Question

In: Operations Management

Case study: In order to direct decision-making, a relatively young cosmetics company, which sells a range...

Case study:

In order to direct decision-making, a relatively young cosmetics company, which sells a range of organic and eco-friendly beauty products, decides to investigate the impact of their marketing strategy. As the company is only five years old, there has been significant investment in advertising and marketing their brand. In order to assess the impact that their marketing initiatives have had, they have implemented a four-month survey-research project in order to determine how their customers heard about their brand. Each customer was asked to complete a five-minute survey upon making an online order. The results were analysed, and it was determined that the customers heard about the company through the following means:

  • 17% through word of mouth.
  • 20% through organic online search.
  • 11% through print advertising.
  • 46% Google AdWords (online advertisements in Facebook, Google searches, etc.).
  • 6% radio advertising.

These results were compared to the amount of money spent on their three means of advertising: Google AdWords, magazine print advertisements, and radio advertising. Furthermore, the researchers compared their marketing approach to that of other cosmetics and holistic-living companies.

As the money spent on print advertising accounts for nearly 40% of their marketing spend, and radio advertising for 15%, the return on investment is very low, and thus a new strategy is needed. After interpreting all the data, the researchers suggest that the company should vastly reduce spending on print and radio advertising, and increase their investment in online advertising, including Google AdWords and Facebook advertising. Furthermore, with a shift in focus towards digital marketing, the company might need to re-structure their marketing department, and consider employing a digital marketing manager.

Answer Template:

Having read the case study, write a paragraph of 500 words in which you address the following:

  1. Based on the case study, suggest possible business areas that demand further attention or investigation in order to gain maximum insight into the ways the company can reach its sales targets while minimising their marketing spending.
  2. Given the research findings, briefly discuss any new questions that may have arisen.
  3. Briefly discuss two ways in which the company should monitor the impact of the recommendations. Your answer should explicitly state the specific business areas that might need to be monitored, and outline ways in which they can be monitored.

Solutions

Expert Solution

After the survey was conducted by the five years old cosmetic company engaged in selling organic and eco – friendly beauty products it was determined that the customers heard about the company through different means of Advertisement. The cost of advertisement and impact of advertisement is shown in following table:

Two ways in which the cosmetic company should monitor the impact of the recommendations:

  1. Direct Rating Method – In this method, the customers are directly asked questions to rate the impact of advertisement and then the effect / impact of these rating are calculated. To conclude such kind of rating method:-
    1. The company can conduct surveys
    2. Questionnaire or feedback flyers are prepare and distributed to persons who are conducting survey and customers are asked to fill the information or their feedback against these questionnaire.
    3. Toll free number is usually highlighted on the advertisements so that customers can call and the contents are recorded to analyze the impact of these ads.
    4. The rate of responses can be increased by advising customers what to do. For example some advertisements have lines in highlighting color like “Hurry Up” or “No one can hold after using our cosmetic products after using once” etc.
  1. Portfolio Tests – here are some customers who see the ads and listen very carefully to the advertisements and all the contents of the advertisements, and then they are used to recall the advertisement and their contents.

A Cosmetic Company should analyze the total number of ways they could utilize to achieve targeted sale in all possible markets and their targeted clients. These modes of advertisement are:

Search engine marketing: In the Search engine marketing uses various search engines to access target customers. For example, Google's Google Re-marketing Campaigns are a the one type of targeted advertising where the websites collect and use the IP addresses of various computers that have visited their websites to re-market their advertisement specifically for the user who has previously visited their website.

List of Top 12 most popular Search Engines available in The World

  1. Google. Google Search Engine is the best search engine in the world, which is used by maximum targeting audience
  2. Bing.com
  3. Yahoo.com
  4. Baidu.com
  5. AOL.com
  6. Ask.com
  7. Excite.com
  8. DuckDuckGo.com

Social media targeting: Social media targeting is a the type of advertising, that uses the general targeting elements such as behavioral targeting, geo-targeting, audience using socio-psychographic targeting, and collect the information from customers on various social media platforms.

For Example: Facebook is using broad characteristics of the advertisers target like Age, Gender, and Location. Moreover, they allow more narrow targeting based on Behavior, Demographics, and Interests

  • Television: On television Advertisements can be targeted to specific consumers watching digital cable, set up box or over-the-top video. Targeting may be basis according to location, gender, age, or personal interests in films, and other TV Serials and News channels etc.
  • Mobile devices: Since the early 2000s, million of people of various regions, age groups, genders are using mobile phones and mobile companies do have their data with them, which is used to search target customers through SMS and other means on mobiles.
  • Content and contextual targeting: Another name of this service used is content-oriented advertisement, as it is corresponding the context being used by the consumers. This method of targeting is used across different mediums, This is method used by ad matching system by analysing the contents on a page or finds the keywords and presents a relevant advertisement, sometimes it used pop-ups also.

Effectiveness:

By Targeting the advertiser improves the effectiveness of advertising and it reduces the wastage by creating by sending the advertising contents to the consumers who are unlikely to purchase that product and target advertising and the improved targeting will lead to lower and genuine advertising expenditures and costs.

The of Research shows that Content marketing in 2015 generated as many 3 times leads as traditional way of outbound marketing, but costs 62% less than the traditional, showing the new way of advertisement is able to becoming the ideal way to advertise to the target public advertise. The other statistics show how 86% of people are skipped television adverts and 44% of the people have ignored direct mailings, which also indicate that how the advertising to the wrong group of people was responsible for waste of resources.

Thus by appointing new Digital Manager the above suggested means of ads will be used and will be effective and result generating efforts for the cosmetic company.


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