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Nonmetric Unfolding of Marketing Data: Degeneracy and Stability

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  • van de Velden, M.
  • de Beuckelaer, A.
  • Groenen, P.J.F.
  • Busing, F.M.T.A.

Abstract

Nonmetric unfolding is a powerful (nonparametric) analytical tool generating a preference-based joint display of subjects (e.g., customers) and objects (e.g., brands or products). Systematic patterns in customers’ preferences can be directly inferred from this display, and may provide valuable input for making important marketing decisions such as deciding what new product to launch. Unfortunately, nonmetric unfolding frequently produces degenerate unfolding solutions (i.e., unfolding solutions showing close-to-perfect model fit irrespective of the data analyzed). As a degenerated display shows ill-positioned customers and brands/products, the chance of making an incorrect marketing decision (e.g., launching the wrong product) is very high. To solve this problem adequately, we combine bootstrapping with penalized nonmetric unfolding (Prefscal) to obtain an accurate, nondegenerate and stable unfolding solution.

Suggested Citation

  • van de Velden, M. & de Beuckelaer, A. & Groenen, P.J.F. & Busing, F.M.T.A., 2011. "Nonmetric Unfolding of Marketing Data: Degeneracy and Stability," ERIM Report Series Research in Management ERS-2011-006-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    • Handle: RePEc:ems:eureri:22725
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    References listed on IDEAS

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    Cited by:

    1. Lam, K.Y. & van de Velden, M. & Franses, Ph.H.B.F., 2011. "Visualizing attitudes towards service levels," ERIM Report Series Research in Management ERS-2011-022-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.

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    More about this item

    Keywords

    bootstrap analysis; customer preference modeling; nonmetric multidimensional unfolding; perceptual mapping;
    All these keywords.

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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