Case Overview

A hair care product client achieved marketing spend effectiveness using market mix modeling (MMM).

The hair care brand had a variety of products within their portfolio. They were having a difficult time optimizing spend across multiple products under the brand. Each of the product had a different target group, seasonality of demand and market positioning. They were looking for a marketing spend plan that could optimize the spend mix to maximize sales across the portfolio, boosted the branding and generated results that were insightful and actionable.

Great marketing mix for greater branding

It is more important to use the right marketing mix, rather than to spend money. The study provided the client with a clear view of return on marketing spend and better investments.

  • Spend reallocation across product portfolio to boost marketing sales
  • Better understanding of halo effect and cannibalisation across the portfolio
  • Improved returns using marginal return on investment estimates (MRoI)

The portfolio market mix study allowed the client to look at marketing as an integrated effort across different products within the brand portfolio.

Multiple products. Incoherent spend mix.

The hair care brand had multiple products catering to Multiple target groups, having different seasonality and Multiple price points. They had some idea of the halo and cannibalisation effect, but had not really looked at their marketing efforts at the portfolio level. The client was looking for an integrated market mix study on their brand portfolio and a co-ordinated spend mix for all products in the brand portfolio.

There were some challenges from a portfolio mix study. The portfolio was dominated by 3 products, few were generating some sales and about 40% of the products in the brand portfolio contributed less than 15% of total sales. Most of these products had low marketing visibility – due to limited spend budget. Competition was scattered across markets and included private labels and established brands with multiple brands and single product brands.

Each marketing spend $ serves a purpose

Portfolio optimization helps the client define budgets and maximize returns on all the products. The solution helped them develop a co-ordinated spend mix across target groups, seasonal trends and price points. Some key takeaways from the study are:

a. Leveraging the market mix results to maximize marginal return on investments

b. Co-ordinated messaging across product portfolio to maximize short term sales as well long term branding

c. Uncovering strength of each product, across geographies and target groups

Leveraging the results from portfolio optimization using MMM, the client got a comprehensive view of their marketing activities and the impact on sales.