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You are the CMO of Gaylord Industries and a data science vendor, Marketing Mix Consultants Corporation or MMCC, has just presented the results of a
You are the CMO of Gaylord Industries and a data science vendor, Marketing Mix Consultants Corporation or MMCC, has just presented the results of a marketing mix model that they built for you: The model predicts Gaylord Gizmo sales based on inputs of your various marketing channels, e.g., the budget assigned to TV, radio, digital media, social media, and so on. The analyst from MMCC presented an area chart showing a base level of sales (a constant value week over week) along with an area level representing the contribution of each marketing channel. The model predictions perfectly match the sales data of the last 2 years. When you asked about how the model could have such perfect accuracy given that no data about competitor activity or macroeconomic conditions was included in the model, the MMCC analyst claimed that competitor activity and economic data is automatically incorporated into the estimation of the base contribution. You are planning the marketing budget for the next quarter and had intended to set budgets based on the optimal mix recommended by the MMCC model. You know your primary competitor is planning a much-larger-than-normal marketing campaign during the quarter to celebrate their 25th year in business. Can you set your budget based solely on the model's recommendations assuming that competitor activity is accounted for in the model's baseline figure? Or do you have concerns? Please explain
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