MR1100
Submitted by: Jessica pelley and katie prowse
Submitted to: Penny Moss
Submission date: November 30, 2015
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Carmex Case Analysis
J&K Consulting Group

MR1100
Submitted by: Jessica pelley and katie prowse
Submitted to: Penny Moss
Submission date: November 30, 2015
-------------------------------------------------
Carmex Case Analysis
J&K Consulting Group

[Company address]

Table of Contents

Brief Overview (Summary)………………………………….. Page Two

Statement of Issue………………………………………………. Page Three

Environmental Scan…………………………………………….. Page Four

Questions and Answers……………………………………….. Page Five

Appendix A………………………………………………………….. Page Eight

Brief Overview

Since 1973, Carmex has been manufacturing lip balms. The company has grown significantly, and in the past five years they’ve been making new efforts to become more competitive.
Carmex used social media in the past to help market their products. With three new potential flavors, they can only put two into quantitative testing. Carmex will concentrate on using Facebook to help them determine which two flavors to move forward with, and to help drive their Facebook metrics.
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In order to narrow the flavor choices from three to two, the marketing team made a decision to do this through Facebook “likes” and “engagements.” The marketing team also decided to use contests and promotions in order to help increase the number of Facebook “likers.” When using this method, a problem arises. The problem being that these people may not actually be fans of the product and at the end of the promotion they have the ability to “unlike” Carmex’s brand page.
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To increase “engagements” a poll will be used. Consumers will then be able to anonymously click on a flavor of their choice to vote. The problem faced here is that the level of engagement depends upon the number of “likes” and the marketing team must ask questions in a way that consumers will find easy to answer.
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Statement of Issue

The issue that is presented in this case study is how to go about reducing the three flavors to two flavors, and what is the most effective method to achieve this?
Carmex wants to use Facebook as their marketing tool to help make their decision on what two flavors they should choose. Multiple choice polls seem to be the most efficient way to go about making their decision via Facebook.
However, when polls are conducted, often incentives and promotions grasp a larger audience. So, considering factors such as cost, time, and numbers, Carmex must decide if it is worth their while to conduct a poll alone, a contest alone, or combine both for stronger results.

Note: See Appendix A for Facebook Strategy considerations

Environmental Scan

Environmental scans are done to identify and interpret potential trends outside of an organization. They are important for the future and growth of a company. Typically, there are five uncontrollable factors in environmental trends: social, economic, technological, competitive, and regulatory.
Socially, Carmex needs to consider things like the ages of the consumers, genders, the demographics in general of the consumers in the lip balm industry. Others considerations like culture come into play, for example, we live in a more health conscious world today where people prefer more natural and chemical free products.
Economically, the most obvious thing to consider is price range. How much are the other companies charging for lip balms? How much is the population willing to spend on such products?
Technological factors most definitely see trends for using social networks as a primary marketing tool. The Internet is a great marketing tool and society once saw websites as a help, now sees social media such as Facebook as a huge promoter. New technology is changing the way consumers are shopping and influences what they are buying.
Competitive factors include what the other lip balm companies, such as EOS or Blistex, and what they are doing to promote their products. Even though Carmex is a lip balm company, they want to emphasize what makes them unique and why a consumer should buy their product over the other company’s.
The final uncontrollable force is the regulatory factors. Laws and regulations are inevitable; they will always be in place in some shape or form. When deciding on methods of marketing, all provincial and federal laws must be considered before anything can be put in the market. These regulations help protect our consumers, and that’s why it is so important for them to be put in place.

Questions and Answers

1. What are the advantages and disadvantages for the Carmex marketing team in collecting data to narrow the flavor choices from three to two using: (a) An online survey of a cross-section of Internet households? (b) An online survey of Carmex Facebook likers?

(a) Advantages: * May gain new likes to the brand * Save money; it will cost the company less to conduct a survey over the Internet * Increase Carmex brand name * Easily accessible on the web * Can reach a wide range of people

Disadvantages: * Results may not be accurate enough * Not all customers can navigate well on the Internet (ex. Elderly people) * May be time consuming for some people * “Spam blockers” may prevent the survey from being viewed * Inattentive survey answers, just to benefit from incentives and promotional offers

(b) Advantages: * Targets specific Carmex market * Cost effective * Convenient * Carmex is able to use the “likes” and “engagements” and select which one is more beneficial

Disadvantages: * Not everyone has Facebook, therefore not all Carmex users are sampled * Survey fraud; those who answer online surveys just to get the incentive (ex. Free samples)

2. (a) On a Facebook brand page, what are “engagement” and “likes” really measuring?

On a Facebook brand page, “engagement” measures how active its Facebook audience is with a specific brand through activities like posting a comment, liking a status, or by replying to one of its posts on a brand page. “Likes” are a tool to indicate the people who are interested and participate on the Carmex page.

(b) For Carmex, which is more important and why?
For Carmex, the “engagements” from their page is more important. The number of “likes” can easily be obtained through contests and promotions, this results in having people who are not really fans of the product participating for the contest. When Facebook users are actively using the page by liking and sharing posts, replying to comments, and participating in surveys, they help Carmex conduct their research more efficiently.

3. (a) What evokes consumers’ “engagement” on a brand page on Facebook?

Things that evoke “engagement” on a brand page on Facebook are things such as online polls, new products, contests, and promotions. These are great ways for the consumer to interact with the page. Specifically, an activity like an online poll will allow the customer to provide their opinion, and Carmex uses their input towards their decisions and research.

(b) What attracts consumers to “like” a brand page on Facebook?
Things such as contests and free samples evoke “likes” on Facebook pages like Carmex’s brand page. Giving away prizes is one of the best methods to attract consumers to like the brand page.

4. (a) What are the advantages of using a fixed-alternative poll question on Facebook?

The advantages of using a fixed alternative poll question on Facebook is that a simple poll question is not very time consuming, and it’s an easy way to communicate ideas from consumers in an anonymous fashion.

(b) When do you think it would be better to use an open-ended question?
It would be better to use an open-ended question when you want to know consumers’ opinions on the product. This is especially beneficial when a new product is released, as you can see what words the respondents use to describe your product. Say for example, Carmex is seeking new flavor suggestions, an open-ended question would be most appropriate.

5. (a) If you had a limited budget and two weeks to decide which two flavors to put into quantitative testing, would you choose a “poll only” or a “contest only” strategy? Why?
With a limited budget and only two weeks to decide which two flavors to put into quantitative testing, a “poll only” strategy would be the best choice. With only a short amount of time and the company needing a decision quickly, conducting a simple poll is the best option.

(b) If you had a sizeable budget and two months to make the same decision, which scenario would you choose? Why?
If there was a sizeable budget and two months to make the same decision, then we would choose a “contest only” strategy. In this case, a sizeable budget can allow marketing teams to grab the consumer’s attention with more rewarding results, such as a trip down south. With more time, setting up rules and contest promotions will drive more consumers to participate.

Appendix A

Potential Results from three Facebook Strategies

Source: Marketing 9th Canadian Edition McGraw-Hill Ryerson (P.231)