Adaptive Multidimensional Scaling: Brand Positioning Based on Decision Sets and Dissimilarity Judgments
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RESEARCH ARTICLE
Adaptive Multidimensional Scaling: Brand Positioning Based on Decision Sets and Dissimilarity Judgments Tammo H.A. Bijmolt 1
&
Michel Wedel 2 & Wayne S. DeSarbo 3
Accepted: 4 September 2020 # The Author(s) 2020
Abstract Assessing market structure by deriving a brand positioning map and segmenting customers is essential for supporting brandrelated marketing decisions. We propose adaptive multidimensional scaling (ADMDS) for simultaneously deriving a brand positioning map and market segments using customer data on cognitive decision sets and brand dissimilarities. In ADMDS, the judgment task is adapted to the individual customer where dissimilarity judgments are collected only for those brands within a customers’ awareness set. Thus, respondent fatigue and unfamiliarity with the brands are circumvented thereby improving the validity of the dissimilarity data obtained, as well as the multidimensional spatial structure derived from them. Estimation of the ADMDS model results in a spatial map in which the brands and derived segments of customers are jointly represented as points. The closer a brand is positioned to a segment’s ideal brand, the higher the probability that the brand is considered and chosen. An assumption underlying this model representation is that brands within a customers’ consideration set are relatively similar. In an experiment with 200 respondents and 4 product categories, this assumption is validated. We illustrate adaptive multidimensional scaling model on commercial data for 20 midsize car brands evaluated by 212 members of an on-line consumer panel. Potential applications of the method and future research opportunities are discussed. Keywords Brand positioning . Customer segmentation . Cognitive decision sets . Multidimensional scaling
1 Introduction Product positioning requires insight into which customers consider the purchase of a brand, and what their perception is of this brand and its competitors. Assessing market structure by segmenting the market and deriving a competitive map of the
* Tammo H.A. Bijmolt [email protected] Michel Wedel [email protected] Wayne S. DeSarbo [email protected] 1
Department of Marketing, Faculty of Economics and Business, University of Groningen, PO Box 800, 9700 AV Groningen, The Netherlands
2
Consumer Science at the Robert H. Smith School of Business, University of Maryland, College Park, USA
3
College of Business Administration, Pennsylvania State University, University Park, PA 16802, USA
brands is an essential tool supporting product positioning. The spatial representation of brands and segments has indeed proven to be very insightful to managers [1]. As a consequence, marketing researchers have gainfully employed multidimensional scaling methods (MDS) for such assessment [2–5]. While popular in the 1980s and 1990s, the utilization of MDS as a tool for perceptual mapping has diminished in this century. The waning popularity of MDS has been due to a number of challenges regarding data collection and analysis. The collection
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