Data-Driven Marketing: Understanding Marketing Mix Modeling

The Man, Your Man, Could Smell Like

Old Spices' "The Man Your Man Could Smell Like" campaign is a fully loaded campaign. The campaign leveraged humor and wit to create a unique and effective marketing mix that built a competitive advantage for the brand. Let us see how Old Spice incorporated the 4 P's of marketing mix to come up with the campaign:

Product: Old Spice's product line includes deodorants, body washes, and other personal care products for men. The brand positioned its products as a way for men to feel confident and attractive.

Price: Old Spice's pricing strategy focuses on offering competitive product prices while maintaining a premium image.

Promotion: Old Spice's "The Man Your Man Could Smell Like" campaign featured a series of humorous and over-the-top ads featuring actor Isaiah Mustafa as the "Old Spice Guy." The ads emphasized the brand's image as a confident, masculine, and attractive choice for men.

Place: Old Spice's distribution strategy was focused on building a strong retail presence, including partnerships with major retailers such as Walmart and Target.

How important is a pricing strategy for the growth of your organization?

The Old Spice "The Man Your Man Could Smell Like" campaign successfully built a competitive advantage for the brand by using humor and wit to create a memorable and emotional connection with consumers. The campaign's focus on a confident and masculine image helped the brand stand out in the crowded personal care market. In addition, old Spice's strong retail presence and distribution partnerships ensured its products were widely available to consumers, leading to a 107% increase in sales just one month after the campaign's launch. Overall, the campaign is a prime example of how marketing mix can build a competitive advantage in a witty and memorable manner.

What is a Marketing Mix?

Marketing mix refers to the set of controllable factors that a company can use to influence its customers' purchasing decisions. These factors are known as the "Four Ps" of marketing: product, price, promotion, and place.

4 P's of Marketing Mix

The 4 P's of marketing mix are known as the elements of marketing mix. The 4 P's of marketing mix are:

Product

A company's products or services. Apple sells iPhones, iPads, and MacBooks. Quality, design, and innovation set the company apart.

Price

A customer's purchase price. Walmart's daily value pricing strategy strives to sell things at low prices while making a profit.

Promotion

A company's methods of marketing to its target market. Coca-Cola advertises and interacts with customers on social media. Celebrities and sports teams promote the brand.

Place

A business's distribution channels. Amazon, an online marketplace, sells many products and services. Amazon Go stores offer a more convenient shopping experience.

These four elements are controllable factors that a company can use to influence its customers' purchasing decisions. One might wonder what strategies are followed in marketing mix. The elements, i. e. the 4 P's of marketing mix, are also known as strategies followed in marketing mix. By managing the marketing mix effectively, companies can create a competitive advantage by differentiating themselves from competitors and attracting and retaining customers.

What is the Purpose of Marketing Mix as a part of Marketing Strategy?

The purpose of the marketing mix as a part of marketing strategy is to help companies effectively manage and control the various elements that influence customer purchasing decisions. By strategically managing the four Ps of the marketing mix - product, price, promotion, and place - companies can create a unique and attractive offering that meets the needs and desires of their target market.

The marketing mix allows companies to:

By managing these elements effectively, companies can differentiate themselves from competitors and create a competitive advantage. This can help to attract and retain customers, increase sales, and ultimately achieve marketing objectives such as increasing market share, growing revenue, or building brand awareness.

Overall, the marketing mix is a critical part of the marketing strategy that enables companies to effectively manage the various factors that influence customer purchasing decisions and create a compelling and attractive offering that meets the needs and desires of their target market.

What are the Variables of Marketing Mix Modeling?

Marketing mix modeling involves analyzing the various marketing mix elements to understand their impact on business outcomes, such as sales, revenue, and market share. The variables that are typically considered in marketing mix modeling include:

Base Modeling Variables

Product, price, promotion, and place make up the marketing mix. They influence sales, revenue, and market share. Base modeling variables can assess how these changes affect business performance.

Incremental Factors

These variables can be added to the marketing mix analysis to refine it for a specific firm or industry. The store layout, product placement, and inventory levels are additive variables for retail businesses. Incremental factors can illuminate business outcomes and reveal optimization opportunities.

Other Variables

Economic conditions, industry trends, and consumer behavior may be outside the company's control. Operations, supply chain, and customer service are different variables. These characteristics can illuminate how the marketing mix affects business outcomes.

In summary, marketing mix modeling variables comprise the marketing mix's core elements and other characteristics important to a business or industry. These variables can help firms understand business outcomes and optimize their marketing mix to meet their goals.

How can a Marketing Mix Build a Competitive Advantage?

Organizations can get a competitive edge through product quality, design, packaging, price, advertising, and distribution. These elements distinguish companies. Understanding customer wants and preferences, executing well, and optimizing require a marketing mix to get a competitive edge. Let us see in detail: 

• Product differentiation: Companies can get a competitive edge by delivering distinctive product features, quality, design, or packaging. Apple's creative product design and functionalities have given the tech company a competitive edge.
• Pricing plan: A company's pricing strategy can boost its competitiveness. Offering competitive prices, discounts, or promotions can attract price-sensitive clients and boost sales. For example, Walmart's "Everyday Low Prices" policy has given it an edge in retail.
• Promoting brand recognition, engagement, and loyalty can also give a company a competitive edge. For example, Nike's "Just Do It" campaign has helped it connect with clients emotionally and gain a sports gear market advantage.
• Distribution channels: Product availability and accessibility can boost a company's competitiveness. A corporation can increase product availability by forming strong distribution partnerships and optimizing its supply chain. Coca-Cola's large distribution network has given it a beverage market advantage.

A corporation can differentiate itself by using these marketing mix aspects. However, understanding customer needs and preferences, effective execution, and continuous optimization are needed to build a competitive advantage through a marketing mix.

What can Marketing Mix Modeling help you with?

There are a number of uses of the marketing mix modeling. Let us look at a few of them:

Marketing ROI

• Definition: Marketing ROI (Return on Investment) is a performance metric used to measure the profitability of a marketing campaign or activity.
• What it tracks: Marketing ROI tracks the financial return generated by a specific marketing activity or campaign, relative to the amount of money invested.

Formula used: Marketing ROI = (Revenue - Cost of Marketing) / Cost of Marketing

Future Sales​

• Definition: ​Future Sales is a performance metric used to forecast the potential revenue generated by a marketing campaign or activity.
• What it tracks: Future Sales tracks the estimated amount of revenue that will be generated by a marketing campaign or activity, based on factors such as customer behavior, market trends, and historical data.

Formula used: The formula for calculating Future Sales will depend on the specific marketing mix modeling approach used, as well as the available data and variables being considered. 

Marketing Channel

• Definition: Marketing Channel is a performance metric used to measure the effectiveness of various channels or mediums used to promote a product or service.
• What it tracks: Marketing Channel tracks the performance of each individual marketing channel, such as social media, email marketing, or TV advertising, in terms of its contribution to overall sales or revenue.

Formula used: The formula for calculating Marketing Channel performance will depend on the specific metrics being used to evaluate each channel. For example, if using customer acquisition cost (CAC) to evaluate channel effectiveness, the formula would be:

CAC = Total Cost of Marketing Channel / Number of Customers Acquired

Media Investment Needed

• Definition: Media Investment Needed is a performance metric used to determine the optimal amount of investment required for each marketing channel to achieve a specific business goal.
• What it tracks: Media Investment Needed tracks the estimated amount of investment required for each marketing channel, such as TV advertising, online display ads, or social media, to achieve a desired level of sales, revenue, or other business objective.

Formula used: The formula for calculating Media Investment Needed will depend on the specific marketing mix modeling approach used, as well as the available data and variables being considered.

How can Datazip help PVR?

One of the best reasons to visit a PVR theater is the popcorn! Be it the cheesy-licious ones! The sweet, caramelized ones or the OG ones: the salted ones! Even if people are hesitant initially cause of the price, the tempting aroma and the cheeky munching sound of the corn compel almost everyone to get one bucket.

Going back to the question of how Datazip can help PVR, this is in terms of increasing their sale of popcorn.

Once a person books the tickets, they automatically get the option of placing the order for popcorn with a 10% discount. However, many people skip this option but get popcorn later on. Datazip can analyze the data gathered to understand the kind of people who buy popcorn along with tickets, those who buy before the movie, and those who buy during the intermission. They can gather information like the age and gender of the buyer, size of the group, number of buckets purchased, additional items added, and more. Once these data are gathered, Datazip can analyze them and develop a strategy that will help PVR understand who are not buying popcorn. Now using that data, PVR can come up with new promotions or different strategies that will be directed toward those who are reluctant to purchase popcorn.

Talk to the team of Datazip today and find out how can they help your organization grow!

Conclusion

The discussion in this blog covered various aspects related to the marketing mix and its importance for businesses, particularly for B2B SaaS companies. For example, we discussed the 4 P's of the marketing mix, the variables of marketing mix modeling, and the strategies companies can adopt to build a competitive advantage. Additionally, we talked about the metrics that can be used to track the effectiveness of the marketing mix and how B2B SaaS companies can help their clients with their marketing mix.

Overall, the blog highlighted the critical role of the marketing mix in developing a strong brand image, creating differentiation, attracting customers, and driving revenue growth. By understanding the key elements of the marketing mix and how they relate to their target customers, B2B SaaS companies can create a unique value proposition and stay ahead of the competition.