Multidimensional Scaling

MDS can be used to measure

• Image measurement• Market segmentation• New product development( positioning)• Assessing advertising effectiveness• Pricing analysis• Channel decisions• Attitude scale construction

Terms associated with MDS

• Similarity judgments : between all possible pairs using a likert type scale

• Preference rankings: most to least preferred• Stress: Lack of fit. Higher values lower fit• Spatial Map: geometric relationships in a

multidimensional space• Coordinates• Unfolding : representation of both brands and

respondents as points in the space is unfolding

Formulation of Problem

• Purpose for which MDS would be used.• here we can go for brands or attributes• Brand of tooth paste: crest, Colgate, aqua

fresh, aim, closeup n(n-1)/2 [Comparatively easy]

• Attribute: whitening of teeth, tooth decay, pleasant taste etc

Select a MDS procedure

• Non metric MDS(ordinal)• Metric MDS(interval or ratio)

Deciding on number of dimensions

• Stress is the deciding factor• Ease of use

Label and interpret the configuration

• By examining the coordinates and their relative positions of brands

• Brands located near compete fiercely• Brands farther along descriptor are strong• Gaps indicate potential opportunities • Higher Rsquare is desirable. More than 0.6

Interpreting TV brands

• Tables representing 3-dimension, 2-dimension and 1-dimension data

• Stress score3-dimension: 0.05230(best one)2-dimension: 0.240151-dimension: 0.43159 Since 8 brands so we can go for 3 dimension but if

12-15 brands we can go for higher dimensions

• Dimension 1 : Value for money(var 6, var1 & var5)

• Dimension 2: After sales(var7, var 2• Dimension 3: current brand image( var2 &

var8)( judgment, knowledge or data generated

market survey)