Country Manager Marketing Plan Torben Nielsen (5146600) & Mike Nagtzaam (5320437) July 8, 2009 International Marketing MKT3020 Professor Rob Sloan
Excecutive Summary ¾
Goal: Increase retail sales and market share overall. (More specifically to capture 2% market share in Brazilian economic brand using hypermarket retail outlets) and continue to gain in niche markets of Chile and Peru
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After two years of operation in Peru and Chile, All Star has decided to re‐ position themselves with the goal to increase overall sales and market share by focusing almost exclusively on the economy brand through hypermarket retail distribution.
New Opportunities – – –
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Hypermarket represents 43.3% of the overall toothpaste market in Brazil which is the highest populated South American Country. Brazil also has the highest GDP among South American Countries while continuing to show steady growth. Among industry leaders in Brazil, there is next to no focus on Hypermarket, Economy brands, with the top two direct competitors (Regional 1 and Local 1) only holding 6.6% retail sales in this category. It is also evident that families that purchase economy brands from hypermarkets are extremely price sensitive which opens up the door for All Star to use a low cost pricing strategy during the penetration stage.
Situation Analysis
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All Star toothpaste brand has steady growth of manufacture sales, overall brand equity and total sales over their three years of operation in Chile. Although sales are not extremely high, we have managed to remain profitable in the smaller markets that we have selected. All Star can also boast at 15.1% market share of the total toothpaste market in Chile.
Competitor Analysis Market Share
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The companies that pose direct competition for All Star while entering the Brazilian market are Local 1, Regional 1 and Dentacare.
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All offer Economy size toothpaste primarily within the hypermarket
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Competitor Analysis Retail Sales
• Although they hold a majority of the Economy market share, they only hold a 6.6% of retail sales within Hypermarkets.
Competitor Analysis Pricing
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Both Regional 1 and Local 1 sell their products at low price only slightly higher than $3(BRL) compared to well about $4(BRL) that all other companies charge.
Regional Marketing Strategy Enter Brazilian Market ¾ Objectives 1. Increase Sales Overall 2. Diversify from niche markets, compete in Hyper‐ Markets 3. Increase competition dominated by Local and Regional brands
Why Brazil? Entry Rationale • • •
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Growing popularity of Hyper Markets Brazil represents the highest population at 196,342,592 Shopping habits show that 43.3% of all retail sales are through Hyper Markets and growing One of the highest GDP’s at $2,030 (Billion USD) with 5.2% growth Currently, all the companies in Hyper Markets compete on ‘white variety’ not Economy Economy – currently 173.6 million unit sales
Manufacturing Strategy Build Plant in Brazil • • • •
Generate sales and compete for market share against Local and Regional Brands Increase local awareness of All Star Brand and give a national identity Initial capacity of 1 million units Reduce production costs & distribution from U.S. Plant
Rationale • • •
Reduce Tariffs, Shipping Costs Compete on lower price (from above savings) Gain market share from Local and Regional
Country Level Marketing Tactics ‐ Chile • Channel Strategy – Move to Hyper Markets – Extremely high growth channel
• Product Strategy – White occupies 43% sales – Work to push all varieties of White and reduce Economy
• Pricing Strategy – Highly competitive pricing with a low cost strategy
• Advertising Strategy – Family focus – with both WHITE & ECONOMY product messages – Budget will be increased to align with competitors
Country Level Marketing Tactics ‐ Peru • Channel Strategy – Extend into Hyper Market – Intend to gain early entry and capitalize on rising popularity of this channel
• Product Strategy – Major competition on HEALTHY & ECONOMY – Add WHITE to the Hyper Channel
• Pricing Strategy – Become more competitive on price – Increase retail allowances
• Advertising Strategy – Reduce advertising and align with competitors – Spend in 2 – 3.5 million PEN range – Money saved will be allocated towards promotion, allowances, price cuts
Country Level Marketing Tactics ‐ Brazil • Channel Strategy – Enter Hyper Market – 786 million BRL in sales Period 4 – Direct entry to market, with no real competition in ECONOMY variety
• Product Strategy – Economy brand, accounted for 173.6 million BRL
• Pricing Strategy – Compete with Regional 1 on economy with lower prices and greater allowances
• Advertising Strategy – Family focused advertising – ECONOMY – Allocation of 20 million BRL budget
ProForma � Brazil
ProForma � Chile
ProForma � Peru
Implementation – GANTT Chart
Conclusion • There is a significant opportunity for All Star to obtain its goal of increased retail sales and market share within a relatively reasonable time frame. • Pending our sales results and profit margin following period 5, All Star will consider building a manufacturing plant domestically with the intention of reducing shipping costs, avoiding tariffs and creating a strong national identity.