This decision-making tool helps businesses cope with the impact of the future’s uncertainty by using historical data and trends. It enables businesses to plan their next moves and create budgets that will offset whatever uncertainties that may occur.
Several companies are utilizing advanced market modelling for enhanced business decisions regarding performance of marketing mix elements which are 4Ps i.e. Product, Price, Place and Promotions.
Measuring performance/ returns from marketing elements is increasingly important in times of limited marketing budgets and competitive profit margins.
There are different techniques used to measure market attractiveness: –
- Regression techniques for market mix modelling
- Pooled regression
- Fixed effects model
- Hierarchical Bayesian Regression (HB Reg)
A wide variety of analysis tools is used to model consumer demand from traditional statistical approaches to neural networks and data mining. These demand models enable estimation of future demand i.e. forecasting. Also, a combination of multiple types of modelling tools may lead to the best forecasts.