Have you ever seen a chart similar to mosaic tiles – the one that appears like a grid with different widths and heights? Wondered what it is and how it is used? Well, these are Marimekko Charts, also known as Mekko charts, and they are widely used in consultancy and business. Let us understand them in detail in this article!
What is a Marimekko Chart?
A Marimekko chart is a visualization tool that uses a combination of bar charts and stacked bar charts. It shows data composition across two variables and strategically allows data interpretation.
The chart represents values using the width and height of each segment, where the width of a column signifies one categorical variable, and the height of the segments within each column represents a second categorical variable. It allows for an intuitive representation of proportions and relationships between different groups or categories in a dataset. Marimekko charts are particularly useful in market analysis, where they can display market share across segments or compare product categories.
The unique ability of these charts to convert multidimensional data into a bird’s eye view makes them a preferred choice for visualization. They are widely used in finance, analysis, statistics, etc.
Marimekko Chart: History and Origin
Marimekko charts were developed by Finnish economist and statistician Arvo A. Aho during his intensive investigation of market share and segmentation. Aho wanted to develop a tool that represented the distribution of data across both dimensions and was easy to understand. He wanted viewers to know how one set of categories was distributed within another, providing a detailed view of data segmentation.
Over the years, this chart was seen as an asset by organizations and gained traction in the late 20th century as business analytics became more advanced and the need for multifaceted data visualizations increased.
When Should You Use a Mekko Chart?
1. To Spot Trends
Mekko charts are excellent for spotting trends and identifying patterns in certain data. By adjusting the width of the columns and height of the individual sections, you can see how trends evolve over a particular period of time and differ across various dimensions. This format makes it easy to find the segments that are growing or shrinking and helps analysts and businesses foresee the future.
For instance, in product analysis, Mekko charts can show how specific product categories have increased their market share over the years and those that have declined. This ability to showcase multidimensional data within a single chart provides a clear, quick view of overarching trends.
2. Evaluate Financial Metrics
Mekko charts provide an excellent way to showcase financial metrics such as profitability, revenue growth, return on investment, etc., across various business units. The ability to represent both the size of a financial metric (e.g., revenue) and its composition (e.g., expenses or profits) in one visual allows decision-makers to grasp the overall financial health of an organization.
Let us understand with the help of an example. Consider you run a business and need to analyze the revenue and costs of various business units. By using a Mekko chart, you can show how much revenue each unit generates and illustrate the proportion of costs associated with it. It would quickly give you a perspective of which departments yield the most profit and help in better decision-making.
3. For Market Segmentation
We live in an era of fleeting competition, and the businesses that survive are the ones that understand their market in the best possible manner. Thus, organizations can gain stunning competence using Mekko charts to fathom their market segmentation.
For example, Mekko charts can be used to understand the relation between consumer age groups (represented by the width of the column) that contribute to sales across various product categories (shown by the height of segments). This layered representation helps businesses target specific segments more effectively and tap into unseen opportunities.
Best Practices for Creating a Mekko Chart
a). Use a Consistent Color Scheme
Use consistent color schemes throughout the chart. It means assigning specific colors to each category and variable to avoid confusion. A proper and cohesive color scheme ensures your chart is visually appealing and understandable.
b). Label the Axes and Segments Correctly
Proper labeling and annotations are extremely vital for a Mekko chart, as viewers should be able to understand the data in the blink of an eye. If your horizontal and vertical axis are not labeled properly, it can lead to ambiguity and cause confusion.
c). Use Templates
Making Mekko charts from scratch can be quite tedious. It can feel highly burdensome and tiring to craft each element from the beginning and arrange elements to create a stunning chart.
You can use an easy-to-use Mekko Chart presentation template that can be edited to align with your presentation requirements. This not only saves you time but also ensures your visuals are crafted to perfection and look professional.
Limitations of a Mekko Chart
(i). Complicated to Use
Mekko charts can be quite complicated to use and understand, especially if you are a beginner or have no experience using multi-dimensional data visuals. The need to represent two variables simultaneously might create complexities and make it difficult for you to understand them.
(ii). Misinterpretation of Data
Without proper annotations and highlighting, it is quite common to misinterpret data in Mekko charts. Viewers might misunderstand certain values and compare data without complete knowledge. It can lead to immense complications, especially when greater numbers are at stake.
(iii). Time-Consuming
Creating a Mekko chart requires a lot of time and effort. Whenever the data sets are enormous, more than one person may be required to complete the task, as it involves arranging data, planning, adjusting the columns, designing, etc.
(iv). Not Suitable for Continuous Data
Mekko charts are best suited for categorical data and can struggle when representing continuous data. The inherent structure of the chart, which divides data into distinct categories, makes it difficult to convey smooth transitions or relationships between continuous variables.
Key Takeaways
While using Mekko charts might initially seem complicated, they can elevate your business. To master this visualization tool, it is vital to understand its pros and cons and follow the best practices mentioned in the article. We hope it helps you create your next Mekko chart perfectly!