BRANDAID: A Marketing-Mix Model, Part 1: Structure

Summary

BRANDAID, an expansion of ABUDG [#67], is a flexible, online model for assembling marketing decision elements to describe the market and evaluate strategies. The structure is modular so that individual decision areas can be added or deleted at will. The model is of the aggregate response type, in which decision variables relate closely to specific sales performance measures. The major submodels are advertising, promotion, price, salesmen, and retail distribution. The advertising submodel employs a long-run sales response to advertising function and a linear log process. Promotional effects are built up from a characteristic time pattern for the type of promotion and a response curve. Salesmen affect sales through a response process structurally similar to that for advertising. Retail distribution variables are intermediaries that the company affects and that in turn affect customer response. Submodel outputs combine multiplicatively. Competition enters in a modular, symmetric way through a matrix of competitive coefficients that determine the source of sales for each brand as it seeks to increase its market position.