International Marketing Simulation Country Manager International Marketing Simulation

“I hear and I forget… I see and I remember… I do and I understand” Why a Simulation? “I hear and I forget… I see and I remember… I do and I understand” Country Manager

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 Country Manager

The Environment - Countries Country Population (Millions US$) GDP (Billions US$) Toothpaste Retail Sales Argentina 37 374 90.4 Brazil 172 1,035 830.4 Chile 15 185 93 Mexico 100 815 211.4 Peru 27 112 50.4 Venezuela 23 195 31.1 Country Manager

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 Country Manager

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. Country Manager

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. Country Manager

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 Country Manager

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. Country Manager

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 Country Manager

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? Country Manager

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! Country Manager

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 Country Manager

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! Country Manager