Dynamic Marketing Mix Modeling In Global Electronics

  • September 18, 2020
  • Case Studies
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BaseDynamics Marketing Mix Modeling & Optimal Budget Allocation

Challenge

  • A global electronics brand was a pioneer in manufacturing LED HD TV panels and wanted to understand the effectiveness of their marketing budget that covered in-store merchandising, pricing offers and a wide range of off and online media investments. ​​
  • They were particularly interested into the short-and long-term impact of their marketing activities and how to strategically balance both.​​
  • Building on the results, the brand then wanted to optimize spend over the next series of innovation planning cycles and forecast future sales performance.​​

Solution

  • To answer these questions, the client leveraged the Marketscience BaseDynamics marketing mix modeling approach, combining regression with the power of time series econometrics.
  • Marketscience managed a rigorous data collection program to amass five years of daily marketing spend, sales, in-store and consumer experience tracker data covering both the current and prior product innovations. ​
  • The Dynamic MMM model identified the marketing tactics that had either a short- or a long-term impact and also identified those that impacted both, for the following activities:
    • Point of sale marketing
    • Online paid search, social, display advertising and video
    • Traditional offline TV and print media
    • Pricing & promotions

The insights were then used to make recommendations on future budget optimizations and forecast likely sales outcomes.

Results

We provided the brand with:

  • A clear ranking of marketing initiative effectiveness based on historical ROIs
  • Granular understanding of which marketing configurations - timing, spend amounts, media types - drove the best short- and long-term returns
  • Optimization of marketing budgets for the upcoming year resulting in ~10% increase in revenue for the same marketing budget
  • Drivers of brand evolution and a clear view into how consumer brand perceptions and experience drives long-term brand performance
  • Sales forecasts simulating the impact of alternative levels of media and promotional investments. This allowed our client to optimally manage product inventory, facilitating the supply chain planning process

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