Global Forces &CountryManager

Global Forces

• The Great Rebalancing– Emerging market growth > Developed market growth– Urban migration, growing labor force, declining birthrates

• The Productivity Imperative– For US, 70% of growth must come from productivity gains

• The Global Grid– Complex flows of capital, goods, info Innovation & destabilizing

volatility

• Pricing the Planet– Rising demand, constrained supplies, increased scrutiny

• The Market State– Increasing gap between rich & poor

Country Manager Global Trends

• Requires a 5-10-Year View

• Global (Re)Positioning for the Long Term

• CM Plan for the long-term−Decisions 1-3 = focus on awareness, gain distribution

−Decisions 3-5 = build market share

−Decisions 6+ = now aim to be profitable

Interpreting Feedback Creating & Leveraging Brand Equity

Period 1 Performance Measures

CompanyUnit Sales

(mill.)Total Mfr. Sales

(mill.$)

Cum. Net Regional

ContributionBrand Equity

A 96.4 110.9 -36.5 58

Awesome 46.2 54.7 -14.8 58

B 165.1 186.4 -14.7 55

IAtePaste 100.6 117.1 -67.7 56

Sonrisas 42.6 48.7 -0.2 34

Check List

• Contribution– Are prices & gross margin %s at least in line with

competition?– Are advertising & promotion %s in line with competition

(perhaps above)?– Are capacity plans consistent with sales forecasts?

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Brand Equity

• A set of assets (and liabilities) linked to a brand's name and symbol that adds to (or subtracts from) the value provided by a product or service to a firm and/or that firm's customers.Aaker, Building Strong Brands, 1996.

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Leveraging Brand Equity

• Consumers are more likely to prefer and seek stronger versus weaker brands

• Consumers are willing to pay more for stronger brands (Raise price)

• Retailers want to stock stronger brands (Expand SKUs &/or distribution)

BEI Country Indexes

Brand Equity Index by Country

BenefitPositioning

CreativeExecution

PricePositioning

SalesLeadership

Share ofMind

BrandEquity

Argentina 71 100 83 33 39 65Brazil 64 80 78 41 42 61Chile 65 100 79 32 68 70Mexico 61 100 70 68 50 71

Benefit Positioning – This factor measures how a team’s choice of SKUs reflects the demand for that benefit in the marketplace. Full credit can only be received if the SKU benefit is advertised and meets a minimum threshold for budget.

Creative Execution – This factor measures how appropriate a firm’s message is for a culture and country. Full credit (100) if new ad, right culture, right language. Multiple ads are weighted by budget.

Price Positioning – Must have 4 SKUs for this factor to be calculated. Basically checks the pricing vs. expected pricing in the market. Is the firm’s pricing consistent across SKUs? This factor makes sure that large tubes are more than medium, that multi-ingredient formulations are more than economy, etc.

Sales Leadership – Your relative market share x 100 with max of 100.Share of Mind – A combination of your relative awareness vs. the leading awareness in a category as well as absolute awareness.

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Overall (Regional) BEI Index

BEI Criteria Measures

Product Standardization

Measures the degree to which a firm’s products are standardized by comparing unique SKUs introduced to total SKUs introduced. If SKUs are the same across all countries entered, then the score is 100. Minimum of two countries and 4 unique SKUs for this factor to be calculated.

Regional Diversification

This measures the extent to which sales come from different countries. Must be in at least 2 countries to for this measure to be calculated. As sales are spread more evenly from all countries, this measure increases to a max of 100.

Consolidating Brand Equity

Weighted average of brand equity for all six countries. Weight is based on industry sales of that country.

Overall Brand EquityCombines the consolidated brand equity with the product standardization and regional diversification measures.

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BEI Country & Overall IndexesBrand Equity Index by Country

BenefitPositioning

CreativeExecution

PricePositioning

SalesLeadership

Share ofMind

BrandEquity

Argentina 71 100 83 33 39 65Brazil 64 80 78 41 42 61Chile 65 100 79 32 68 70Mexico 61 100 70 68 50 71

Overall Brand Equity Index

Product Standardization 78Regional Diversification 90Consolidated Country Brand Equity 65

Overall Brand Equity 73

Country & Overall BEIs should be > 70 for Marketing Differentiation Advantage

Exception Analysis – Identifying Opportunities

Check List (Continued)

• BEI– Is BEI at least 70 in all countries & overall?– Is Sales Leadership higher than Share of Mind?

• Are net prices (& gross contribution margins) too low? • Are relative expenditures on push (Sales Force, Promotion)

versus pull Advertising too high?

– Is Share of Mind higher than Sales Leadership?• Are net prices too high?• Are relative expenditures on pull Advertising versus push (Sales

Force, Promotion) too high?• Are targeted retailers consistent w/targeted customer segments?• Is the sales force allocated effectively to ensure consistency?• Is distribution penetration sufficient to reach targeted customers?

Sales Force Allocation

ChannelAll

StarB+B

Caremore

Driscol

Evers Loc. Reg.

Traditional 7 0 0 29 0 24 66

Self Serve 10 12 64 9 18 0 21

Hypermarket 15 11 59 0 60 0 0

Web/Other Home

0 3 3 0 3 0 0

Wholesale 8 0 0 5 5 5 13

Total 40 26 126 43 86 29 100

Distribution Penetration

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Brand# Outlets Carrying Brand

TotalTrad.

SelfServe

Hypermarket

Web/Other

Total Outlets 1,093 298 100 10 1,501

Allsmile 757 176 62 6 1,001

69% 59% 62% 60% 67%

Dentacare 0 148 56 6 210

0% 50% 56% 60% 14%

Local 1 952 92 28 0 1,072

87% 31% 28% 0% 71%