Marketing Experimentation in Modern Marketing
Miranda is thinking to invest in Bilboard campaign for his bicycle
b
rand Avendus. The national campaign cost is $ 50K. His company currently sales $60MN bicycles. He is willing to invest in the campaign with an aim of net lift of 20% in revenues. There are many correlations and casual factors to achieve the desired objectives. The holiday seasons is approaching and the historically the Bicycle sales increases in school vacations.
rand Avendus. The national campaign cost is $ 50K. His company currently sales $60MN bicycles. He is willing to invest in the campaign with an aim of net lift of 20% in revenues. There are many correlations and casual factors to achieve the desired objectives. The holiday seasons is approaching and the historically the Bicycle sales increases in school vacations.
Miranda decided to roll out the campaign on national level
but the result was not as per the expectations and the sales dipped by 5%.So
what went wrong? Why sales could not lift as per the expectation?
The campaign did not succeed because the competition BiMax
launched a new range of bicycle based on Disney cartoons with added features in
it. While the other competition Newbike offered an added inventory of head
guard and water bottle with their Bicycles. The young customers who are crazy
about cartoons preferred the BiMax over Avendus and the others opted for
competition offer.
She did not make a marketing experiment and hence the results
were not as what she expected. While implementing decision to rollout the
campaign she could not discount the external factors. She failed due to lack of
marketing intelligence, she did not had the right inputs on what competition is
doing and planning. She could not anticipate the competition actions and the
marketing campaigns were planned in isolation. This all happened because there
was no marketing experimentation.
Marketing Decisions are complex because the outcome of any
decision depends on several other variables; how competition will behave to your
actions, the response of customers, season/force majeure and many others. The
brand managers make mistake of making the decisions in isolation and hence
could not succeed. Marketing
experimentation helps in overcoming these barriers and can benefit in achieving
the organizational goals.
In Marketing Experimentation two groups are selected – Test Group
and Control Group. These groups are small in number & representative
identities of the complete market. The groups are selected on the basis of
their proximity in term of geographical area, consumer sales and their
behavior. The external factors are considered and then the experimentation is
carried out.
The Test group is selected on advertisement/campaign/offer
to be implemented on national level. The discounting factor for external
factors is calculated and time frame is decided. The control group is selected on
various vicinity. Post all this, Test market is exposed to the campaign or
offer.
The results are measured and compared with control market
and then the decisions are taken whether to implement the decision on national
level or not?
The marketing experimentation work like a chemical laboratory
where many experiments are done and the final solution is selected after testing
many. For all modern brand managers it is must that before implementing any
campaign offer the tests are conducted and the results of test are evaluated
both on economic and viability scales and then the decisions are implemented.
