https://hbr.org/2015/06/a-better-way-to-map-brand-strategy

“The Problem”

“Companies have long used perceptual maps to understand how consumers feel about their brands relative to competitors’ and to develop brand positions. But their business value is limited because they fail to link a brand’s position to market performance metrics. Other marketing tools measure brands on yardsticks such as market share, growth rate, and profitability but fail to take consumer perceptions into consideration.”

“The Solution”

“The C-D map links perception and performance in a new way. It shows brands’ relative position in the marketplace according to perceived “centrality” (how representative a brand is of its category) and “distinctiveness” (how well it stands out from other brands). It also captures financial performance along a given metric, such as sales volume or price.”

“The Implications”

“Marketers have always had to juggle two seemingly contradictory goals: making their brands distinctive and making them central in their category. Central brands, such as Coca-Cola in soft drinks and McDonald’s in fast food, are those that are most representative of their type. They’re the first ones to come to mind, and they serve as reference points for comparison. These brands shape category dynamics, including consumer preferences, pricing, and the pace and direction of innovation. Distinctive brands, such as Tesla in cars and Dos Equis in beer, stand out from the crowd and avoid direct competition with widely popular central brands.”

“Striking the right balance between centrality and distinctiveness is critical, because a company’s choices influence not just how the brand will be perceived, but how much of it will be sold and at what price—and, ultimately, how profitable it will be. And yet, marketers have lacked the tools needed to get this balance right. Traditionally, companies have analyzed brand positioning and business performance separately: To locate gaps in the market and gauge how people feel about their brands, marketers have used perceptual positioning maps, which typically represent consumers’ perceptions of brands or products on opposing dimensions, such as budget versus premium or spicy versus mild.”

“In this article, we present a new approach called the centrality-distinctiveness (C-D) map, which to our knowledge is the first tool that allows companies to directly connect a brand’s position on a perceptual map with business outcomes such as sales and price. Using the tool, managers can determine a desired market position, make resource allocation and brand strategy decisions, track performance against competitors over time, and evaluate strategy on the basis of results.”

“Positioning and Performance

Creating a C-D map of a brand category is a straightforward but labor-intensive process. A company begins by identifying the geographic market of interest (an entire country, a region, a single city) and the customer segments to be surveyed. As we will discuss, a brand’s position on the map can vary dramatically depending on those variables. The company then conducts a survey to collect data on consumers’ perceptions of the brand’s centrality and distinctiveness (scored on a 0–10 scale). This data yields unique coordinates for each brand’s position on a 2×2 matrix. The map also captures market performance: The “bubble” for each brand is sized proportionally to its unit sales volume, price, or other metric. (See the exhibit “The Centrality-Distinctiveness Map.”)

By focusing on centrality and distinctiveness—dimensions that, unlike narrow product characteristics, apply to brands in all categories—companies can make comparisons across categories and geographies. Where a brand falls on the map has implications for sales, pricing, risk, and profitability. Marketers can also make important strategic assessments such as “This market is more crowded with distinctive brands than that one.””

“Two Case Studies”

“Aspirational brands—those that fall into the upper-right quadrant—are highly differentiated but also have wide appeal. For cars, this quadrant accounts for a solid 30% of unit sales and contains powerhouse brands such as Mercedes and BMW. For beer, this quadrant accounts for the lion’s share of sales (62%) and includes strong performers such as Heineken and Sam Adams. These high-distinctiveness brands tend to command higher prices than brands that score low on this dimension”

“Brands that have wide appeal but low distinctiveness fall into the lower-right quadrant. These mainstream brands tend to be the first that come to mind when consumers think of the category. Their lack of distinctiveness reduces their pricing power, but they are very popular and most often chosen by consumers.”

“Peripheral brands have little to distinguish them. They are unlikely to be top of mind or the first choice for most consumers. Examples in the lower-left quadrant include Kia and Mitsubishi for cars and Old Milwaukee for beer. Despite their low prices and lack of distinctiveness, many peripheral brands clearly succeed in this seemingly unattractive position; they account for 24% of car sales and about 15% of beer sales.

In the upper-left quadrant are unconventional brands—those with unique characteristics that distinguish them from traditional products in the category. Think of Tesla, Mini, and the Smart car, each of which departs in some way from the standard view of a “car.” Among beers, Dos Equis and Stella are both unconventional in the U.S. market. The low share of sales of brands in this quadrant (about 2% to 4%) suggests, as you might expect, that this is a niche strategy.”

“Now let’s consider how centrality and distinctiveness affect business performance on two key metrics—sales volume and price—in the categories we studied.”

“Sales volume.”