This project applies the Theory of Constraints (TOC) to analyze advertising data and identify the factor that limits overall sales performance.
The dataset includes advertising spend across TV, Radio, and Newspaper channels, with Sales as the output.
The objective is to identify the constraint in the system and optimize advertising strategy to improve throughput.
- Analyze the impact of advertising channels on sales
- Identify the system constraint using TOC principles
- Improve marketing efficiency by reallocating budget
- Provide data-driven business recommendations
The dataset contains the following variables:
| Column Name | Description |
|---|---|
| TV | Advertising spend on TV |
| Radio | Advertising spend on Radio |
| Newspaper | Advertising spend on Newspaper |
| Sales | Product sales |
According to Theory of Constraints, every system has at least one constraint that limits its performance.
TOC Steps Applied:
- Identify the constraint
- Exploit the constraint
- Subordinate other processes
- Elevate the constraint
- Repeat the process
After performing exploratory data analysis and correlation analysis:
- TV shows a strong positive impact on Sales
- Radio shows moderate impact on Sales
- Newspaper shows minimal or negligible impact on Sales
- Weak correlation with Sales
- Low return on investment (ROI)
- Increasing spend does not significantly improve Sales
- Consumes budget without increasing throughput
From a TOC perspective, Newspaper advertising limits overall system efficiency.
- Sales growth is constrained by ineffective Newspaper spending
- Budget allocation is misaligned with performance drivers
- TV and Radio are higher-throughput channels
- Reduce or eliminate Newspaper advertising spend
- Reallocate budget toward TV and Radio
- Continuously monitor performance to identify new constraints
- Treat marketing spend as a throughput optimization problem
Using the Theory of Constraints, Newspaper advertising was identified as the primary constraint in the advertising system.
By removing or minimizing this constraint, the organization can significantly improve sales performance and marketing ROI.
- Python
- Pandas
- Matplotlib / Seaborn
- Correlation Analysis
- TOC Methodology