How Marketing Mix Modelling(MMM) help improve sales of a major FMCG brand by 8%

Marketing Mix Models(MMM) can be deployed to improve the efficiency of the entire gamut of marketing inputs such as price, advertising, promotions and product introductions. By estimating the impact of these inputs with time series data,the complex input- output relationships in marketing can be revealed, helpingmanagers take informed data based decisions.

A top FMCG brand inthe food space felt that rather than continue with business as usual andsetting budgets and marketing costs on historical understanding, they wouldlike to use their data assets to improve the effectiveness of marketing spends,both ATL and BTL. Given that this brand operates in a large number of markets,with regional differences, the task was to build models at a market level withall key inputs that drives their sales. Over 14 different Marketing Mix Models(MMM) were built and the final recommendation was to change the ATL/BTL mix inATLs favour, focus on growth markets where the ROI was more robust and alsosuggested a mix of different sub- brands by market. 

Specifically, whilespend was reduced on BTL, most of the cuts were made in the activities thatwere either not working or returning a very poor ROI. This meant that thereduction in sales from the axed BTL activities was minimal and in some cases,there was zero reduction as these activities were actually redundant. The moneythus saved was redeployed into much more effective channels including TV advertising, which had been neglected to an extent. Specific media plans weresuggested for the mother brand and the sub-brand ensuring that spends are abovethe threshold level – and this lead to more visibility for the campaigns and ahigh uptick in sales. The media recommendation also suggested specific TVchannels to be used and also the scheduling of spends. 

The net result was a high growth in sales – more than double that ofearlier years – all achieved without a change in budgets. Marketing mix modeling can also be used to drill down at a more granular level – for example – different genresin TV such as news, sports or general entertainment, leading to a furthersharpening of media strategy. Now MMM is de-rigour for brands in the B2C space, looking at marketing their wares in an increasingcompetitive and complex markets.

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