Académique Documents
Professionnel Documents
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• Module 1: Data
• Completeness
– Linking aggregate sales movements to marketing instruments
(price, feature, display, etc)
– Obtaining a richer set of performance measures beyond market
share and factory shipments
• Timeliness
– Getting the data within a window that allows for meaningful
managerial action (i.e. less than old lag time of 8 weeks or
more)
• Accuracy
Scanner Data: Limitations
• No information on psychographics
Promotion Analytics from Scanner Data
• A simplistic picture
8%
Purchase Purchase
Deceleration Acceleration
5%
4.8 %
4.5 %
1 2 3 4 5 6 7 8
Week
Promotion Week
Promotions: Actual data
1 1
0.8
Market Share
0.75
Price
0.6
0.5
0.4
0.25
0.2 F F F F F F F
D D D D D D D
C C C C
5 10 15 20 25 30
Week
F = Feature, D = Display, C = Store Coupon
Promotion Types
(1) Wal-Mart with 4,000 stores, 52 weeks of data, 500 SKUs (104 million observations!)
(2) Best-buy with 1,500 stores, 52 weeks of data, 500 SKUs (39 million observations)
20 20
15 15
10 10
5 5
0
0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51
P1 P2 P3
P1 P2 P3
2. Pay Attention to Signal-to-Noise Ratio
• Consider the following measurement. Is there significant impact from marketing event?
Average 10 13 30
• If you do analysis ignoring the reverse causality, you may conclude the following.
30
Advertising (t) 9.716546286 0.354635984 3.58E-26
20
10
Significant impact of advertising?
0
0 1 2 3 4 5 6
Adv (m,t)
• Think about the graph below (from NYT). Is the family income really responsible for better
academic achievement? What would be potential omitted variable bias here?
5. Selection by Outcome: Bad Idea!
• Problem: Often times, two groups, which are conditioned by outcome variables, are
compared to infer the causal impact of marketing mix
• Example
– To calculate the ROI of paid search campaign, advertisers compare the “conversion
rates” of each “search” keyword. Usually, branded keywords are shown to have high
conversion rates (> 6%) compared to generic keywords (~ 1%).
80,000
Shipment
Retail sales
60,000
40,000
20,000
1978 1979 1980 1981 1982
Data Requirement
• Key elements of data
– Unit sales by SKUs (outcome): ideally for the entire category (including competitors), but
feasible only with data for focal company‘s own SKUs
– Price measures by SKU(causal): focal company + competitors
– Promotion measures by SKU/product line/brand (causal): focal company + competitors
• Duration
– Ideally 3 years (of weekly data); At least 2 years of data
– To properly control seasonality
• Level of aggregation
– Ideally store-level data; chain or account (chain-market combination) data can be used
as long as promotion/price policies are uniform (within chain or account)
– Using market or channel-level data can cause overstating of promotion effects due to
aggregation bias
• Type of response data: Retail sales data (Do not use factory shipment data)
– Due to forward buying from retailers
Potential Data Source: For Discussion
• Key elements of data