PREDICTIVE & FACTOR ANALYSIS CASE (PHARMA BRAND)
Objective: increase brand X sales.
Problem: find an effective solution, taking into account the influence of all
major factors.
Factor analysis:
Market share and category size
Market share and marketing activity
Factor analysis outputs:
- Brand X sales remain unchanged despite the general decline in the market
-
The main factors affecting sales:
- TV ads
- Availability of a wide distribution network
- Decrease of the product retail price affects sales growth less than the TV activity
The chart illustrates the most significant factors with a
correlation coefficient. The closer the coefficient is to 1, the stronger the relationship between
the indicators
We provided possible scenarios nearest to the client's sales targets :
- Scenario 1: no advertising activity, expected sales growth of 0 p.p., sales level remains at the level of the previous year
- Scenario 2 RECOMMENDED: maintaining the price and the level of advertising activity, expected sales growth +5 p.p.
- Scenario 3: product price decrease by 10 p.p., maintaining the level of advertising activity, expected sales growth of +7 p.p.
