Country Manager

1. Country Manager International Marketing Simulation

2. Why a Simulation? “I hear and I forget… I see and I remember… I do and I understand”

3. The Environment • The Toothpaste Category Manager for an international corporation is expanding into Latin America • Six countries offer viable market potential • Each market has unique environmental, buyer, competitive, and distribution characteristics • The ultimate goal is to develop a REGIONAL presence in Latin America, doing so through a sequential market entry approach

4. The Environment - Countries

5. The Environment - Competition • Starting Situation: Multiple firms competing in different countries • 4 International Competitors: • B&B Healthcare • Caremore • Driscol • Evers • Also… regional and local competitors • NOTE: All individuals/teams play “against” the computer

6. The Environment - Consumer • Consumers differ cross-nationally and by segment in terms of: • Toothpaste size, delivery system, and vehicle preferences • Needs they are trying to satisfy with regard to formulation (prevention of cavities, whiter teeth, good taste) • Competitive offerings/choices • Price sensitivity • Customers are more likely to purchase a brand that they know and can find in their preferred store.

7. The Product - Toothpaste • Packaging and Formulation Variations • Sizes: Travel, Personal, and Family • Delivery: Tube, Pump • Vehicle: Paste, Gel • Formulations: Basic, Whitener, Healthy, Kids • Your firm has a number of different combinations of these available to introduce as unique SKUs.

8. Decisions – Market Entry(Consolidated Menu) • Issues to consider for “Market Entry/Exit”: • Market potential and growth • Synergies with other/existing markets • Regional Customization vs. Standardization • Competitive intensity • Distribution • Cost structures – production/distribution • Shipping and tariffs • General economic/political outlook

9. Decisions – Production Location & Capacity (Consolidated Menu) • Issues to consider for “Productive Capacity” • Production will take place in USA unless a single Latin American plant is opened. • Any production necessary to meet demand beyond what is planned takes place in USA. • Local production goes to local markets first. • One year to build capacity.

10. Decisions – Market Management (Individual Country Menus) • SKUs to offer (based on target & positioning) • Price in local currency and promo allowance • Advertising campaign and budget including localization issues • Distribution channels to support • Sales Force / Use of Wholesalers • Promotional Support • Production – U.S. plant versus Latin American plant • Forecasts • Don’t Bother With the Pro-Forma Unless Using it to Project on Hypothetical Situations

11. Performance Measures • Index numbers – especially brand equity measures • Performance in countries entered • Overall performance in Latin America • Market share and net contribution • How have you left the company positioned for the future?

12. Country Manager Logistics • Print out decisions before advancing • After advancing, print out administrator’s and turn it in • You are allowed one replay per period but no restarts • Important: Back-up your decisions!

13. Final Considerations • Marketing and Business Strategy drives your decisions – make sure you have one! • Focus on how to best serve your target customers through a total offering – product, marketing, service, and price • Importance of team organization • Decide on responsibilities • But don’t overspecialize - limits what you learn

14. Final Considerations • Manage your margins – understand financial implications of decisions • Understand fixed and variable costs • Long term vs. short term • Make wise investments • Try new approaches – apply concepts – experiment – have fun!