Marketing Mix Modelling
- What is it?
The purpose of using Marketing Mix Modelling is to establish the Marketing Return on Investment (MROI) of each marketing input element, in terms of its contribution to sales, and establish an order of priority for spending decisions.
- When is it used?
Marketing Mix Modelling can be used as a continuous input to decision making, or it can be a periodic, recurring activity undertaken by brands. It covers all relevant (and available) input elements – from traditional spending heads like TV, Print, Radio etc. all the way to digital media spends, promotional activities and trade push, PR and CRM data, pricing and distribution changes, to diagnose impact on sales. Periodicity of Marketing Mix Modelling depends upon the importance of decisions at hand, as well as the increasing complexity of input allocation requiring data-based decisions.
- What are the Benefits?
Marketing Mix Modelling allows data-based decision-making on budget allocation in favour of the most effective inputs with higher MROI. The output from Marketing Mix Modelling exercise is essential input for scenario building and sales forecasting. Marketing Mix Modelling also helps understand relationships between different input elements, and their attribution to sales.