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Econometrics in marketing mix modelling

On February 10th, 2013, posted in: Econometric Modelling, Marketing mix modelling by Comments Off on Econometrics in marketing mix modelling

Econometrics in marketing mix modelling

Marketing mix modelling is a widely-used tool to evaluate Return on Investment (ROI) and inform optimal allocation of the marketing budget. Economics and econometrics are a fundamental part of the process.

All marketing mix models are based on microeconomic models of product demand linking business outcomes to marketing investments. It is important to acknowledge the various demand structures available so the best model(s) can be chosen for any particular situation: structures that are appropriate for single product or brand studies for example are often not suitable for holistic category management analysis. Read more »

Long-term marketing effects

On February 6th, 2013, posted in: Long-term marketing by Comments Off on Long-term marketing effects

Long-term marketing effects

Quantification of long-term marketing effects is often considered the holy-grail of marketing analysis – as a recent article highlights: Long-term marketing: a new paradigm shift.

Marketing effectiveness and ROI are typically evaluated using marketing mix modelling. Conventional approaches in the industry focus solely on incremental volumes, providing insight into short-term ROI only. As such, they often lead to marketing budget allocations biased towards promotional activity: short-run sales respond well to promotions, yet are less responsive to media activity – particularly for established brands. This, however, ignores the longer-term perspective: that is, the potential brand-building effects of successful media campaigns on the one hand and the brand-eroding impacts of heavy price discounts on the other. Acknowledging and quantifying these features is crucial to a complete ROI evaluation and a more strategic budget allocation. Read more »

New Website Launched

On October 8th, 2012, posted in: Econometric Modelling, Market Science, Time Series Data in Economics by Comments Off on New Website Launched

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