This is a relatively simple statistical procedure which can be done with the Analyst's Pack for Microsoft Excel or through the use of SAS or SPSS as well. The final step is to draw a map by plotting the position of every product in the market you've selected by its price on one access and level of primary benefit on the other. Drawing a line between these coordinates defines the segmentation graphically and provides insight into how one series of products compare to another.

Implications

As with most graphically oriented analytical approaches to defining differentiation, this cannot be used in isolation; it must be included as part of a broader set of analyses to measure the relative strengths and weaknesses of specific products and segment. The level of profitability and profit potential, (sometimes called profit pools) is also not specifically...

Yet for an analysis of what differentiates one segment of a broader market from another, this inexpensive and quickly implemented methodology can be effective.
Summary

Most attuned to commoditized market where segmentation is critical, this approach to defining differentiation in markets can be useful for defining feature sets to differentiate products in the mid- and end stages of their lifecycles. For new market development and new venture development, much greater depth of analytics are required, specifically focusing on profitability potentials as well.

Reference: (D'Aveni, 2007)

Richard a D'Aveni (2007, November). Mapping YOUR Competitive Position. Harvard Business Review, 85(11), 110-120. Retrieved December 14, 2008, from ABI/INFORM Global database. (Document ID: 1370899991).