MULTIDIMENTIONAL SCALING

submitted to Prof. Bisliah

Team members are:

SHIVDANUSH
SAMARTH
SWATHI
ROHITH
MEANING
Multi-dimensional scaling (MDS) is a statistical
technique that allows researchers to find and
explore underlying themes, or dimensions, in
order to explain similarities or dissimilarities
(i.e. distances) between investigated datasets.
In simple words
Multidimensional scaling is a visual
representation of distances or
dissimilarities between sets of objects.
 History of MDS
• The term Multidimensional scaling made it’s
first appearance in 1938 in
Richardson’s Multidimensional Psychophysics.
TYPES OF MSD
• Classical multidimensional scaling
• It is also known as Principal Coordinates Analysis It takes an
input matrix giving dissimilarities between pairs of items and
outputs a coordinate matrix whose configuration minimizes
a loss function called strain.

• Metric multidimensional scaling

It is a superset of classical MDS that generalizes the
optimization procedure to a variety of loss functions and
input matrices of known distances with weights and so
on. A useful loss function in this context is called stress.
• Non-metric multidimensional scaling
Non-metric MDS finds both a non-
parametric monotonic relationship between the
dissimilarities in the item to item matrix and
distances between items, and the location of each
item in the low-dimensional space
Procedure
• Uses of Multidimensional Scaling in Business:

• Market segmentation: If brands are located as points in preference space, as in the

example and consumers ideal points are similarly located, market segments may
then be viewed as subspaces in which consumers have similar ideal positions and
perceive the brands similarly.
• Product life cycle: By analyzing consumer perceptions at different times,
researchers may be able to relate movement along various characteristics to some
measure such as market share, and, thus develop a new concept of product life
cycle.
• Vendor Evaluations: Industrial purchasing agents must choose among vendors who
differ – for example, in price, delivery, reliability, technical service and credit. How
purchasing agents summarize the various characteristics to determine a specific
vendor from whom to purchase would be information that would help vendors
design sales strategies.
• Advertising Media Selection: Which magazines should be used for an advertising
campaign to reach a given audience? Different possible media could be identified
with similar aspects and members of their audiences located as ideal points. This
would be similar to the market segmentation process. A similar approach might be
taken to locate the best media for specific ads.
• PRACTICAL EXAMPLE FOR MULTIDIMENSIONAL SCALING
• OBJECTIVE : A spirits manufacturer wished to plan the optimal positioning of
one of his products – an herb liqueur – within the competitive environment.
With this in mind, a tracking study was put in place to monitor specific changes
in the product over a long period. In a qualitative phase, 16 items were defined
and their validity with regard to the objective was checked by means of a factor
analysis
• The factor analysis showed that the items could be clearly classified into the
three fundamental rating dimensions, “taste / effect”, “tolerability” and
“disturbance”.
• In the following tracking waves, all tested products were rated on these 16
items. Thus, for each wave the positioning of the client’s product could be
shown in detail in relation to the competitor products.
• A tabulation of the positioning of the client’s product in an environment with 4
competitor products delivered 80 median scores (5 x 16). A comparison of all
brands for the 16 items on a paired basis alone would require 160 mean score
comparisons.
To create this graphical presentation, a multidimensional
scaling (MDS) was used.
The following 16 characteristics were rated:
 Ratings were on a 7-point scale, where 1 = “does not apply at all” and 7 =
“applies completely”. The multidimensional scaling of the data from the first
wave delivered the following result:

• MDS with 5
herb liqueur
brands based on
16
characteristics
• It can be seen that the 5 liqueurs were perceived differently by the
survey respondents. The client’s product (Product K) has a distinct
position. However, on the basis of the learnings from the previously-
conducted factor and regression analyses, it must be concluded that
this position is not automatically positive. Product K is rated very
positively for the items in the “taste / effect” group. Because of the
strong positive influence of this dimension on willingness to buy this
guarantees a high level of acceptance among the target group.

• However, when comparing with competitors 1 and 2, it is easy to see

the weaknesses of Product K. Products W1 and W2 are also
positively rated on “taste / effect”. Moreover, they are rated
significantly better with regard to the factor of “tolerability”, which
is also a very strong driver. In addition, Product W2 is particularly
perceived as substantially less irritating (lower “disturbance” factor).
• It is thus clear that a repositioning towards “upper right”, i.e.
in the direction of “tolerability” – if possible without any loss
of “taste / effect” – would mean an optimization with regard
to consumer acceptance. In addition, it would position the
product in a niche, because none of the competitors’
products are both very tasty / effective and also tolerable.

• The MDS under consideration reflects the findings from the

factor analysis. The three independent dimensions discovered
in the factor analysis can evidently be projected well onto a
plane. This is a special case, allowing the two analyses to be
linked and thus simplifying interpretation.
• Another example:

• Let’s say you were given a list of city locations, and

were asked to create a map that included distances
between cities. The procedure would be relatively
easy, involving nothing more complicated than taking
a ruler and measuring the distance between each
city. However, what if you were given only the
distances between the cities (i.e. their similarities) —
and not their locations? You could still create a
map — but it would involve a fair amount of
geometry, and some logical deductions.
 Multidimensional scaling uses a square, symmetric matrix for input. The
matrix shows relationships between items. For a simple example, let’s say you
had a set of cities in the state of Florida and their distances:
 Advantages
• An alternative to GLM.
• Does not require assumptions of linearity.
• Can be used to model non-linear relationships.
• Reveals dimensions without the need for
defined attributes.
 Disadvantages
• Provides a global measure of dissimilarity , but
does not provide much insight into subtleties.
• Increased dimensionality: difficult to represent
the increased in data. As such the model of the
data becomes as complicated as the data itself.
• Determination of meanings of dimensions is
subjective.
 Conclusion
• The multidimensional scaling method allows
to map the products that have been rated by
the testers.
• It allows higher interpretation than simple
statistics .
THANK YOU