The International Marketing Simulation Country Manager The International Marketing Simulation

Welcome to Country Manager! CountryManager is an International Marketing simulation focusing on market entry and expansion: You play the role of Toothpaste Category Manager for a major consumer products company about to enter the Latin American market For the next ten years, your team will build the “Allsmile” brand in one market and, ultimately, expand into other Latin American markets Develop and implement strategies that are attractive to customers in each country and profitable for Allstar Brands

Six countries offer viable market potential The Environment Six countries offer viable market potential Argentina, Brazil, Chile, Mexico, Peru, Venezuela 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

GDP (Billions $) Purchasing Power Parity Toothpaste Retail Sales The Environment Country Population (Millions) GDP (Billions $) Purchasing Power Parity Toothpaste Retail Sales (Millions US$) Argentina 40.9 558 208.4 Brazil 198.7 2,024 642.9 Chile 16.6 244 124.9 Mexico 109.9 1,466 292.0 Peru 29.5 253 59.8 Venezuela 26.8 355 50.0 Note: For L.A. Scenario, release 2010

Environment - Competition Starting situation: multiple firms competing in different countries 4 international competitors: B&B healthcare Caremore Driscol Evers Plus… regional and local competitors All individuals/teams play in benchmark competition mode and face the same environment

Consumers Defined by lifestyle (younger, families, older) and primary need (economy, whitener, health, kids) Consumers differ cross-nationally and by segment in terms of: Toothpaste size, delivery system, and texture preferences Needs they are trying to satisfy with regard to formulation (prevention of cavities, whiter teeth, good taste) Price sensitivity Preferred store / distribution outlet Customers are more likely to purchase a brand that they know, meets their needs, and can find in their preferred store.

The Product - Toothpaste Packaging and formulation variations Sizes: travel, personal, and family Delivery: tube, pump Texture: paste, gel Formulations: basic, whitener, healthy, kids Your firm has 21 different combinations of these available to introduce as unique SKUs. More may become available in future years.

Key Strategic Decisions What Country / Market(s) to Enter? Consumer Segment(s) to Target within countries entered Choice of Distribution Channel(s) within countries entered Where to Source Production? Home and/or one Latin American country

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

Plant and Production Decisions Issues to consider for plant location and sourcing options: Production will take place at Home until a Latin American plant is opened Only one plant may be built in Latin America One year to build capacity (100 mill/yr.) Any production necessary to meet demand in Latin America beyond plant capacity takes place at Home In LA countries other than where you build the plant, you choose Home or LA sourcing Local production goes to local market first

Plant and Production Examples You have entered Argentina, Chile, and Mexico Based on your decisions, demand in Argentina is 40 million units, demand in Chile is 20 million units, and demand in Mexico is 30 million units You choose to source demand in Argentina and Chile from the plant in Argentina, and Mexico from the Home plant Example 1: Your plant is located in Argentina, with 30 million units of productive capacity What Happens? 30 Million units of demand in Argentina will be sourced from the plant in Argentina 10 million units of demand in Argentina will be sourced from Home All demand in Chile and Mexico will be also fulfilled from the Home plant

Plant and Production Examples You have entered Argentina, Chile, and Mexico Based on your decisions, demand in Argentina is 40 million units, demand in Chile is 20 million units, and demand in Mexico is 30 million units You choose to source demand in Argentina and Chile from the plant in Argentina, and Mexico from the Home plant Example 1: Your plant is located in Argentina, with 50 million units of productive capacity What Happens? 40 million units of demand in Argentina will be sourced from the plant in Argentina 10 million units of demand in Chile will be sourced from the plant in Argentina The other 10 million units of demand in Chile and all demand in Mexico will be fulfilled from the Home plant

Which Market to Enter? Your first priority is to determine which of the six countries recommended by the board is the most attractive for Allsmile; The information accessible from the Environment, Consumers, and Competition menus will allow you to compare the markets according to many important factors, including: political, economic, geographic and social/demographic considerations issues directly related to manufacturing, distribution, marketing and sales in the countries you are considering competition Compare market opportunities in the simulation reports, as described further in the student manual and demo.

Entering the Market(s) Once you have made the decision to enter new market(s), you will need to decide how to launch your product, including: Selection of SKUs Price of each SKU in local currency Advertising campaigns Selection of channels and channel support The information accessible from the country detail reports will allow you to: Decide on target markets within a country Recognize competitive positioning and strategy Research the options within your selected market by clicking a Country name link to open detail reports, as described further in the student manual and demo.

Things to Keep in Mind Set your regional strategy first Overall strategic framework drives country-level decisions Plan for the long-term Decisions 1-3 = focus on awareness, gaining distribution Decisions 3-5 = build market share Decisions 6+ = now aim to be profitable Recognize regional strategic issues Trade agreements Standardization vs. Customization Don’t forget the basics! 4Ps – Product, Price, Promotion, Place Competition