Challenge:
One of the toughest challenges facing consumer electronics companies is balancing the promotion of legacy models while launching new products. A leading global electronics manufacturer grappled with this dilemma. Internally, the sales team pushed hard to protect large budgets for retailer subsidies to move old inventory, while marketing leaders argued for increased advertising and media investment. The lack of alignment led to ongoing debates and stalled decisions. They engaged us to provide an impartial, fact-based solution.
Our Approach:
We began by immersing ourselves in the client’s business landscape. This included in-depth conversations with internal stakeholders, retailer partners, and consumers to understand the dynamics across the entire value chain. With this context, we designed and executed a Marketing Mix Modelling (MMM) exercise, leveraging five years of historical data. Crucially, the modelling was structured not only to answer critical business questions but also to build trust and buy-in from different decision makers across the organization.
Key Insights:
Our MMM analysis uncovered several eye-opening findings:
- Retailer subsidies—considered untouchable—were far larger than necessary. Reducing them would not significantly impact sales.
- Increasing investment in advertising—particularly digital and social media—would deliver a much higher ROI.
- Instead of relying on subsidies, retailers could be empowered in smarter ways. We recommended reallocating part of the savings into developing a retailer support app that provided promotions, product details, and selling points to help retail partners actively drive sales of older models.
Result$:
The client initially viewed cutting subsidies as risky, but with our data-backed recommendations and collaborative approach, they made the shift. The retailer app was rapidly adopted, exceeding expectations in supporting older model inventory. Not only did this offset the effect of reduced subsidies, it actually increased sales of legacy products while freeing up resources for new launches.
Within one year, the company achieved a 25% increase in marketing-driven sales with the same overall budget. Just as importantly, internal alignment around evidence-based investment decisions improved dramatically, replacing debates with a shared commitment to data-driven growth.
Impact:
This case demonstrates how MMM can go beyond answering “what works” to transforming entrenched practices and creating new business solutions. By combining rigorous modelling with organizational engagement, we helped the client reframe tradeoffs, unlock hidden efficiencies, and fuel sustainable growth.