Forecasting

The Brief:
The client is in the margarine category in Australia.
Client’s market volume is on the decline and they
do not understand why or what to do about it or where it will end.

The Approach:
The bases to solving this dilemma relied on historical data across categories. The framework relied on a top down / bottom up econometric modelling approach.

The Results:
The underlying reason for the issue became evident in the top down review. Namely, the butter category was back in vogue and its share was increasing relative to margarine. This was largely related to a perception that natural products where better for you. To combat this perception, the client looked at advertising to stress a good health association with margarine. The econometric modeling also highlighted a price elasticity differential between competing products which also need to be addressed.