Leaving no stone unturned

A global tobacco manufacturer asked Jarmany to help predict future UK market volumes and the impact on sales. By consolidating sales and macro-economic data we were able to deliver an econometric model with a compelling and logic driven narrative.

Challenge

Our client, one of the top 5 global tobacco companies, needed to improve the way it predicted sales in the UK by sales channel. To get there, it wanted to use more data points and build more robust and flexible models whose predictive capabilities would improve over time. But like a lot of companies, it didn’t have the necessary skills in-house to do the work.  

Solution

First, we pulled together a small team of data scientists to understand the business’s needs. It was immediately clear the quality of the modelling was very important. Even small movements in estimated sales could have a massive impact on factory production volumes.

We then looked at the data we needed to gather. We consolidated everything, including historical sales volumes by retailer, macro-economic indicators such as interest rates, unemployment figures and even historical weather records. We put everything in one place and made sure all the data was clean and robust.

Next, we built the best econometric model we could using the data available. Through this process we identified the factors that had the greatest impact on sales patterns. And the real art of it? We created a clear, compelling and logic-driven narrative that helped the client to see the value of the models and the business benefits the models could deliver.

We also decided to go a couple of steps further. First, we developed a dynamic price-change model, so the client could plan for scenarios like shifts in government taxation or competitor pricing fluctuations. Finally, we trained the client’s analytics team on how to use, maintain and update the models themselves.

Impact

Our modelling enabled the UK-arm of this global company to refine production volumes according to fluctuating market demand, improve factory efficiencies and optimise channel investment activity. Ultimately, this created a competitive edge that resulted in market share improvements in the UK.

Share