Check out our FREE Resources page – Download complimentary business frameworks, PowerPoint templates, whitepapers, and more.

Flevy Management Insights Q&A
What advanced techniques can we use to develop a perceptual map in Excel for detailed market analysis?

This article provides a detailed response to: What advanced techniques can we use to develop a perceptual map in Excel for detailed market analysis? For a comprehensive understanding of Market Research, we also include relevant case studies for further reading and links to Market Research best practice resources.

TLDR Use Excel's advanced features to create perceptual maps for Strategic Planning, market segmentation, and competitive positioning, ensuring consistent methodology and actionable insights.

Reading time: 4 minutes

Creating a perceptual map in Excel for detailed market analysis is a sophisticated technique that enables organizations to visualize their position relative to competitors in the marketplace. This strategic tool is invaluable for C-level executives aiming to make informed decisions about product positioning, market segmentation, and competitive strategies. The process involves plotting products or brands on a two-dimensional graph, with each axis representing attributes that are important to the target market. The resulting visual framework aids in understanding how consumers perceive a brand versus its competitors, highlighting opportunities for differentiation and growth.

Excel, with its robust features and wide accessibility, is an excellent tool for constructing perceptual maps. However, the process goes beyond basic chart creation, requiring a deeper understanding of data analysis and visualization techniques. To start, gather consumer data on perceptions and preferences regarding your brand and competitors. This data often comes from market research surveys that ask respondents to rate products on various attributes. Once collected, the data needs to be analyzed to determine the most important dimensions to include on the perceptual map. These dimensions could range from tangible attributes like price and quality to intangible factors like customer service and brand reputation.

After identifying the key dimensions, use Excel's scatter plot feature to create the perceptual map. Each brand or product is plotted based on its scores on the two chosen dimensions. Customizing the chart to enhance readability and impact is crucial—this includes adding labels, adjusting scales, and applying your organization's color scheme. Advanced Excel users can further refine their perceptual maps by employing conditional formatting, dynamic labels, and interactive elements such as sliders to adjust the view based on different attributes. These enhancements not only make the map more visually appealing but also more insightful, allowing executives to easily digest complex market data and make strategic decisions.

Framework and Template Development

Developing a standardized framework and template for creating perceptual maps in Excel can streamline the process, ensuring consistency and accuracy across analyses. Start by defining a clear set of steps for data collection, analysis, and visualization. This framework should be adaptable to different markets and product categories but maintain core elements that reflect your organization's strategic priorities. For instance, if customer service and innovation are key differentiators for your organization, these dimensions should be prominently featured in your perceptual mapping framework.

Creating a template in Excel that pre-configures the scatter plot with your organization's branding and preferred chart styles can save time and ensure that all perceptual maps adhere to a professional standard. Include placeholders for axis labels and a legend explaining the symbols used to represent different brands or products. Advanced Excel techniques, such as macros or VBA scripts, can automate parts of the process, such as data import and chart customization, further enhancing efficiency.

Consulting firms like McKinsey and BCG often emphasize the importance of leveraging standardized frameworks and templates to ensure that strategic analysis is both rigorous and repeatable. By adopting a similar approach to perceptual mapping in Excel, organizations can ensure that their market analyses are grounded in a consistent methodology, facilitating easier comparison over time and across different market segments.

Learn more about Customer Service Strategic Analysis

Are you familiar with Flevy? We are you shortcut to immediate value.
Flevy provides business best practices—the same as those produced by top-tier consulting firms and used by Fortune 100 companies. Our best practice business frameworks, financial models, and templates are of the same caliber as those produced by top-tier management consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture. Most were developed by seasoned executives and consultants with 20+ years of experience.

Trusted by over 10,000+ Client Organizations
Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.
AT&T GE Cisco Intel IBM Coke Dell Toyota HP Nike Samsung Microsoft Astrazeneca JP Morgan KPMG Walgreens Walmart 3M Kaiser Oracle SAP Google E&Y Volvo Bosch Merck Fedex Shell Amgen Eli Lilly Roche AIG Abbott Amazon PwC T-Mobile Broadcom Bayer Pearson Titleist ConEd Pfizer NTT Data Schwab

Real-World Application and Best Practices

In practice, perceptual maps have been used by a wide range of organizations to guide Strategic Planning and Innovation efforts. For example, a leading consumer electronics company might use perceptual mapping to identify a gap in the market for a high-quality, affordably priced smartphone. By plotting existing products on a map based on price and perceived quality, the company can easily spot the opportunity to introduce a new product that meets these criteria.

Best practices for creating perceptual maps in Excel include using high-quality, representative data and choosing dimensions that are most relevant to your target consumers. It's also important to regularly update your perceptual maps to reflect changes in the market or shifts in consumer preferences. This dynamic approach ensures that your strategic decisions are always based on the latest insights.

Finally, while Excel is a powerful tool for creating perceptual maps, don't overlook the importance of integrating these insights into your broader Strategy Development and Performance Management processes. Perceptual maps should inform product development, marketing strategies, and competitive positioning efforts, ensuring that your organization remains agile and responsive to market dynamics.

By mastering how to make a perceptual map in Excel, C-level executives can equip their organizations with a powerful analytical tool to navigate complex markets, identify strategic opportunities, and outmaneuver competitors with precision and insight.

Learn more about Strategic Planning Performance Management Strategy Development Agile Product Development

Best Practices in Market Research

Here are best practices relevant to Market Research from the Flevy Marketplace. View all our Market Research materials here.

Did you know?
The average daily rate of a McKinsey consultant is $6,625 (not including expenses). The average price of a Flevy document is $65.

Explore all of our best practices in: Market Research

Market Research Case Studies

For a practical understanding of Market Research, take a look at these case studies.

Strategic Market Intelligence Framework for Chemicals Distributor

Scenario: A mid-sized chemicals distributor is struggling to effectively navigate the competitive landscape and respond to rapid market changes.

Read Full Case Study

Market Intelligence Strategy for Cosmetic Firm in Luxury Segment

Scenario: The company is a luxury cosmetics brand operating in a highly competitive sector.

Read Full Case Study

Market Research Strategy Development for a Global Consumer Goods Company

Scenario: A multinational consumer goods manufacturer is facing challenges in understanding and adapting to the rapidly evolving market trends.

Read Full Case Study

Market Analysis for Electronics Firm in Consumer Wearables

Scenario: The company, a mid-sized electronics firm, specializes in the design and manufacture of consumer wearables.

Read Full Case Study

Market Intelligence Framework for Electronics Manufacturer in High-Tech Sector

Scenario: An electronics manufacturing firm specializing in high-tech sensors has noticed a significant lag in responding to market trends, leading to lost opportunities and declining market share.

Read Full Case Study

Market Research Advancement for Luxury Fashion Brand

Scenario: A prominent luxury fashion brand is facing challenges in understanding and adapting to evolving market trends and consumer preferences.

Read Full Case Study

Explore all Flevy Management Case Studies

Related Questions

Here are our additional questions you may be interested in.

How can executives ensure that market analysis effectively informs product development and innovation strategies?
Executives can ensure market analysis informs product development and innovation by integrating it with Strategic Planning, adopting Agile Methodologies, and leveraging Technology and Data Analytics for sustainable competitive advantage and business growth. [Read full explanation]
How can market research be effectively integrated into agile business strategies?
Integrating market research into Agile strategies enhances competitiveness by enabling rapid, customer-focused adjustments in Strategic Planning, Digital Transformation, and Innovation through continuous, collaborative, and data-driven practices. [Read full explanation]
What impact will increasing data privacy regulations have on market analysis techniques and capabilities?
Increasing data privacy regulations drive companies towards ethical, transparent market analysis practices, fostering innovation, consumer trust, and strategic advantage in data management and analysis. [Read full explanation]
How is the rise of artificial intelligence expected to transform market analysis practices in the next 5 years?
Explore how Artificial Intelligence will revolutionize Market Analysis in the next five years, enhancing Efficiency, Predictive Analytics, and Customer Behavior Insights for Strategic Decision-Making. [Read full explanation]
What are the most common challenges companies face in integrating Market Intelligence into their strategic planning, and how can they overcome these obstacles?
Companies face challenges in integrating Market Intelligence (MI) into Strategic Planning due to unclear MI needs, disconnects in decision-making, and issues with data timeliness and accuracy, which can be overcome through strategic alignment, fostering collaboration, and leveraging advanced technologies. [Read full explanation]
How can businesses leverage market research to enhance customer experience and loyalty?
Market research enhances customer experience and loyalty by enabling Segmentation and Persona Development, utilizing Customer Feedback Loops for Continuous Improvement, and leveraging Analytics for Personalized Experiences, fostering satisfaction and long-term loyalty. [Read full explanation]

Source: Executive Q&A: Market Research Questions, Flevy Management Insights, 2024

Flevy is the world's largest knowledge base of best practices.

Leverage the Experience of Experts.

Find documents of the same caliber as those used by top-tier consulting firms, like McKinsey, BCG, Bain, Deloitte, Accenture.

Download Immediately and Use.

Our PowerPoint presentations, Excel workbooks, and Word documents are completely customizable, including rebrandable.

Save Time, Effort, and Money.

Save yourself and your employees countless hours. Use that time to work on more value-added and fulfilling activities.

Read Customer Testimonials

Download our FREE Strategy & Transformation Framework Templates

Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S Strategy Model, Balanced Scorecard, Disruptive Innovation, BCG Experience Curve, and many more.