The Application of Multidimensional Scaling (MDS) in National and International Marketing; Part I: Mathematical, Empirical and Processing Procedures

Part I focuses on achieving a practical and comprehensible depiction of the multivariate method ‘multidimensional scaling (MDS)’. These methods play a significant role in professional marketing. The article begins with some examples and classifies the relevant multivariate methods. It then describes the different forms of multidimensional scaling as well as the empirical gathering of ‘similarities’ and ‘preferences’. Subsequently the mathematical approach for developing a multidimensional configuration is explained in which similar objects (e.g. products, consumers) are close together and dissimilar are farther away in the MDS configuration. Next specific questions including the selection and number of objects, choice of dimensionality, and the occurrence of degenerated solutions are discussed. Then the configuration is interpreted based on feature vectors. Finally some suitable computer programmes are presented and possible applications for MDS in marketing are identified. Overall the article clarifies some advantages of MDS, in particular that the method takes global decisions about similarities and preferences without prior instructions. Afterwards these judgements are then interpreted. Consequently a key advantage of this method is that it provides better insight into the heart of the consumer than simple direct methods. Part II addresses the different applications of MDS in marketing. In particular it focuses on the following aspects: image, positioning, market segmentation, identification of salient features, and the resulting marketing actions. In addition the international marketing context is also presented.