Marketing Experimentation in Modern Marketing

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.

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.