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Marketing Mix Modeling 101

Marketing mix modeling is a useful strategy to create multiple streams of advertising for your company. Just as a financial planner has an investment strategy involving stocks, domestic bonds, CDs, and other funds, a marketing firm has a strategy for your advertising dollars. Marketing mix modeling helps you find the "secret sauce."

What Is Marketing?

We've dedicated an entire blog article to this subject because so many marketers have different definitions of what marketing really is in easy-to-digest language. Partner Russ Lange describes marketing as "the sum total of everything a company does, intentionally or unintentionally, that affects current and future customers, competitors, and partners."

Marketing mix modeling focuses on a company's intentional behaviors and activities that influence the way the outside world perceives, judges, and interacts with the brand. Marketing mix modeling is typically used to determine the optimal allocation of the advertising budget, so in this instance, we're looking at marketing avenues that have a calculable ROI.

What Is Mix?

This is the secret sauce. There are all kinds of acronyms that define the elements in the mix. Some marketers call them the four Ps: price, product, promotion, and place. In 1990, Lauterborn wrote an article in Advertising Age describing an updated version of the four Ps, dubbing them the four Cs: Cost, Consumer, Communication, and Convenience, respectively. 

The ingredients in your secret sauce recipe will vary depending on your industry and your goals. CMG susses out the factors that move your revenue needle, so we can determine the ultimate mix for your marketing strategy.

What Is Modeling?

Marketing is both an art and a science, and this is the scientific step in the process. Modeling is a type of statistical analysis that helps to predict future results based on past performances and current situations. These forecasts can then be used to make educated decisions about where to allocate marketing and promotional funds, ultimately determining your "marketing mix."

Our strategic and creative marketing practitioners are here to help you better identify marketing solutions that are right for your business. Don't rely on a one-size-fits-all approach; call us today to realize your market potential.

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Sources:

Investopedia: http://www.investopedia.com/terms/f/four-ps.asp

 

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