Discover a case study, on marketing mix modeling innovation, of a leader in the automotive industry, with a focus on brand measurement.
THE BUSINESS QUESTION
The client’s goal was to increase market shares in the automotive industry and optimize profits at a global level, without buying that market share through price agressivity. A challenging equation in a highly competitive and short-term market. Different pain points were identified by Ekimetrics before starting:
• how to manage several stakeholders, handling different objectives, visions of performance, and data maturity
• how to manage expectations of different levels of granularity, from fine category and content detail, to high level KPIs for the quarterly Executive Committee business reviews
• how to maintain flexibility and global scale, whilst ensuring our tailor-made approach to each local market is respected
• measure brand equity impact on sales in a category that is highly price motivated (for our client and their direct competitors)
Short-term impact on sales: we have used a combination of techniques, with a foundation of econometric modelling through multi-variate linear regression to maintain purity of understanding for the client and make it directly predictable. Of course, we have also included automotive related best practices, for example by modelling the impact of trade marketing which is rare in the industry. We built customized priorization grids, with which the divisional and local teams have managed to take smarter decisions at a country, central, category, content and channel level.
Test and learn: we work with the client every month to predict the next quarter of sales and recommend new actions, but importantly can use the model to look back at what actually occurred and learn from that. If new creative, media flight patterns or new promotional offers delivered a better or worse ROI, we can see this immediately and transfer that learning to the client, allowing them to confidently drive all elements of their business forwards with a rapid test and learn architecture in place.
ROI first: we have delivered a quantified ROI to the client with actionable action plans and predictive scenarios across the top 7 countries in Europe, accounting for over 70% of their total sales. This approach has delivered monthly action plan recommends, with an average profit ROI for the project of 12. The project has then been extended to 3 additional countries outside of Europe to pilot the impact across the other decision-making divisions around the world
OUR CLIENT’S GAIN
+5% sales in 4 months
+ 2% profitability at a worldwide level in 6 months
Profit ROI of 12
GOING THE EXTRA MILE
Innovative ways to measure which impact brand equity has on long term sales
Based on our 11 years expertise in Marketing Mix Modelling and the automotive industry, we have managed to understand the long-term impact of brand KPIs like awareness, brand preference, quality, etc. directly on sales. Importantly for the client, we have managed to do this without expanding the number of models, and so the cost and engineering complexity, but through establishing a base reliable model and isolating the impact of brand equity changes in the absence of media. This has given us the capacity to bridge short-term and long-term impact on sales, reconnecting sales to brand strategy and transforming the client’s philosophy around budget allocation.
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