Marketing is a broad topic that covers a range of aspects, including advertising, public relations, sales and promotions. Strategies in marketing have changed enormously. Tactics that were considered radical earlier are almost main stream now. With so many messages bombarding the consumer in the marketplace today, it is now more difficult than ever to get your product noticed, so marketers have learned to be creative. Companies without a marketing mindset are at a disadvantage in today’s business world.
Marketing can be done in a number of ways via various marketing channels but choosing an optimum marketing channel is not an easy task. Data Analytics has proven to be a very useful tool for the companies to identify the right marketing channels and optimize their marketing spends with increase in ROI. Companies are spending up to 40 per cent of the top-line sales on such marketing activities. Mathematical data modeling can help increase efficiency of this spend by up to 30 per cent. With the increasing number of channels to advertise their brands, marketing managers are facing huge challenges identifying the right mix of channels for advertisement.
Marketing Mix Modeling (MMM) is an analytical approach that uses past data to quantify the sales impact of various marketing activities. Mathematically, this is done by establishing a simultaneous relation of various marketing activities with sales in the form of a linear or a non-linear equation, through the statistical technique of regression.
Marketing Mix Modeling defines the effectiveness of each of the marketing elements in terms of its contribution to sales-volume, effectiveness, efficiency (volume generated by each rupee spend) and ROI (return of investment). This learning is then adopted to adjust marketing tactics and strategies, optimize the marketing plan and also to forecast sales while simulating various scenarios.
Few niche analytics service providers such as Fractal Analytics have helped their clients increase their marketing ROI with the help of their Marketing Mix Modeling solutions. Marketing Mix Modeling solutions helped them identify the right mix of channels for advertising and hence enable them to make better business decisions in terms of allocating marketing spend and media planning not just allocation to various channels of marketing but also the allocation to each channel across time periods. The impact of pricing and distribution can also be gauged through Marketing Mix Modeling, which helps managers identify the optimal price against competition and the right markets to be present in with optimal spread and the optimal number of items.
Please refer below for case studies on Marketing Mix Modeling:
Get the mix right
Promotion analysis enables CPG company to increase promotions effectiveness by 25%
CPG brands uses marketing mix modeling to increase revenues by 5% while staying spend netural
Tags: CPG Marketing, Forecast Sales, Fractal Analytics, Improve sales, Marketing Channels, Marketing Mix, Marketing Mix Modeling, Marketing Mix Models, Marketing ROI, Marketing Spend, Optimize Marketing Spend, Retail Marketing
