Market Mix Modeling (MMM) is a cornerstone of marketing ROI analysis. However, traditional MMM approaches often struggle to accurately capture the complexities of the Health & Beauty (H&B) industry. This article explores these challenges and introduces Data POEM, a solution that can significantly enhance MMM for H&B clients.
Challenges of Traditional MMM in H&B
- Promotional Fluctuations: H&B brands heavily rely on promotions and discounts. Traditional MMMs struggle to isolate the true impact of promotions from underlying seasonal trends.
- Short-Term Effects: H&B products often see immediate purchase decisions due to impulse buying or immediate need. This makes it difficult to distinguish short-term effects from long-term brand-building efforts.
- Cannibalization: Promotions can cannibalize sales from other products within the same brand. Traditional MMMs may misattribute this internal shift to marketing initiatives.
- New Product Launches: The H&B industry is known for frequent new product launches. Traditional MMMs can struggle to account for the initial hype and isolate the long-term impact of these launches.
Data POEM: A Solution for H&B MMM
Data Promotion Elasticity Optimization Model (Data POEM) is a novel approach that addresses the limitations of traditional MMM in the H&B space. Here's how Data POEM can augment current MMM services:
- Advanced Promotional Modelling: Data POEM incorporates advanced techniques to account for promotional activity, differentiating short-term effects from long-term brand impact.
- Shorter Time Horizons: By acknowledging the immediate decision-making in H&B purchases, Data POEM can analyze data on shorter time horizons, providing a more accurate picture of marketing effectiveness.
- Cannibalization Analysis: Data POEM explicitly considers cannibalization effects, separating the impact of promotions on a specific product from sales cannibalized from other products within the brand.
- New Product Launch Modelling: Data POEM can account for the temporary sales surge associated with new product launches, isolating their long-term impact on the brand and the category.
By incorporating Data POEM into their MMM services, H&B companies can expect:
- More Accurate Measurement of Marketing ROI: A clearer picture of the true impact of marketing initiatives on sales, promotions, and brand building.
- Improved Marketing Mix Optimization: Data-driven insights to optimize marketing budgets and channel allocation for better returns.
- Enhanced New Product Development: A deeper understanding of how new product launches affect overall sales and brand perception.
Traditional MMMs can provide valuable insights but fall short in the dynamic H&B landscape. Data POEM offers a powerful solution, enabling H&B companies to leverage MMM for a more accurate understanding of marketing effectiveness and achieve superior marketing ROI.
For more info contact Book an appointment
