Context and Challenge:
Our client in the Food and Beverage Company has a portfolio of brands, including both established and newer brands. Each brand has its own marketing budget, which is allocated across various media channels. The company has noticed that some of its brands are underperforming and not meeting their sales targets, while others are outperforming expectations. The company wants to optimize its advertising and promotional investments to better drive sales and growth for all of its brands.
To better allocate advertising and promotional investments between brands and between media, the company could use marketing mix modeling. This approach involves analyzing data on sales, marketing, and economic factors to understand how each element of the marketing mix (product, price, promotion, place) contributes to brand performance.
The company will first gather data on its sales, marketing, and economic factors for each brand and media channel. This will include data on brand and product characteristics, price, promotion (including advertising and other promotional activities), distribution, and external factors such as competition and economic conditions.
Next, the company will use statistical analysis to model the relationship between these factors and brand performance. This will allow the company to understand which elements of the marketing mix are most effective at driving sales for each brand.
Finally, the company will use this information to optimize its advertising and promotional investments for each brand. This may involve shifting budget from underperforming media channels to more effective channels, or increasing investments in certain promotions or marketing activities that have been shown to drive sales.
Using marketing mix modeling, our client was able to optimize its advertising and promotional investments and drive better sales and growth for all of its brands. Specifically, the company was able to:
1. Identify which media channels were most effective at driving sales for each brand, and allocate its budget accordingly
2. Increase investments in promotions and marketing activities that had a strong impact on sales
3. Shift budget away from underperforming media channels and towards more effective channels
4. Achieve an overall increase in sales and growth for all of its brands