INDIAN INSTITUTE OF MANAGEMENT LUCKNOW

Post Graduate Program in Management

MARKETING MODELS IN AGRI-BUSINESS | TERM-4

PROJECT REPORT- 2 & 3

Instructor- Prof. K.B. Gupta

Submitted by- Group 1 | Section A

PGP/36/055- Ankit Bilung | PGP/36/434- Pragya Chansoriya | PGP/35/133- Priyanka Pote |

PGP/36/146- Swagata Ganguly
 PROJECT – 2
Introduction

Perceptual mapping is a diagrammatic technique used by marketers to visually represent

customers' or potential customers' perspectives. In a perceptual map, a product, product line,
brand, or company's position in relation to its competitors is displayed. This comparison is
done in terms of a set of product attributes called Determinant attributes. These are the
characteristics that a customer considers while making a purchase. To put it another way,
determinant traits are very significant to them, and they utilize them to distinguish
competitor goods. For example, the diagram below shows the perceptual map of Alexa in
comparison to similar products offered by other brands on Quality and Price attributes.

Perceptual maps assist marketers in determining where their company ranks in terms of
attributes and in relation to competitors. Consumers' ideal points, which reflect their
preferred combinations of product features, can be displayed on perceptual maps. When
developing a new product, a corporation should seek a space that is currently untapped by
competitors and has a high concentration of consumer interest (ideal points).

In this project, we have selected a food product category i.e. Cream biscuits and have created
a perceptual map of 8 different brands falling under this category. This has been done by
identifying attributes which are important to customers when they decide which brand of
Cream biscuits to purchase. On the basis of this, we have tried to conclude the scope for
positioning of new brands or repositioning the current products in the market.
 Objective
To plot a Preference Map using the “Ideal Point Method” and trying to evaluate how closely
a particular customer prefers an existing list of brands against a fictitious “Preferred Brand”
for a given product category.
The next objective would be to suggest strategic positioning of a new brand keeping in mind
how the different brands are currently plotted on the Perception Map.

Methodology
1) Selection of the product category that we wish to study- Cream Biscuits
2) Selection of different brands within the product category. Our list of brands are as follows-
• Hide & Seek
• Milk Bikis
• Bourbon
• Oreo
• Dark Fantasy
• Jim Jam
• Britannia Treat
• Sunfeast Bounce
• Preferred Brand- An imaginary brand with ideal preferences
3) Identifying different attributes that are important for the chosen product category. We
identified the following attributes to be crucial for Cream Biscuits
• Taste
• Variety of Flavors
• Quality
• Price
• Packaging
• Availability
• Packet Size
4) Data collection- reaching out to one person who has consumed each of these brands at
least once, and asking them to rate each brand on a scale of 1 to 5 against each the
attributes listed above.
5) Running a Factor Analysis to find 2 underlying components that were used as the axis for
designing the Perceptual Map.
6) Plotting the Perceptual Map on excel using the factor scores generated as a result of the
factor analysis conducted on SPSS
7) Analyzing the conclusions drawn from the map and aligning them with the objectives of
our project.
 Analysis

Total Variance Explained

Initial Eigenvalues Extraction Sums of Squared Loadings
% of Cumulative % of Cumulative
Component Total Variance % Total Variance %
1 2.803 40.042 40.042 2.803 40.042 40.042
2 1.820 25.998 66.041 1.820 25.998 66.041
3 1.426 20.366 86.407
4 0.528 7.545 93.952
5 0.313 4.467 98.418
Two Factors
6 0.081 1.161 99.579 Identified by
7 0.029 0.421 100.000 fixing the number
Extraction Method: Principal Component Analysis. of factors on SPSS

Rotated Component Matrixa

Component
1 2
Taste -0.123 0.917
Flav_Var 0.850 -0.309
Flavor Variety, Packaging &
Quality -0.132 0.822
Availability have high
Price 0.388 0.501
correlation with component 1.
Packaging 0.792 0.077
Avalibility 0.853 -0.299 Taste and Quality have high
Pack_Size 0.609 0.182 correlation with component 2.
Extraction Method: Principal Component
Analysis.
Rotation Method: Varimax with Kaiser
Normalization.
a. Rotation converged in 3 iterations.

Brand Taste Flav_Var Quality Price Packaging Avalibility Pack_Size Factor 1 Factor 2
Hide & Seek 5 3.5 5 4 4 5 4 -0.04107 0.77476
Milk Bikis 4 2 4 4.5 3 3.5 4 -0.83227 -0.53225
Bourbon 3 3 4.5 4 4 4.5 4 0.20398 -0.55273
Oreo 4.5 5 5 3.5 4 5 2 0.01683 -0.21839
Dark Fantasy 4.5 2 5 3.5 4 3 2.5 -1.29729 -0.29693
Jim Jam 5 2 5 4.5 4 3 2 -1.37342 0.52958
Prefered 5 5 5 5 5 5 5 1.02052 2.14311
Britannia Treat 3 5 4 4 4.5 5 3.5 1.12182 -0.7048
Sunfeat Bounce 3 5 3.5 4 4.5 5 3 1.18091 -1.14235

Last two columns

indicate the factor
scores generated
from the analysis
 Scope for Positioning
new brands or
repositioning

Preference Map
2.5
Preferred Brand
2

1.5
Secondary Attributes

1
Jim Jam Hide & Seek
0.5

0
-2 -1.5 -1
Milk Bikis -0.5 0 Oreo 0.5 1 1.5
Dark Fantasy -0.5 Britannia Treat
Bourbon
-1 Sunfeast Bounce

-1.5
Primary Attributes

1) The 2nd factor identified was named as “Primary Attributes” and it has been plotted as the
Y-axis in the map.
2) The X-axis denotes “Secondary Attributes” which is the 1st factor derived from the factor
analysis.
3) Using the factor scores generated, the preference map was plotted on excel and then the
different brands were indicated on the map accordingly.
4) We see that the imaginary “Preferred Brand” is lying on the 1 st quadrant and has been
rated high on the both Primary as well as Secondary attributes.
5) Hide & Seek and Jim Jam are the two brands on the 2nd quadrant implying that the
respondent has rated them high on Primary Attributes, but lower on Secondary
Attributes.
6) Dark Fantasy & Milk Bikis lying on the 3rd quadrant have been assigned lower rates on
both the factors
7) All the other brands located on the 4th quadrant have received a higher rating for
Secondary Attributes but a low rating for Primary Attributes.
8) Out of all the brands, customer prefers Hide & Seek the most as it is closest to the
“Preferred Brand”, and Jim Jam is the customer’s next best preference.
 Conclusion
1) Customer prefers brands that are high on both the factors, i.e. Secondary as well as
Primary Attributes.
2) There is high scope to introduce brands that are very high on Primary Attributes, but
slightly less in terms of Secondary Attributes as can be seen from the blank space above
Jim Jam- the circle has been used to depict the potential positioning area.
3) Likewise, there is a scope for introducing brands that will be high on both the factors and
have been depicted by the blank areas spotted by a circle on the right side of Hide & Seek.
4) Whereas, there too many brands competing on the lower quadrants indicating that it
would be less profitable to position a new brand there
Note: The entire analysis has been done basis only one respondent’s preference. Thus, to get
a complete view, we must select a customer segment that has high similarities and they make
adequate conclusions about the brand preferences.
 PROJECT – 3
Introduction
For our analysis, we have taken Jam as the product and carried out Conjoint Analysis to
evaluate importance of product parameters. We collected customer preferences on factors
namely flavor (Pineapple, Apple, Strawberry and Mixed Fruit), container size (Small, Medium
and Large), container type (Plastic or Glass) and prices (<10, 10-20 and >20). We have
generated an orthogonal plan for the analysis and then carried out the conjoint analysis with
the resultant data. The analysis would help us find out the relative importance of each factor
as well as the more preferred factor value according to the customer preferences. This will
help the analyzer make decisions on choosing important parameters based on the results and
then decide budget and other marketing decisions. The analysis can be used to choose the
best possible combination of parameters to maximize the utility of the customers and hence
maximize the profit for the company.

Objective
To carry out Conjoint Analysis for the data about jam as a product around parameters like its
flavor, container size, container type and prices and evaluate which factors are more
important to the customers, which are the preferred choices for each factor in the analysis by
finding out their utilities. The analysis is used to evaluate the best possible combination of
factors based on consumer preferences by maximizing the overall utility estimates.
The next objective would be to suggest the most relevant factors to consider while
making/packaging jam as the product and suggest the best possible combination of
parameters that will maximize the customer utility based on the data.

Methodology
1) Selection of the product category that we wish to study- Jam
2) Selection of different factors relevant to the sale of the product category and their
possible values. Our chosen factors related to the sale of the product (Jam) are:
• Flavour (Pineapple, Apple, Strawberry and Mixed Fruit)
• Container Size (Small, Medium and Large)
• Container Type (Plastic and Glass)
• Price (<10, 10-20 and >20)
3) Data collection- reaching out to the customers and asking them to rank their preferences
of the factors and their respective values
4) Running a Conjoint Analysis to find the importance and the order of preference of the
factors that were used in the analysis of the product.
5) Ranking the factors based on their relative customer preferences
6) Analyzing the conclusions drawn from the analysis and aligning them with the objectives
of our project.
 Analysis
We have generated an orthogonal plan for the given parameters which has suggested the
required sets of combinations of all the parameters that would be needed for the conjoint
analysis and can be presented to the customers to find out their preferences for carrying out
the analysis.
The factors that we considered for our analysis are flavor, container size, container type and
price for analyzing jam as our product.
We then carried out conjoint analysis for the resultant data. The results show the following:
The model description showing factors and their types of values (linear or discrete). This is
followed by the table showing overall statistics of the data that shows the utility estimate and
the standard error w.r.t each parameter. Here, the higher value of utility is the preferred value
for each parameter. The results further show the importance values of each parameter. The
parameters with higher values are preferred over the ones with lower values. And lastly, the
correlation values show how much related is the estimated value compared to the observed
value.
At the end we got the data for the analysis of the entire data as a whole on similar parameters.
The results are explained below.

Model Description:
The factors types are explained in the model description where the factors can be discrete or
linear (more) meaning a higher value is preferable and linear (less) meaning a lesser value is
more preferable.
The results further shows data about each customer’s preferences

Model Description

Relation to Ranks
N of Levels or Scores

flavour 4 Discrete

Container_Size 3 Linear (more)

Container_Type 2 Discrete

Price 3 Linear (less)

Overall statistics
This section shows the Utility estimate of each parameter or factor considered. The higher
the utility estimate, more preferred is the parameter.
In our case, strawberry flavor has the highest value for utility estimate followed by pineapple,
mixed fruit and apple.
Similarly, customers preferred the glass containers over plastic containers which have a
negative utility estimate associated with them.
For the container size parameter, customers preferred the large container type followed by
medium and then small.
In terms of pricing preferences, customers preferred higher prices over the smaller values
which is probably related to the higher utility of the container size where larger container size
is preferred.

Utilities

Utility Estimate Std. Error

flavour Pineapple .438 .596

Apple -.893 .738

Strawberry .528 .738

Mixed Fruit -.073 .738

Container_Type Plastic -.542 .397

Glass .542 .397

Container_Size Small .079 .520

Medium .157 1.040

Large .236 1.560

Price <10 .350 .520

10-20 .700 1.040

>20 1.050 1.560

(Constant) 12.249 1.387

We can take the sum of all the factor utilities to evaluate the overall estimated utility of the
combination.
Importance Values
Here the importance of each factor is shown as the percentage of the overall factors. In this
case, flavour has the highest importance with a value of 38.636% followed by container
size(22.602%), container type (20.495%) and price (18.267%). The analysis shows that price is
the factor of least importance and flavour is the most important factor for the customers
while making the purchasing decision of jam.

Importance Values

flavour 38.636

Container_Type 20.495

Container_Size 22.602

Price 18.267

Correlations
The correlations value shows how much the observed value is related to the estimated
preferences. The low value of correlation (0.436 in our case) is a reason of concern as the low
value suggests that the correlation between the observed and the estimated values is less
and the responses by the customers are majorly random rather than thoughtful responses.
Higher values of correlation are preferred as they suggest the customer preference are as
being estimated and their preference are authenticated.

Correlationsa

Value Sig.

Pearson's R .436 .015

Kendall's tau .282 .025

Kendall's tau for Holdouts .200 .287

Number of Reversals
Reversal table shows the opposite behavior of the parameters or the subject. Our results
show that 7 customers have shown reversal behavior for the parameter container size
meaning more customers have preferred larger container size over smaller container size.
This result reinstates the high utility estimates of the larger containers in the earlier section.
Price has shown reversal behavior in 5 customers meaning 5 customers preferred higher price
over lower price. This is again reinstating the utility estimates of the price factor.Similarly,
each customer’s reversal behavior has been shown by the no parameters with reversals of
that customer. Customers with zero reversal values have shown no reversals.
 Number of Reversals

Factor Container_Size 7

Price 5

Container_Type 0

flavour 0

Subject 1 Subject Customer1 0

2 Subject Customer2 1

3 Subject Customer3 2

4 Subject Customer4 1

5 Subject Customer5 0

6 Subject Customer6 2

7 Subject Customer7 2

8 Subject Customer8 2

9 Subject Customer9 2

10 Subject Customer10 0

Conclusion
1) Customer decisions are based on the factors in decreasing order as follows-
Flavor > Container Size > Container Type > Price
2) Customers prefer Strawberry flavor the most followed by Pineapple, mixed fruit and then
apple.
3) Customers prefer buying large containers over Medium and Small containers.
4) Customers prefer Glass containers over plastic containers.
5) Customers prefer higher price products reinstating their preferred purchase of large
containers.
6) The correlation between the estimated values and the observed vales is less which
suggests that the data collected from the customers is less consistent and random. A
higher value of correlation would suggest a more stable and authentic data results.
7) The reversal behavior is also high as the no of reversals are quite significant suggesting
that the respondent’s response are not very consistent with the data.
Note: The entire analysis has been done basis only 10 respondent’s preference. Thus, to get
a complete view, we must select a customer segment that has high similarities and they make
adequate conclusions about the product parameter preferences.