Case Study: Carmex – Setting the Price of the Number One Lip Balm

Read the case on pages 394-396 in your text. (Additional information  regarding Carmex can be found on pages 232-234 in the text).

Watch the video supplement to the case at link http://www.viddler.com/embed/64abee32 (Links to an external site.)Links to an external site.. 

Respond to the following case question. (Disregard the questions in the text.)

The Carmex pricing structures are determined by how a firm might view  itself as an integral partner in a value network. It may be thought of  as an overall system of formal and informal relationship within which  the firm participates to procure, transform, enhance, and ultimately  supply its offering in final form within a market space. This value  network is a strategic approach to cut costs and maximize process  efficiencies, in the pursuit of the ultimate objective; to co-create  value, a most important component of the pricing structure.

You’re  a member of the corporate marketing team and you’ve been given the task  of recommending the pricing considerations for future product  introductions. Include an analysis/evaluation of the current pricing  structure (define the strategy used currently) and if you recommend this  strategy be continued for future product introductions.