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Tuesday, November 13, 2012

Strategic Marketing Mix Decisions

I have been recently been taking a look at the broad concept of marketing mix decisions.  The problem is old:  how do we decide how much promotional dollars to allocate to what marketing medium?  How much are we wasting?   And how do we time the allocation to make sure it optimizes the results achieved?   It links to the general problem of forecasting demand.   Forecasting depends upon both specific company decisions and external uncontrollable contexts we need to consider.  When I taught forecasting I always included the   phrase 'The forecast will be wrong, but how will it be wrong is the more important question'.  

In recent years too the number of possibilities for forcasting methods has expanded.   Online and social methods, still in their relative infancy, also need to be allocated funds to make them work.   How do you react to rapid changes by competitors?  And the question of how much and when immediately emerges.

I have been taking a look at IBM DemandTec's approach recently to understand how it it integrates with other methods on the market.   My enterprise tested their approaches early on. Their holistic approach based on optimization methods bears a close look. They write:

" ... Holistic marketing mix decisions.  One continuous, actionable plan..... Simply using average marketing investment returns doesn't tell you much about what's driving volume, share, or profit.  If your assumptions are stale, you can't truly optimize your marketing mix in a rapidly changing marketplace. Now you can use the most dynamic predictive tools available to optimize marketing investment decisions throughout the year.  It's all delivered through one comprehensive system.

IBM DemandTec Strategic Marketing Planning transforms traditional marketing mix insights into one continuous analytic system that spans all of today's consumer touchpoints – media, trade, social, and more.  Empower CMOs with sophisticated tools for allocating portfolios.  Give brand managers precise up-to-date data to optimize decisions. .... 

Quickly adapt to marketplace shifts
Optimize marketing spend
Efficiently allocate marketing funds
Fully leverage your existing marketing mix analysis investment   .... " 

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