Optimal Marketing

Companies selling multiple products in multiple territories face the difficult question of how to allocate marketing resources. But comparing the profit potential of, say, razors in Germany with batteries in the United Kingdom is a difficult analytical task that demands reams of data. Finding the optimal answer is only half the battle. The rest involves the political and organizational challenge of shifting the money around.

by Marcel Corstjens
Last Updated: 23 Jul 2013

Companies selling multiple products in multiple territories face the difficult question of how to allocate marketing resources. But comparing the profit potential of, say, razors in Germany with batteries in the United Kingdom is a difficult analytical task that demands reams of data. Finding the optimal answer is only half the battle. The rest involves the political and organizational challenge of shifting the money around.

One company, Samsung, overcame these challenges by using hard data, not intuition, to allocate its marketing dollars. Marketing executives undertook an intensive 18-month project to gather diverse and detailed information about more than 400 possible product-category and country combinations. It collected all that data in a single, easy-to-access site and used the software's analytical power to predict the impact of different allocation scenarios.

Such what-if testing enables management to find the budget allocation that will yield the highest total marketing ROI. Samsung also worked to anticipate and defuse organizational resistance to change.

Harvard Business Review, October 2003

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