Multidimensional scaling (MDS) is a technique used to visualize the similarity or dissimilarity of observations in a geometric space. It can be applied to image measurement, market segmentation, new product development, advertising effectiveness, pricing analysis, channel decisions, and attitude scale construction. MDS involves collecting similarity judgments or preference rankings between items and representing them as points in a multidimensional space. The stress value indicates how well the points fit in the space, with lower values indicating a better fit. The spatial map can be interpreted to understand competition between brands and identify opportunities.

1. Multidimensional Scaling

2. MDS can be used to measure
• Image measurement
• Market segmentation
• New product development( positioning)
• Assessing advertising effectiveness
• Pricing analysis
• Channel decisions
• Attitude scale construction

3. Terms associated with MDS
• Similarity judgments : between all possible pairs
using a likert type scale
• Preference rankings: most to least preferred
• Stress: Lack of fit. Higher values lower fit
• Spatial Map: geometric relationships in a
multidimensional space
• Coordinates
• Unfolding : representation of both brands and
respondents as points in the space is unfolding

4. Formulation of Problem
• Purpose for which MDS would be used.
• here we can go for brands or attributes
• Brand of tooth paste: crest, Colgate, aqua
fresh, aim, closeup n(n-1)/2 [Comparatively
easy]
• Attribute: whitening of teeth, tooth decay,
pleasant taste etc

5. Select a MDS procedure
• Non metric MDS(ordinal)
• Metric MDS(interval or ratio)

6. Deciding on number of dimensions
• Stress is the deciding factor
• Ease of use

7. Label and interpret the configuration
• By examining the coordinates and their
relative positions of brands
• Brands located near compete fiercely
• Brands farther along descriptor are strong
• Gaps indicate potential opportunities
• Higher Rsquare is desirable. More than 0.6

8. Interpreting TV brands
• Tables representing 3-dimension, 2-dimension
and 1-dimension data
• Stress score
3-dimension: 0.05230(best one)
2-dimension: 0.24015
1-dimension: 0.43159
Since 8 brands so we can go for 3 dimension but if
12-15 brands we can go for higher dimensions

9. • Dimension 1 : Value for money(var 6, var1 &
var5)
• Dimension 2: After sales(var7, var 2
• Dimension 3: current brand image( var2 &
var8)
( judgment, knowledge or data generated
market survey)