Economics in action: modelling marketing effectiveness
In this video, Adrian and Luke discuss an analytical tool called market mix modelling which we have used to assess the effectiveness of marketing. This allows firms to develop an accurate picture of how various factors, including marketing, affect sales volumes. We explain how this involves:
understanding the various questions that the client would like to answer;
collecting data on a wide range of factors that affect sales volumes for the client; and
developing a model of sales using the data collected.
We run through an example of how we can model ice cream sales to understand the effect that marketing has on sales.