Marketing Mix Modeling (MMM) is a science whose central point is to evaluate the performance of Marketing actions. Through it, it is possible to understand, for example, how the economy, promotions and competition impact sales.
Marketing Mix (MM) emerged in history in 1949 through the initiative of the American advertising professor, Neil Hopper Borden (1895-1980). Borden is also the one who coined the term "Marketing Mix," which refers to the 4Ps of Marketing (Product, Price, Place, and Promotion).
With MMM it is possible to measure the sales performance of businesses such as your e-commerce. Indeed, it allows identifying which Marketing actions generate better results. That way, you can reallocate your budget to the most efficient actions.
Be that as it may, MMM requires four steps to put it into practice. Basically, you need to collect, model and analyze the information. Then you extract insights from that data, which will help you to optimize what you need. Keep reading to find out more!
MARKETING MIX MODELING IN FOUR STEPS
To apply Marketing Mix Modeling and thus measure the results of your advertising, take into account:
1 - Collect :
Collect all possible data about your processes, products, prices, place and promotion, etc. Keep a history of sales and internal data about your company.
2 – Modeling :
Insert your data into data modeling tools. Then create models or scenarios that explain your company's sales volume and value trends.
3 – Analyze :
Right after creating models or scenarios, you can determine the efficiency of each Marketing action for the sales volume.
4 – Optimize :
With the insights gained from the analyses, a Marketing manager can optimize his company's Marketing actions. It is possible, for example, to reallocate budgets and plan long-term actions.
MMM ADVANTAGES
With Marketing Mix Modeling it is possible, above all, to:
- Demonstrate the historical efficiency of Marketing actions in your company;
- Check the impact of each Marketing action on your sales;
- Identify the most efficient Marketing actions;
- Think of the Marketing budget for each period of the year;
- Reallocate Marketing budgets to more promising actions;
- Simulate Marketing scenarios to predict trends.
As you can see, MMM is a powerful science that can be used alongside other marketing performance measurement techniques in companies. Therefore, it's worth applying to your e-commerce environment.
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