Case Study

Optimizing the marketing mix for a consumer electronics major helps allocate dollars for maximum impact

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Global consumer electronics manufacturer

Consumer electronics

Business need:
Determining the optimal mix of long-term and short-term marketing activities to achieve sales growth and increase marketing effectiveness

Genpact solution
A marketing mix model that scientifically attributes sales to short- and long-term marketing drivers to provide objective, insight-led recommendations for marketing activities that maximize ROI
This includes:

  • Standardization and simplification
  • Risk and compliance

Business impact:

  • Allocation of marketing spend to the most effective marketing tactics
  • Increase in sales volumes by 10% with same overall marketing spend

Consumer electronics marketers struggle with the choice between short- and long-term marketing activities

The consumer’s path-to-purchase for consumer electronics is substantially longer than that for other consumer goods. The relatively short life cycles for new models and features also results in consumers fearing making a “less than optimal” purchase. This perceived risk impacts sales and makes determining the proper mix of long-term brand building and short-term marketing activities a daunting task.

Marketing mix model helps predict the effectiveness of various short- and long-term marketing activities

Marketing mix methodologies that matured in the consumer packaged goods industry over the years were refined for the specific context of consumer goods manufacturers to provide objective insights into short- and long-term marketing effectiveness and ROI.

The analysis developed a customized means of using quantitative measures to assess positive purchase intent. This led to increased insight into the long-term impact on sales volume and returns, which would not be apparent from looking at advertising and promotion variables alone. They include:

  • Marketing activities designed to drive purchases are correctly attributed to current period volume sales. Although digital advertising is a growing and important medium for short-term sales, digital advertising has more impact in the short term especially when used in conjunction with broad-reach advertising vehicles (TV advertising)

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  • Consumer electronic sales can be focused on short selling seasons (e.g., Black Friday through holiday shopping). Measuring the effectiveness of activities by selling seasons provided substantial insight into how the manufacturer should reschedule activities to support key selling seasons, and thus improving returns

Business impact

Planning guidelines for determining the minimum and maximum levels of weekly support that were most effective by marketing driver were formulated based on the insights.

Re-aligning the campaigns to these guidelines increased short-term volume impact (5% to 10%) with no increase in the overall marketing spend.

  • The research underscored the growing importance and utilization of mobile devices, for receiving messages from the manufacturer and for researching product features, comparisons to competitors, and pricing
  • The analysis yielded a wealth of quantitative insights, providing an objective comparative measure for managers to optimize the allocation of marketing investment in the future

Marketing effectiveness measurement
Genpact specializes in using applied regression analysis to determine the impact of marketing activity on sales volume. Pioneered in the consumer packaged goods category, the methodology can be applied to other consumer businesses. Examples include evaluating where consumer sales data (or a means to translate shipments to sales to the consumer) are available for e-commerce channels and traditional retail sales.

Genpact specialists have worked closely with the manufacturing sector in multiple markets to develop valid and reliable approaches to using this methodology. We can analyze by product category, purchase cycles, and other specific contexts to yield valid marketing insights that have resulted in material, positive business impact.

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