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IB IB Business Internal Assessment, I could not have

IB Business and Management HL Internal Assessment                                                   To what extent would the implementation of Facebook Analytics by the Wash Zone Car Wash increase sales through customer awareness?Madison BurtCandidate Number: N/AWord Count: 1,952 wordsI confirm that this work and information is my own, and that I have acknowledged the words of all others, written or verbal.Signature: __________________________________Date: ______________________________Acknowledgements I would like to acknowledge my father, Keith Burt, Co-Owner of the Wash Zone Car Wash, for his immense help with this enormous research project. He was integral in allowing me to have access to all of the Wash Zone Car Wash’s sales data, as well as funding for the Facebook/Instagram ads. Additionally, I would like to acknowledge Jimmy Belanger, Co-Owner of the Wash Zone, for allowing me to work with the business, as well as Greg Wilfrong, Manager, for sending me all of the information. Lastly, I would like to recognize Mrs. Forster for her guidance and expertise, as she has helped me gain a firm understanding of a plethora of business concepts. Thank you so much for your time and effort in assisting me with my IB Business Internal Assessment, I could not have completed it without your help.Table of ContentsExecutive Summary………………………………………………………………4   Research Proposal and Action Plan ………………….…………………………..5           Introduction………………………………………………………………………8     Research Question………………………………………………………………..8     Methodology Employed………………………………………………………….9     Main Results and Findings……………………………………………………….10   Analysis and Discussion…………………………………………………………15   Conclusion and Recommendations………………………………………………18  Bibliography and References……………………………………………………20   Appendices……………………………………………………………………….22   Executive Summary The Wash Zone Car Wash is one of the most popular car washes in the Plymouth area, however this past year their sales dropped by approximately 10%. The owners of the Wash Zone believe this is largely due to a lack of new customers. Because of this, I have reached the question: To what extent would the implementation of Facebook Analytics by the Wash Zone Car Wash increase sales through customer awareness?The Methodology Employed section articulates the research conducted, which includes primary and secondary sources such as a customer survey, Facebook Analytics results, and DemographicsNow. Market research, a SWOT Analysis, Competitor Analysis, and Cost-Benefit Analysis were used to analyze data.The survey results show a 12% increase of new customers to the Wash Zone from November to December of 2017, and sales data show a significant jump during that time period also. While the use of Facebook Analytics definitely impacted awareness, it’s inconclusive as to whether it actually increased sales, as factors like weather must be considered. I recommend that further research be conducted to ensure Facebook Analytics value to The Wash Zone, and also recommend using below-the-line promotion as a future marketing technique to reach all age demographics.Word Count: 200Research Proposal1. Research QuestionTo what extent would the implementation of Facebook Analytics by the Wash Zone Car Wash increase sales through customer awareness?2. Proposed MethodologyRationale for study: The Wash Zone Car Wash is owned and operated by my father, Keith Burt, and has been very successful thus far, however is looking to expand and attain a larger customer base. By running Facebook Ads, they would be able to market to a much larger group of people and increase overall customer awareness.Areas to be covered: SWOT analysis 1.3- Assesses the strengths, weaknesses, opportunities and threats of the Wash Zone using Facebook Analytics.Cost-Benefit analysis 1.6- Analyzes the profitability of using Facebook Analytics.Market Research 4.4- Determines the Wash Zone’s target market and the viability of using social media as a marketing technique.Competitor analysis 4.2- Discovers how the Supercenter Car Wash uses social media to advertise their product.Primary Sources of Information:Customer surveySales reportsFacebook Analytics resultsSecondary Sources of Information:The Business and Management textbookDemographicsNow: Business and PeopleThe Supercenter Car Wash Facebook pageOrganizations/Individuals to be approached: I’ll give my survey to Wash Zone customers. I’ll also ask the owner for information, as he’s willing to contribute any useful data to aid my research. I’ll receive the statistics on how many customers the car wash has each month along with sales data, which I can track before and after social media is implemented.Methods to be used to collect and analyze data: I’ll collect primary data through a survey using cluster sampling by reaching out to customers, as well as through sales reports and the results of Facebook Analytics. I’ll be using multiple types of graphs to analyze the information that is discovered, such as a tables and pie charts.Project Timeline: First I’ll create a Facebook page and run 4 Facebook Ads throughout November. Afterwards, I’ll compare sales data to determine whether the ads increased overall sales in November and December. Next, I’ll use this information to analyze and discuss my research question in the IA paper.3. Anticipated DifficultiesThe business owner is my father and may be biased when giving me information. This can be prevented by having the manager send the data, ensuring its credibility. Additionally, weather could impact the amount of people going to the car wash and may make my research inconclusive, which cannot be prevented but must be considered. Also, if there are too many words in an ad, Facebook limits how many users it can reach, so text must be minimized.Action Plan4.  ModificationsDelay in receiving payment information- Ad 1 ran on 11/24/2017, Ad 2 ran on 11/30/2017, Ad 3 ran on 12/4/2017 and Ad 4 ran on 12/8/2017. December’s sales will now be analyzed.12/5/2017- I still did not have all of my Main Results and Findings, began Analysis and Discussion.Survey distributed on 12/15/2017.Word Count: 500IntroductionIn the United States alone, over 38,000 new cars are sold each day- a number that has risen every year since 1951. With this influx of car sales, the car wash industry is growing at an unprecedented rate. It is a constant competition for businesses to capture these potential new customers, and marketing techniques play a vital role in which car washes come out on top. The Wash Zone Car Wash is a business in Plymouth, MI that is owned and operated by Keith Burt and his partner Jimmy Belanger. Wash Zone offers a wide range of car maintenance services, including technologically advanced washes ranging from $6 to $18, as well as free vacuums and towels for customer use. Though they have been extremely successful and have many satisfied, loyal customers, they’re struggling to gain new patrons around Plymouth due to increased competition and an overall lack of marketing. To combat this issue, they’ve decided to utilize advertising through Facebook to increase marketing efforts and raise awareness of the Wash Zone Car Wash. This has led me to the following research question: To what extent would the implementation of Facebook Analytics by the Wash Zone Car Wash increase sales through customer awareness? Word Count: 203Methodology Employed To collect primary research, I’ll conduct a customer survey using cluster sampling in which 50 surveys will be given to customers exiting the car wash, an amount I believe to be a representative sample of the Wash Zone’s pool of clientele. Also, I’ll use sales reports to analyze the change in sales before and after running the series of ads and interpret the Facebook Analytics results. For secondary research, I’ll look at The Supercenter Car Wash’s Facebook page, as they are the Wash Zone’s main competitor. Additionally, I’ll utilize DemographicsNow and the Business Management textbook for supplementary information.To analyze the above research, I’ll first use a Cost-Benefit analysis (1.6) to analyze sales data and determine whether the ads are profitable. Next, a SWOT analysis (1.3) will examine the strengths, weaknesses, opportunities and threats associated with the use of Facebook analytics, taking into consideration customer demographics and costs. Third, a competitor analysis (4.2) will look at how The Supercenter Car Wash uses Facebook and Instagram to market their product, while market research (4.4) will be conducted through DemographicsNow to determine the demographic, psychographic and geographic data on consumers surrounding Plymouth.Because the Wash Zone’s owner is my father, there may be bias in my survey results and the sales information. To eliminate this, I’ll conduct the survey on a day that my father is not working, and will receive all sales data from the Wash Zone manager. The secondary research is valid as it comes from verified sources.If I were to complete this project over again, I’d run more Facebook ads over a longer period of time. There are too many outside factors to consider (weather, buying habits, etc.), so more conclusive results would be available if there was more sales information to analyze.Word Count: 299Main Results and FindingsFigure 1: Facebook Ad 1Figure 2: Facebook Ad 2Figure 3: Facebook Ad 3Figure 4: Facebook Ad 4Figure 5: Survey Question 3Figure 6: Survey Question 4Figure 7: Sales ReportsFigure 8: Vehicles Available within PlymouthFigure 9: Population by Age within PlymouthInteresting discoveries emerged from the primary and secondary research collected. First, the four Facebook Ads had an overall reach of 10,843 Facebook and Instagram users within 7 miles of the Sheldon location (Figures 1-4). Most people reached were between ages 18 and 34 (there was a major drop off in the next age group of 35-44 year old users), and more males were reached than females. Next, sales data from 2016 to 2017 (Figure 7) show that sales in 2017 are significantly lower than sales in 2016. It is important to note, however, that sales increased by $12,354.59 from November to December 2017 after dropping going into November. Additionally, according to Figure 5, 12% of the 50 people surveyed heard about The Wash Zone via social media (either Facebook and/or Instagram). Moreover, those same 6 customers of the 50 surveyed were all first time customers to The Wash Zone. To further support these findings, in 2017 the average Plymouth household owned approximately 1.93 cars (Figure 8), a number that is steadily rising each year. Also, the average age of residents in the Plymouth area is 32, with the mode age group being 5-18 year olds.Word Count: 247Analysis and DiscussionAn abundance of business tools, techniques and theories must be utilized to determine the extent of which the implementation of social media has increased the Wash Zone Car Wash’s sales through customer awareness. First, a competitor analysis is very helpful in deciding the usefulness of social media as a promotional technique. The Supercenter Car Wash in Plymouth is the Wash Zone’s biggest competitor, and has had a Facebook page since 2014. They post twice a week and consequently have a large following of 410 Facebook users, which is much higher than the Wash Zone’s 31. Using a competitor analysis is highly beneficial as The Wash Zone can observe what The Supercenter does well and implement it into their own practices. Based off of the success that The Supercenter has seen through the utilization of social media, it would likely be worth the Wash Zone’s time and money to use it as well. On the other hand, since The Supercenter frequently utilizes Facebook Analytics, they may have already established a loyal customer base with many Facebook users. It could therefore be a waste of money for the Wash Zone to market to people who already frequent another car wash and are unlikely to change their current habits. Market research is also a critical tool that can help to determine the benefits of social media as a promotional technique. Facebook Analytics creates a Facebook and Instagram ad that is able to reach thousands of people, and is especially useful if your target market is between ages 15 and 35, where social media use is most prevalent. According to DemographicsNow, the average age of a person within 7 miles of the Wash Zone is 32, with the largest age group being 5-18 year olds (Figure 9). Over 70% of people ages 14-24 utilize more than one social media platform, which means that they are highly likely to come across the Wash Zone’s ad on Facebook or Instagram. This is supported by my primary research, as 4 out of the 6 people surveyed that reported hearing about The Wash Zone via social media were between the age of 18 and 24. It is also important to note that this could be due to the fact that I surveyed people between 3:00 and 5:00 when many older people are still at work, so the survey results may be biased. Another useful business strategy is a Cost-Benefit analysis. Facebook/Instagram allows you to choose your daily budget when purchasing ads, so the amount you pay can be customized to how much you can afford. The more that you are willing to pay, the more people you are likely to reach with your ad. Facebook Analytics uses your budget as a baseline, and may go slightly over/under depending on how many people can be reached in a certain day. A daily budget of $20 would allow your ad to have a reach of between 2,300 and 6,100 Facebook/Instagram users, while a larger budget of $50 would reach between 5,400 and 14,000 users in an area of your choosing. The first ad that was run for The Wash Zone Car Wash reached only 141 people in a 7 mile radius of the business’s location for the price of $12.49, while the second ad reached 5,708 people for $28.82 after changing the ad format (the first ad had too much text, so it’s reach was limited by Facebook). Though The Wash Zone has spent $71.31 on these ads, total sales have increased approximately by $12,354.59 from November to December, turning around from a downward trend (Figure 7). This could be due to many other factors such as weather, consumer buying habits and the upward trend of the economy, however ultimately the Wash Zone profited by $12,283.28 after deducting ad costs. In this case, the benefits outweigh the costs. Lastly, I conducted a SWOT Analysis to gain a better understanding of the strengths, weaknesses, opportunities and threats associated with using social media as a promotional tool. From a glance, it is clear that there are many more opportunities than threats, while the strengths and weaknesses are fairly even. One major strength of the Wash Zone Car Wash is that they already have high profit margins and can therefore afford to absorb the relatively low cost of advertising, which is one of the largest weaknesses of this venture. Additionally, an important opportunity is that Facebook allows for maximum customization of many different aspects of the ad, such as the target market and the daily budget. This is beneficial as The Wash Zone can ensure that they are getting the most out of their money by limiting the ad’s range to a 7 mile radius of the car wash, as we did. By doing this, we can eliminate users who are unlikely to ever visit the Wash Zone due to its distance. Finally, it is important to keep in mind that The Supercenter Car Wash, Wash Zone’s largest competitor, has already been utilizing this tool for years and may already be established in the area. This poses a threat, as people who see the ad may already be loyal to The Supercenter.Word Count: 876Conclusion and Recommendation At the beginning of this project, The Wash Zone set out to discover whether the use of Facebook Advertising would help boost sales through customer awareness. After collecting and analyzing a plethora of primary and secondary information, including a customer survey and extensive sales records, it can be concluded that: The four ads that we ran did have an impact on customer awareness, as 12% of the customers surveyed visited the Wash Zone as a result of seeing the ads. Though the sample size was only 50 people, that is still a significant increase.It is difficult to conclude whether the massive increase in sales is linked to the ads, as there are so many outside factors that also contribute to how many people purchase a car wash. The largest one is weather; as the weather worsens going into December, people typically get their car washed more.Younger audiences respond more to the Facebook ads, indicating that the ads are most beneficial when looking to gain customers between ages 16 and 34. These conclusions are very useful in deciding the next step that the Wash Zone should take in it’s marketing venture. Based on the above statements, it can be recommended that:Further research should be conducted to gain a better understanding of the value that Facebook Analytics can provide to the Wash Zone. While the results are currently inconclusive, by purchasing weekly ads for three additional months concrete answers may be reached.The Wash Zone should incorporate Below-the-Line marketing as well to appeal to consumers in an older demographic, as these people tend to respond more to newspaper advertisements and personalized emails. This should be done in addition to the social media ads to reach the maximum amount of potential customers. More social media advertising platforms should be used, such as Twitter Analytics and LinkedIn. These are simple to implement, not very costly, and would reach the social media users who do not frequent Facebook/Instagram.Word Count: 327Bibliography and ReferencesEasy Analytic Software, Inc., et al. “Complete Demographic Summary Report.” DemographicsNow, Gale, 2017, dnow.galegroup.com/dnow/?p=DNOW&u=lom_accessmich. Accessed 12 Jan. 2018.Experian Marketing Solutions, Inc. “Demographic Snapshot Summary Chart Report.” DemographicsNow, Gale, 2017, dnow.galegroup.com/dnow/?p=DNOW&u=lom_accessmich. Accessed 12 Jan. 2018.Facebook. “Facebook Analytics.” Facebook, 2017, www.facebook.com/washzonecw/promotions/?refSource=www_consolidated_promote_button. Accessed 12 Jan. 2018.—. “Plymouth Super Center.” Facebook, 2014, www.facebook.com/pages/Plymouth-Super-Center/164520960263763. Accessed 18 Jan. 2018.Forbes. “How Many Cars, on Average, Are Bought in the US Each Year?” Forbes, 10 May 2017, www.forbes.com/pictures/efkk45efkmk/how-many-new-cars-on-average-are-bought-in-the-us-each-year/#707bb31d3c40. Accessed 12 Jan. 2018.Hoang, Paul. Business and Management. 2nd ed., IBID Press, 2011.IBISWorld. “Car Wash & Auto Detailing in the US: Market Research Report.” IBISWorld, Aug. 2017, www.ibisworld.com/industry-trends/market-research-reports/other-services-except-public-administration/repair-maintenance/car-wash-auto-detailing.html. Accessed 12 Jan. 2018.Office of Adolescent Health. “February 2016: Teens’ Social Media Use: How They Connect & What It Means for Health.” HHS.gov, 13 May 2016, www.hhs.gov/ash/oah/news/e-updates/february-2016-teens-social-media-use/index.html. Accessed 18 Jan. 2018.Plymouth Supercenter. “Plymouth’s Premier Car Wash.” Plymouth Supercenter, 2018, www.plymouthsupercenter.com/car-wash/. Accessed 12 Jan. 2018.Wash Zone Car Wash. “Wash Zone Car Wash.” Wash Zone Car Wash, 2018, www.washzonecarwash.com/. Accessed 12 Jan. 2018.AppendicesAppendix A: Copy of Customer SurveyAppendix B: SWOT AnalysisAppendix C: Facebook Analytics Ad 1 (Original)Appendix D: Facebook Analytics Ad 2 (Revised) Appendix E: Survey Results

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