· What is ? What is its purpose?

· Which situation, in terms of variables’ characteristic, is multidimensional

scaling appropriate to be used to analyze?

· Give some management / marketing questions that can be answered by

employing multidimensional scaling.

http://www.analytictech.com/networks/mds.htm ( đọc thêm bài này nếu thuyết trình )

1. Definition:
● Multidimensional scaling (MDS) is a class of procedures for representing
perceptions and preferences of respondents spatially by means of a visual
display.
2. Statistics associated with MDS:
● Similarity judgments. Similarity judgments are ratings on all possible pairs of
brands or other stimuli in terms of their similarity using a Likert-type scale.
● Preference rankings. Preference rankings are rank orderings of the brands or
other stimuli from the most preferred to the least preferred. They are normally
obtained from the respondents.
● Stress. This is a lack-of-fit measure; higher values of stress indicate poorer
fits.
● R-square. R-square is a squared correlation index that indicates the proportion of
variance of the optimally scaled data that can be accounted for by the MDS
procedure. This is a goodness-of-fit measure.
● Spatial map. Perceived relationships among brands or other stimuli are
represented as geometric relationships among points in a multidimensional space
called a spatial map.
 Example:

For example, given a matrix of perceived similarities between various brands of air
fresheners, MDS plots the brands on a map such that those brands that are perceived to be
very similar to each other are placed near each other on the map, and those brands that are
perceived to be very different from each other are placed far away from each other on the
map.

For instance, given the matrix of distances among cities shown above, MDS produces this
map:
In this example, the relationship between input proximities and distances among points on
the map is positive: the smaller the input proximity, the closer (smaller) the distance between
points, and vice versa. Had the input data been similar, the relationship would have been
negative: the smaller the input similarity between items, the farther apart in the picture they
would be.

Purpose:

1. The number and nature of dimensions consumers use to perceive different

brands in the marketplace
 2. The positioning of current brands on these dimensions

3.The positioning of consumers' ideal brand on these dimensions

Variable's characteristic:

the relationships among MDS, factor analysis, and discriminant analysis:

1. Formulate the problem:

● Specify the purpose of MDS.
● Select the brands to be included in the analysis.Usually varies between 8 and 25
brands.
● The choice of number and specific brands should be based on the marketing
research problem, theory, and the judgment of the researcher.

2. Obtain input data:

Perceptions data:

● Direct ( similarity judgments):

Respondents are often required to rate all possible pairs of brands or
stimuli in terms of similarity on a Likert scale. These data are referred to as
similarity judgments.

For example, similarity judgments on all the possible pairs of toothpaste

brands may be obtained in the following manner:

The direct approach has the following advantages and disadvantages:

Advantages: The researcher does not have to identify a set of salient attributes.
 Disadvantages: The disadvantages are that the criteria are influenced by the
brands or stimuli being evaluated. Furthermore, it may be difficult to label the
dimensions of the spatial map.

● Derived approaches ( Attribute ratings)

In MDS, attribute-based approaches to collecting perception data require

the respondents to rate the stimuli on the identified attributes using
semantic differential or Likert scales.

The attribute-based approach has the following advantages and

disadvantages:

advantages: It is easier to label the dimensions.

disadvantage: the researcher must identify all the salient attributes, a difficult task

=> Use both these approaches. Direct similarity judgments used for
obtaining the spatial map, and attribute ratings used to interpret dimensions
of the perceptual map.

Preferences data:

- Preference data order the brands or stimuli in terms of respondents'

preference for some property.
 - Respondents are required to rank the brands from the most preferred to the
least preference. Alternatively, respondents may be required to make paired
comparisons and indicate which brand in a pair they prefer.

Another method is to obtain preference ratings for the various brands.

- When spatial maps are based on preference data, distance implies

differences in preference. The configuration derived from preference
data may differ greatly from that obtained from similarity data. Two
brands may be perceived as different in a similarity map yet similar in a
preference map, and vice versa.

3. Select an DMS procedure:

Non-metric DMS:
● A type of multidimensional scaling method that assumes that the input data are
ordinal.
● Result in metric output.
● Spatial map: The distances in the resulting spatial map may be assumed to be
interval scaled. These procedures find, in a given dimensionality, a spatial map
whose rank orders of estimated distances between brands or stimuli best preserve or
reproduce the input rank orders.

The data of Table 21.1 were treated as rank ordered and scaled using a nonmetric
procedure
 Metric DMS:

● A multidimensional scaling method that assumes that the input data are metric. (
interval, ratio )
● Result in metric output.
● A stronger relationship between the output and input data is maintained, and the
metric (interval or ratio) qualities of the input data are preserved.

=> The metric and non metric methods produce similar results.

Another factor influencing the selection of a procedure is whether the MDS analysis will be
conducted at the individual respondent level or at an aggregate level.

4. Decide on the number of dimension:

● A priori knowledge. Theory or past research may suggest a particular number of
dimensions.
● Interpretability of the spatial map. Generally, it is difficult to interpret
configurations or maps derived in more than three dimensions.
● Elbow criterion. A plot of stress versus dimensionality used in MDS. The point at
which an elbow or a sharp bend occurs indicates an appropriate dimensionality.

- Thuyết trình:
we can theoretically use the "elbow" in the curve as a guide to the dimensionality of the data.
In practice, however, such elbows are rarely obvious, and other, theoretical, criteria must be
used to determine dimensionality.

5. Label the dimension and interpret the configuration:

● Even with direct similarity judgments, ratings of the brands on attributes may still be
collected.These attribute vectors may be fitted in the spatial map.
● Respondents may be asked to indicate the criteria they used in making their
evaluations.
● If objective characteristics of the brands are available these could be used in
interpreting the subjective dimensions of the spatial maps.
management / marketing questions that can be answered by employing
multidimensional scaling:

What are direct and indirect competitors ?

● Image measurement. Compare the customers' and non customers'

perceptions of the firm with the firm's perceptions of itself and thus identify
perceptual gaps.
● Market segmentation. Position brands and consumers in the same space
and thus identify groups of consumers with relatively homogeneous
perceptions.
● New product development. To look for gaps in the spatial map, which
indicate potential opportunities for positioning new products. Also, to
evaluate new product concepts and existing brands on a test basis to
determine how consumers perceive the new concepts.The proportion of
preferences for each new product is one indicator of its success.
● Assessing advertising effectiveness. Spatial maps can be used to
determine whether advertising has been successful in achieving the
desired brand positioning.
● Pricing analysis. Spatial maps developed with and without pricing
information can be compared to determine the impact of pricing.
● Channel decisions. Judgments on compatibility of brands with different
retail outlets could lead to spatial maps useful for making channel
decisions.
● Attitude scale construction. MDS techniques can be used to develop the
appropriate dimensionality and configuration of the attitude space.