rregressionspsstime series
I have data for 4 years with variables year, month and sales volume only. I want to find the base volume and incremental volume. I want to use Marketing Mix Modeling. Can anybody tell how to define model equation with these variables and how can I use SPSS/R for the same ?
Is it possible to build model with only these variables?
Is there any other way or statistical method to find these volume ?
Please reply…
Thanks in advance….
I think the hurricane model is possible, though it is not trivial and you will need panel data. The basic idea is that you get sales and demographics data from other Walmarts, from which you can construct a synthetic control group to compare with the affected store. Here's an example of this approach where the treatment was smoking control program in California from Prop 99, and a weighted combination of other states served as the untreated comparison group.
The approach you outline is not likely to work since there are seasonal effects in soft drink consumption. Saying that the end of September is just like the end of October, except for the hurricane is not quite right. The average temperature is October is lower, so that the reduction in sales from cooler weather is conflated with the effect of the hurricane.
The re-election model is not possible since you have no variation: Obama was reelected everywhere. There's no control group that you can construct.
The approval rating method is likely to suffer from spurious correlation. Both ratings and sales are likely to plummet and go back up, but that would hardly indicate a causal relationship (though that might be part of the story). Here's an example of regression of two series with a common trend going awry:
Best Answer
No, it is not possible to build such a model from the data you have (year, month, and sales volume). You did not list any information about the actual marketing mix (advertising, promotion calendars and levels, distribution, price). Plus, in most cases you will need finer time granularity (e.g. weeks), but that depends on the calendars.
You might want to start with Abraham and Lodish's work, published in Marketing Science in the 1980s and work forward using a Google Scholar search.