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Describes the uses and advantages of perceptual mapping, a consumer‐based modelling technique having both diagnostic and strategic applications, particularly in determining the threat posed by substitute products and in developing competitive strategies. Uses a case study approach of analysing companies in traditional manufacturing industries who are attempting to move from basic commodities to faster growing“value‐added” products. Concludes that perceptual maps are effective in developing new products and product positioning and can be easily used by managers in developing actions.

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