Summary of "Country Manager Simulation Results Summary | GMS 522 | Ryerson University 2017"
Summary of “Country Manager Simulation Results Summary | GMS 522 | Ryerson University 2017”
This video presents a detailed performance report and strategic review of the company All Smile’s expansion into the Latin American toothpaste market. The speaker, Marcus, a member of the marketing and management teams, outlines the rationale, strategies, operational decisions, challenges, and lessons learned during the expansion.
Main Ideas and Concepts
Rationale for Expansion into Latin America
- Sales in existing markets were plateauing.
- Latin America was chosen due to proximity to factories and low entry barriers.
- Seven target countries: Argentina, Brazil, Chile, Colombia, Mexico, Peru, Venezuela.
Market Entry Strategy
- Enter one market first, then expand rapidly.
- Shift production to Latin America to reduce tariffs and increase profitability.
- Brazil was chosen as the initial market because of:
- Large market size.
- High economic growth.
- Strong purchasing power.
- Favorable trade ties facilitating regional expansion.
Order of Market Entry
- Brazil (production established).
- Mexico (initially supplied from home plant due to low tariffs).
- Argentina (supplied from Brazil plant).
- Colombia (supplied from Brazil plant).
- Peru, Chile, Venezuela (smaller, less profitable, entered later).
Manufacturing Plant and Capacity
- Plant located in Brazil.
- Capacity: 235 million units/year at report time.
- Production increased annually by 25 million units or more.
- Local production essential to reduce shipping costs and improve margins.
Marketing Strategy
- Low brand awareness and image required a low-cost leadership strategy.
- Initially kept prices low and maintained advertising to build market share.
- Gradually raised prices after establishing presence.
- Introduced niche products after profitability was achieved.
- Distribution focused on traditional retail channels (self-serve, hypermarkets).
- Online and alternative distribution channels were not explored but suggested for future improvement.
- Advertising efforts were diverse but yielded low ROI; no successful formula found.
- Ads were localized in language and targeted majority demographics.
Performance and Results
- Sold 264.3 million units in the final year, capturing 14.4% market share.
- Generated $251.5 million in sales.
- Brand equity index reached 61.
- Growth and profitability steadily improved year-over-year.
- Strong presence in all markets except Venezuela.
- Company poised to become a leading brand in the region.
Key Lessons Learned
- Expand quickly to new markets; sales potential outweighs investment costs.
- Increase local production capacity rapidly to reduce costs.
- Start with low prices and low profit margins; adjust prices upward after market establishment.
- Experiment with many advertising campaigns, identify successful ones regionally.
- Use customer data to prioritize product SKUs; focus on large markets first before niche segments.
- Continuously expand product lineup to target more customer segments and improve sales.
- Avoid imitating competitors; focus on proactive, strategic planning.
Detailed Methodology / Instructions Presented
Market Entry and Expansion
- Analyze demographics and economic factors to select initial market.
- Establish local production in the first market to leverage trade advantages.
- Expand sequentially into neighboring countries, prioritizing large markets.
- Enter smaller, less profitable markets later to maintain regional presence.
Production Strategy
- Build and scale a manufacturing plant in the target region.
- Increase production capacity annually to meet growing demand.
- Shift production from home plant to local plant to reduce tariffs and shipping costs.
Pricing and Marketing
- Implement low-cost leadership initially to gain market share.
- Maintain advertising presence targeting key demographic groups.
- Gradually raise prices and reduce allowances to improve profitability.
- Introduce niche products after establishing core product profitability.
- Focus on traditional retail distribution channels initially.
Advertising Approach
- Create multiple advertising campaigns in local languages.
- Target majority demographic groups.
- Measure ROI and continue with successful campaigns.
- Recognize advertising as an area for improvement.
Product and Market Management
- Use customer information to decide SKU offerings.
- Prioritize satisfying large markets before niche markets.
- Expand product lineup continuously to cover more segments.
- Avoid copying competitors; stick to own strategic plan.
Speakers / Sources Featured
- Marcus – Main presenter, member of the marketing and management teams for All Smile’s Latin America project.
This summary encapsulates the strategic approach, operational execution, and lessons learned from All Smile’s Latin American market expansion as presented in the video.
Category
Educational
