Transcript StratSim - Villanova University

Country Manager
International Marketing Simulation
Why a Simulation?
“I hear and I forget…
I see and I remember…
I do and I understand”
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The Environment
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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
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The Environment - Countries
Country
Population
(Millions
US$)
GDP
(Billions
US$)
Toothpaste
Retail Sales
(Millions US$)
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
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The Environment - Competition
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Starting Situation: Multiple firms competing in
different countries
4 International Competitors:
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B&B Healthcare
Caremore
Driscol
Evers
Also… regional and local competitors
NOTE: All individuals/teams play “against” the
computer
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The Environment - Consumer
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Consumers differ cross-nationally and by segment in
terms of:
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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.
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The Product - Toothpaste
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Packaging and Formulation Variations
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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.
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Decisions – Market Entry
(Consolidated Menu)
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Issues to consider for “Market Entry/Exit”:
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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
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Decisions – Production Location &
Capacity (Consolidated Menu)
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Issues to consider for “Productive Capacity”
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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.
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Decisions – Market Management
(Individual Country Menus)
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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
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Performance Measures
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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?
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Country Manager Logistics
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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!
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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
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Decide on responsibilities
But don’t overspecialize - limits what you learn
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Final Considerations
Manage your margins – understand
financial implications of decisions
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Understand fixed and variable costs
Long term vs. short term
Make wise investments
Try new approaches – apply concepts –
experiment – have fun!
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