Importance-Performance Analysis (I-P)
I-P analysis is a method for measuring attribute importance and performance and applying the results to
management decisions - in particular product development/positioning. It was first proposed by Martilla
and James in a 1977 Jounal of Marketing article and has since been applied in a variety of settings.
I-P is both a measurement tool and a simple system for interpreting and applying the findings using the IP
action grid.
Approach: Importance and performance ratings for a set of product or service attributes are gathered,
usually from customers, in a written survey using Likert-type scales. Means or median rating on each
attribute are plotted and the results interpreted using 4 quadrants of the "action grid".
Very Important
Concentrate Here
Low
Performance
Low Priority
Keep up the Good
Work
High
Performance
Possible Overkill
Not important
Concentrate Here: Attributes with high importance but low performance
Keep up the Good Work : High in both importance & performance
Low Priority : Low performance and importance
Possible overkill: High performance but low importance to customer
Steps to conduct an I-P analysis
1. First define product and relevant population to do ratings
2. Identify a set of product attributes - based on prior research, focus groups, or judgment
3. Write the I-P questions and scale to be used - should separate I from P on questionnaire
4. Draw sample of subjects and administer the survey
5. Compute means and medians on each attribute for I and P
6. Plot means or medians on action grid
7. Decide on position of cross-hairs/ axes that separate the four quadrants
8. Analyze grid and determine marketing strategies
Other Points: Whenever you base decisions on group averages, beware of tailoring decisions to an
"average customer that does not exist". Use of averages implies scores are distributed normally around the
mean. If ratings are bi-polar (half rate very good, half terrible) then you have two distinct market segments.
In this case, do separate I-P analyses for distinct subgroups of customers and develop a segmented market
strategy. Method also assumes customers are rating a somewhat uniform product or service. In the West
Virginia State Park Cabin analysis is product uniform? The customers? How would you modify that study?