative price and relative quality of the product or service are considered and the resulting relative price - performance ratio.

Basics

Quality is a way to implement a differentiation strategy, according to Henry Mintzberg. A higher quality has thereby an increase in compliance costs, but a decrease in deviation costs. The two counter -running developments cause to offset additional costs for quality through savings. So, for example, has the PIMS study demonstrated that an increase in quality is not synonymous with an increase in direct costs. Since quality prevents commoditization, it leads to higher prices as long-term market share gains. Thus, a differentiation strategy on quality is superior to the competition costs. However, quality is far less quantifiable. Thus, in addition to internal quality technical point of view, an external view. On the one hand quality according to ISO 9000:2005 is defined as the " degree to which a set of inherent characteristics fulfills requirements" and on the other hand, judged every customer subjectively the quality of a product or service and appreciates the " fitness for use" a. This relativity of the concept of quality carries the invoice value map. Thus, products and services can be assessed relative to the competitors in its price - performance ratio.

Strategic position ranges

The value map takes into account the relative quality and relative price in two -dimensional diagram, and is defined as follows:

In the PIMS study is a third way of illustration of the relativity is involved with perception. This is not considered in the value map.

Finally, five areas of strategic positioning in the value map obtained:

The diagonal, the so-called value-for- line, reflects the average competitive behavior. It is a kind of regression line through the product positioning in the market and illustrates the exchange ratio of quality and price. In quality- sensitive markets, the move straight to the right, ie it moves at a higher quality level. This means that smaller quality differences lead to larger price differences.

On the value-for- straight following behaviors are expressed: either the company offers a rather low at low prices, but the customer accepted quality level ( low position) or requiring the company for top quality at a high price (luxury item). The third position is the average position in which the Company requires an average price, but the customer only gets offered average quality. In addition, through the PIMS study two typical behaviors were uncovered:

A fourth group of providers requires high prices for quality, which is assessed from the customer's perspective, however, low. Such an inferior price-performance ratio usually offer those companies that do not sufficiently understand the customer needs and rather pursue internal technical - functional quality standards that are not rewarded by customers. Another internal reason could be that it is the company at the moment not possible to increase the quality level significantly. The quality is perceived as worse than the competition. It is also conceivable that companies such as for products that quickly become obsolete and a short life cycle (eg fashion products ), pursue a levy strategy and therefore set prices as high as possible. In this case, the strategy of an inferior price -performance ratio is driven deliberately.

A fifth group of providers, however, offers top quality at low prices, which is the strategy of the superior price -to-line ratio. According to the PIMS study, these are mainly young, innovative, customer-oriented company.

Implications

The five different positioning areas have opposite effects on market share, marketing intensity and the rate of return of companies. In this context, The PIMS study provides concrete data.

Comparison of the marketing intensity

Relationship between price - performance ratio and ROI

With regard to the market share of these can be said of products on the cheap position, those built on the luxury on the other hand from her position. The positioning of spaces Really interesting below and above the price-performance line. Products with superior price-performance ratio build its market share significantly, those with inferior Value lose heavily.

The marketing intensity is of little interest for the fields on the price-performance line. Increased marketing effort has to be for products an inferior price - performance ratio. Consequently, need top quality products at low prices reduced marketing expenses.

With regard to the return of the return on investment (ROI ) in the luxury sector and devices with superior price performance at its highest. In low range, significantly lower yields can be achieved, but still higher than with products in the field of an inferior price - performance ratio.

In summary, one can say that it is possible products in the luxury sector and with superior price-performance ratio as identify better range positioning.

Strategy recommendations

After identifying the product positioning can be specific recommendations for quality strategies derived. This must be considered in addition to the relative quality, even in view of the differentiation of the market. Market differentiation states thereby, the extent to which individual providers differ in terms of product and service. For certain situations, starting three quality strategies can be recommended.

In the catch-up strategy of quality disadvantage is eliminated in order to catch up with the competition. This leads to a reduction of market differentiation, which in turn leads to price competition for market shares and thereby to lower industry returns.

If quality levels are skipped at constant market differentiation, we speak of the skip strategy. Here the yield level is maintained.

If both market differentiation and the relative quality increased, referred to this strategy as these, drawing. An increase in market differentiation can be achieved by eg product properties are offered, which does not have its competitors or which are perceived and valued by customers. This often attracts an increase in the level of total return by itself.

Conclusion

Generally speaking, a positive link between market differentiation, relative quality and profitability exists. At high market differentiation and high relative quality of the highest ROI is achieved, whereas at high market differentiation and a low relative level of quality of the same return on investment is achieved as low differentiation and high relative quality.