The Concept of Marketing Mix

A must read for any marketer and marketing mix modeler

As Marketing Mix Modeling (MMM) is gaining a lot of attention in recent years, many aspire to enter this field.

Over the years many such aspirants have asked me for resources to get started on MMM.

My suggestion to them has always been to read two seminal works:

The concept of the Marketing Mix by Neil Borden
&
The management of marketing costs by James Culliton

Both these seminal works are more than half a century old, yet they are very relevant even to this day and age.

In this post I will highlight key points for 'The Concept of the Marketing Mix by Neil Borden'.

MMM is Marketing Mix Modeling and not Media Mix Modeling

Of late I come across a lot of people calling MMM - Medix Mix Modeling. But in reality it is Marketing Mix Modeling.

We have written a detailed post on why Aryma Labs is a Marketing Mix Modeling company and not just a media mix modeling company.

Borden presents a sound explanation for this -

In all the above illustrative situations it should be recognized that advertising is not an operating method to be considered as something apart, as something whose profit value is to be judged alone.

An able management does not ask, "Shall we use or not use advertising, without consideration of the product and of other management procedures to be employed.

Rather the question is always one of finding a management formula giving advertising its due place in the combination of manufacturing methods, product form, pricing, promotion and selling methods, and distribution methods.

As previously pointed out different formulae, i.e., different combinations of methods, may be profitably employed by competing manufacturers.

One true marketing mix model

At Aryma Labs we believe in two things.

1) A certain combination (mix) of marketing variables lead to the sales and it is upon the MMM vendor to find that true mix or model. Essentially there is one true MMM model.

2) There could be millions of permutation and combination of marketing mix to get the same historical result or to do better.

This has been our core principle in designing of various budget optimization scenarios in our product ArymaEdge. Our platform choose the best mix out of millions of combination !

MMM is art + Science

When people say the above statement, they try to imply that the 'art' part is devoid of science. However I view it in a different way. Choosing what statistical technique to apply and in what measure is also an art.

Yes, there is an element of art, in that the marketer must choose the right mix. But to validate this mix empirically one does need sound statistical methods. We have been trying to add good portion of science into MMM through novel methods.

In summary: If you are looking to get started with MMM, please start with the two seminal papers.

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Thanks for reading.

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Stay tuned for more articles on MMM.