MMA Launches Marketing Mix Model With Enhanced Trade Promotion ROI Capability

MMA’s Enhanced Marketing Mix Model Helps Companies Optimize Marketing Investments Across the Entire Marketing Portfolio of Marketing and Trade Support Tactics

Wilton, Conn., September 28, 2005
Marketing Management Analytics, Inc. (MMA) today announced the launch of an
enhanced marketing mix model to help marketers improve the profitability of both their advertising and trade promotions. Developed for consumer packaged goods and retail marketers, the MMA Enhanced Marketing Mix Model combines trade promotion and marketing effectiveness in one comprehensive model. This allows companies to improve the return of their marketing investment by better understanding the impacts of trade saturation and forward buying.

MMA, the pioneer and innovator in advanced marketing analytics, is an independent operating unit of Carat, one of the world’s leading media services companies.

Today, most CPG and retail organizations model marketing effectiveness separately from their trade promotions. MMA’s innovation allows marketers to identify opportunities for improvement across marketing and trade spending, including: TV, radio, print, online, in-store promotions and trade merchandising. The net result is that brand management and trade management groups will be able to work collaboratively to build sales in both the short-and long-term.

“With trade spending representing as much as 20% of a company’s sales, a business’ failure to understand how much to spend on trade and where to put its trade dollars, has limited companies ability to truly optimize portfolio spending across all marketing levers on an equal basis,” said Vinit M. Doshi, SVP, MMA Analytical Solutions Group. “With MMA’s enhanced Marketing Mix Model, Marketers will now be able to reinvest portfolio dollars in a more productive manner.”

For years, marketing mix models assumed that spending on coupons, store displays and other in-store promotions had a linear relationship with sales, according to Doshi. “The models assumed that if for example you spent 10% more on trade, your trade-driven sales would rise an additional 10%. This assumption did not account for forward buying or diminishing returns. You need to quantify both of these factors to understand trade promotion effectiveness and to properly optimize spend.”

By using MMA’s enhanced Marketing Mix Model, CPG and retail marketers gain many advantages including:

• Optimized use of trade dollars
  
  
• Learn how much to spend to achieve sales targets without reaching trade saturation
  
  
• Understand how much to spend at the individual retail level

“The MMA enhanced Marketing Mix Model provides a more comprehensive read on the full spectrum of marketing, from classic media through trade,” said John Nardone, Chief Client Officer and EVP at MMA. “We are confident that with our enhanced model, senior marketing managers will be able to do an even better job building the bottom line.”