Calpol: Using Econometrics to predict the future

UM and Meta Metrics

 

Client Company: Johnson & Johnson
Brand: Calpol

In 2016, Calpol was flying high - the Kids’ Meds category leader with 33.2% share and healthy growth of +1.1 pts YOY. The combined challenges of increased competition from private label (PL) and parents either trading down, treating less or dropping out of the category altogether, made maintaining share in 2017 a challenge. We shifted our mindset from a pure focus on ROI, to balancing ROI with Retail Sales Value (RSV), which is essentially the cash that goes through the till. RSV is a valuable metric because it allows us to get closer to business metrics such as share performance. ROI was still important; it was a matter of balancing the two. Through econometric modelling, we established a new way of interpreting the data using both a simulator and a real time econometrics engine. The former let us forecast both ROI and RSV for any given TV plan. The latter gave us a two week rolling forecast to inform media weights in flexible supporting channels. We didn’t just achieve our goal of maintaining market share, we increased value share in the Kids’ Meds category, with the increase equal to over £1M RSV.

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