Multidimensional Scaling for Marketing Analysis - Desklib

Marketing Analysis

Multidimensional Scaling
Multidimensional Scaling (MDS) refers to a class of procedures. It helps to represent the
respondent's perception and the preferences, with the help of a visual display.
The above graph represents the competitive pricing on wearing apparel items. The two
dimensions of the pricing includes, high price and low price. The clothing stores which are
discussed in this graph includes as follows:
1) Blooming dale's
2) Neiman Marcus

3) Talbots
4) Spiegel
5) JC Penney
6) Sears
The stores which are considered as high prices are,
1) Blooming dale's
2) Neiman Marcus
3) Talbots
4) Spiegel
The stores which are considered as low prices are,
1) JC Penney
2) Sears
The above mentioned stores are differentiated based on marketing analysis.
MDS analysis’ main objective is to plotting, so it is also denoted a MDS map. Further, MDS lets
to interpret the matrix which is not similar, on a 2D scatter plot. (Ncss-wpengine.netdna-
ssl.com, n.d.).
MDS is known to be a powerful tool, which supports the market researchers to determine the
brand or the position of the product, or helps to identify the market segments (Babinec, 2008). It
displays the perceived or the psychological relationship among the stimuli, in a geometric
relationships between the points in the multidimensional space. In the above example graph, it is
observed that the respondents considered JC Penney and Sears as low price. However, it
represents that the other stores are quite expensive. From the above graph it is easy to draw
conclusions, related to the difference of prices. Next, the MDS analyst identifies the underlying
factors which the respondents have represented.
MDS is considered as a family with various algorithms which are designed for arriving at an
optimal low-dimensional configuration (p = 2 or 3). The methods of MDS are listed below (Jung
D, 2013):
1) Classical MDS
2) Metric MDS
3) Non-metric MDS