Tuesday, 11 September 2012

GroupA_Operations_Session9/10

Multidimensional Scaling

Multidimensional scaling (MDS) is a series of techniques that helps the analyst to identify key dimensions underlying respondents’ evaluations of objects. It is often used in Marketing to identify key dimensions underlying customer evaluations of products, services or companies.

Once the data is in hand, multidimensional scaling can help determine:
What dimensions respondents use when evaluating objects
How many dimensions they may use in a particular situation
The relative importance of each dimension, and
How the objects are related perceptually

The purpose of MDS is to transform consumer judgments of similarity or preference (eg. preference for stores or brands) into distances represented in multidimensional space.
The resulting perceptual maps show the relative positioning of all objects. Multidimensional scaling is based on the comparison of objects.
Any object (product, service, image, etc.) can be thought of as having both perceived and objective dimensions. For example, a firm may see their new model of lawnmower as having two color options (red versus green) and a 24-inch blade. These are the objective dimensions. Customers may or may not see these attributes. Customers may also perceive the lawnmower as expensive-looking or fragile, and these are the perceived dimensions.

The dimensions perceived by customers may not coincide with (or even include) the objective dimensions assumed by the researcher.
The evaluations of the dimensions may not be independent and may not agree. For example, one soft drink may be judged sweeter than another because the first has a fruitier aroma, although both contain the same amount of sugar.

Steps for Designing Multidimensional Scaling
     
Step 1: Objectives of Multidimensional Scaling
Perceptual mapping, and multidimensional scaling in particular, is most appropriate for achieving two objectives:
1. As an exploratory technique to identify unrecognized dimensions affecting behavior
2. As a means of obtaining comparative evaluations of objects when the specific bases of comparison are unknown or undefinable
The strength of perceptual mapping is its ability to infer dimensions without the need for defined attributes. In a simple analogy, it is like providing the dependent variable (similarity among objects) and figuring out what the independent variables (perceptual dimension) must be.
The researcher must define a multidimensional scaling analysis through three key decisions: selecting the objects that will be evaluated, deciding whether similarities or preference is to be analyzed and choosing whether the analysis will be performed at the group or individual level.

Identification of All Relevant Objects to Be Evaluated
The most basic, but important, issue in perceptual mapping is the definition of the objects to be evaluated. The researcher must ensure that all “relevant” firms, products/services or other objects be included, and that no “irrelevant” objects are included, because perceptual mapping is a technique of relative positioning.

Similarity versus Preference Data
To this point we have discussed perceptual mapping and MDS mainly in terms of similarity data. In providing preference data, the respondent applies “good-bad” assessments, where we assume that differing combinations of perceived attributes are valued more highly than others. Both bases of comparison can be used to develop perceptual maps, but with differing interpretations.

Aggregate versus Disaggregate Analysis
In considering similarities or preference data, we are taking respondent’s perceptions of different stimuli / treatments and creating outputs of the proximity of these treatments in t dimensional space. The researcher can generate this output on a subject-by-subject basis (producing as many maps as subjects), known as disaggregate analysis.
Aggregate analysis.
If the focus is on an understanding of the overall evaluations of objects and the dimensions employed in those evaluations, an aggregate analysis is the most appropriate. But if the objective is to understand variation among individuals, then a disaggregate approach is the most helpful.

Step 2: Research Design of MDS
Perceptual mapping techniques can be classified by the nature of the responses obtained from the individual concerning the object.
One type, the decomposition method, measures only the overall impression or evaluation of an object and then attempts to derive spatial positions in multidimensional space reflecting these perceptions. The compositional method is an alternative method in which a defined set of attributes is considered in developing the similarity between objects.
Decompositional techniques are typically associated with multidimensional scaling and so our focus will be primarily on these methods.

Similarities Data
When collecting similarities data, the researcher is trying to determine which items are the most similar to each other and which are the most dissimilar. Three procedures commonly used to obtain respondents’ perceptions of similarities are outlined below
Comparison of Paired Objects:
By far the most widely used method of obtaining similarity judgments, the respondent is asked simply to rank or rate the similarity of all pairs of objects.
Confusion Data:
 The pairing (or “confusing”) of stimulus I with stimulus J is taken to indicate similarity. Also known as subjective clustering, the typical procedure for gathering these data is to place the objects whose similarity is to be measured (eg. ten candy bars) on small cards, either descriptively or with pictures. The respondent is asked to sort the cards into stacks so that all the cards in a stack represent similar candy bars. The data result in an aggregate similarities matrix similar to a cross-tabulation table.
Preference Data
Preference implies that stimuli should be judged in terms of dominance relationships – that is, stimuli are ordered in terms of the preference for some property.
Direct Ranking:
Each respondent ranks the objects from most preferred to least preferred, as in the following example: Rank from most preferred (1) to least preferred (4)
_____ Candy Bar A
_____ Candy Bar B
_____ Candy Bar C
_____ Candy Bar D

Paired Comparisons: A respondent is presented with all possible pairs and asked to indicate which member of each pair is preferred, as in this example:
Please circle the preferred candy bar in each pair:
A B
A C
A D
B C
B D
C D
Preference data allows the researcher to view the location of objects in a perceptual map where difference implies differences in preference.
If there are n elements to compare then we have n*(n-1)/2 pairs to compare


Ashitosh Mohite
14012

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