Learn something new every day
More Info... by email
Marketing mix modeling has to do with the strategy of evaluating the impact of the use of different types of marketing approaches or models in terms of the amount of sales revenue that is generated. The idea is to determine if the current mix of approaches employed to reach consumers and prompt them to buy products is resulting in a reasonable amount of returns when related to the expenses involved. Using this strategy of marketing mix modeling can make it possible to identify while aspects of the modeling are working according to expectations, and which aspects need to be replaced or reworked in order to produce more desirable results.
With marketing mix modeling, the focus is on determining what sales approaches are benefiting the business in terms of increasing sales. There are a number of different methods that may be included in the basic model, ranging from the use of coupons in a direct mail campaign, short-term price reductions as part of a promotional campaign, and even the use of telephone and Internet sales campaigns as a means of boosting business volumes. The idea is to identify the most effective mix of marketing models for the business, usually by allowing for what types of advertising and promotions are likely to attract attention from the desired consumer markets.
As part of the process, marketing mix modeling will look at each component in the model as well as the overall effectiveness of the combined methods. This allows the business owner to see if the model in general is providing some benefit, while also making it possible to track what each component is adding to the overall returns generated. Doing so makes it possible to consider making adjustments to the model in order to create a mix that is even more effective. For example, if a bakery finds that the current mix of newspaper, radio, and television advertising is stimulating sales, but that most of the business generation is coming from the newspaper and radio advertising, a decision may be made to reduce the number of TV commercials purchased and buy additional radio time in strategic time slots. Alternatively, the newspaper ads may be ran more frequently, or the business may choose to advertise in a local weekly or monthly magazine rather then continuing to utilize the less effective television advertising.
Overall, marketing mix modeling is all about developing the ideal mix of advertising and promotional approaches that will allow a business to achieve its sales goals. This process is ongoing, since changes in the economy and the effects on consumer tastes and demands will often require changing the advertising strategies to reach additional consumer markets. For this reason, many companies review their marketing mixes regularly, and make changes when and as necessary.