Marketing Plan for AllStar’s AllSmile’s Toothpaste (Simulation)
Allstar’s Allsmiles Toothpaste
Marketing Plan for Thailand, Philippines, China and India
Seray Anil, Mridul Kapoor, Yilin Lu, Alexander Rizk, and Brooke Werp
Table of Content
Company and Product/Service Overview
Goals for the Region
Competitive Analysis and Strategy for the region
Segmentation, Target, and Positioning
Allsmiles is dedicated to offering quality and affordable toothpaste to all its consumers. Our portfolio includes a variety of combinations of different toothpaste solutions to meet the demands of each market segment. After seeing successful growth in our traditional markets, we now plan to enter the Asian markets of Thailand, Philippines, China, and India. While there is high local as well as regional competition in these markets, data shows that the demand for quality toothpaste is growing at an increasing rate. All Smiles strategy is to emphasize the quality and value-based price for the products we offer. At the start, we will be exporting our product from our home plant. The management of Allsmiles in the region consists of five members with four country managers, one for each country, and a regional president to oversee the operations. The salary of the sales staff differs for each country depending on their legal and economic requirements. Based on our analysis we will be breaking even in period 5 with profitability starting period 6. Our goal is to increase our market share in every country, by offering attractive pricing and promotion using multiple channels of distribution.
Company and Product/Service Overview
Allstar is a business-to-consumer international enterprise that sells prescription and OTC drugs as well as personal care products. Founded almost a century ago, the $8.9 billion company currently competes with large and small firms contingent upon the specific product market. Sales in their traditional areas of operation of Western Europe, North America, and Australia have evidently performed well, but due to the mature nature, aging and robust competition, and slow-growing populations of these markets, Allstar is striving to enter the Asian arena.
Goals for the Region
All Smiles goal for Asian markets is to utilize our operational knowledge and expertise gained in our traditional markets, while also altering our product to meet consumer needs. We aim to decrease production costs by building a facility in Thailand in period 3 to cater to increase profit margins. By investing in advertisements and increasing our product offering we aim to increase our brand equity in the region three folds.
In order to better understand each market and to develop the appropriate strategies, we developed a SWOT analysis for each market separately. Since the strengths and weaknesses are internal elements and are unique to the firm, they won’t vary from one market to another.
Thailand is one of the least competitive markets in the region. There are only 3 regional/local competitors and no international brands. No brand is producing formulation for ‘’Kids’’, or small and large sizes in ‘’White’’ and ‘’Healthy’’. Our COGS is relatively low which enables us to charge lower prices and higher allowances in order to capture a higher market share. Since our plant is in Thailand, we will enjoy minimal shipping costs.
The Philippines is also one of the less competitive markets. There are only 3 regional/local competitors and no international brands. Only medium size toothpaste with whitening benefit is available and no options for kids. No brand has a clear majority share of the market.
China is an extremely competitive market, specifically in the toothpaste industry. There are two regional/local and three international competitors. All formulations are sold in the market with two major competitors which will result in low MSRPs and high allowances.
In the Indian market, Allsmiles has to compete with three international and one local competitor. Data shows Dentacare and Local brand holds the highest market shares and they are offering the lowest MSRPs and highest allowances. The number of salespeople required is relatively high and competitors are dedicating a significant budget for salesforce.
Long Term Strategy for Competing Effectively in the Region
“Drive organic growth to increase regional market share through superior marketing and value creation”
Allstar will export directly from the United States throughout period one to take advantage of the lower unit costs through economies of scale and asses Thailand’s market before catalyzing a local plant. In Period 3, Thailand will become the primary production source for the Asian region to reduce expenses incurred from shipping and tariffs. The home plant will only be used to cover any additional production. The production capacity will change to certain extents depending on regional demand. The market entry sequence is Thailand (Period 1), the Philippines (Period 3), China (Period 5), and India (Period 7).
Segmentation, Target, and Positioning
Segmentation: Thailand has a growing population of more than 66 million people. Around 20% of it is between 0 – 14 years and more than 70% is between the age of 15 – 64 years. Since its an emerging economy, people are very price sensitive. However, they care about the resulting effects of the toothpaste formulation.
Target: We have decided to target two main segments; the 15 – 64-year-old and the 0 – 14 year old, by introducing Economy, Healthy, and Whitening toothpaste solutions. The Economy and Whitening solutions cater to our 15 – 64-year-old segment and families that are more price sensitive. The Healthy solution is to meet the demands of our more health-conscious consumers and the 0 – 14-year-old segment.
Positioning: We markets all our product as the most effective toothpaste in the market for healthy gums, white teeth, and all-day 12-hour freshness. All three solutions will launch in a mint flavored paste for guaranteed freshness. The Healthy toothpaste will also come in strawberry flavor to appeal to our 0 – 14-year-old segment.
Segmentation: With a population growth of 1.9%, the Philippines is the fastest growing consumer markets in the region. 61% of the population is between the age of 15 – 64 years and 34.6%, is between the age of 0 – 14 years. People are extremely pricing sensitive as well as sensitive to the effects of the toothpaste.
Target: We will be targeting families in Philippines by providing two different solutions namely Economy, and Healthy in Small and Medium sizes. They will cater to the different needs of everyone in a family by providing a Healthy option for the children as well as an Economy solution for the parents and more price sensitive consumers.
Positioning: The All Smiles brand will market all of its products by defining the value-based price with a promise of effective results. Since Filipino is the country’s official language, we have decided to roll out advertisements in the Filipino language to increase local brand recognition and awareness.
Segmentation: China is the most populated country in the region with a GDP growth rate of more than 10%. As much as 73.6% of the population falls in the 15 – 64 year age group; 17.4% of the population is 0 – 15 years old and only less than 9% of the country’s population is 65 years and over. The people are price sensitive but demand superior effects.
Target: We have decided to target two main segments, 0 – 14 years and 15 – 64 years, by introducing only two solutions, Economy and Healthy, in multiple sizes. The Economy solution will be available in all three sizes to caters to the different needs of young adults and families who are relatively more price sensitive. The Healthy solution will only be available in two sizes, Small and Large, to meet the demands of our health-conscious customers.
Positioning: By introducing multiple sizes in both product categories, we aim to provide more value to our consumers. The Economy toothpaste will be for our price sensitive families and the specialized Healthy toothpaste for our younger, more appearance and health-conscious consumers. All our packaging and advertisements are in the local Mandarin language to increase brand recognition throughout the country. All Smiles has also planned to increase its sales force in China to cover such a large geographical area effectively.
Segmentation: India is the second most populated country in the region. India’s population is also young with 30% of India’s population is between the age of 0 – 14 years and 65% is between 15 – 64 years; only 5.5% of the population is 65 years and older. The country has widespread poverty, therefore the people are extremely pricing sensitive and a large part of the population lives in rural areas.
Target: To cater to such a young demographic, All Smiles has decided to enter this market with its low priced Economy and the specialized Healthy toothpaste solution. Since price sensitivity is extremely high and usage demands vary for everyone, we have decided to launch the Economy toothpaste in all the three sizes – Small, Medium, and Large.
Positioning AllSmiles will market its product in India for its superior quality and invest in increasing awareness through social media and tv advertisements. The company is also introducing a campaign to educate the children in rural areas about the benefits of maintaining oral hygiene as well as providing free mini-samples to familiarize the people with our product.
Period 3: Commence distribution operations in the Philippines and add whitening toothpaste to our Thailand line. Expected revenue in Thailand and the Philippines (See Exhibit A) is $98.8 mil. and $65.1 mil., while gross margins are expected to be around $18.7 mil. and $10.7 mil respectively. Annual marketing expenses will increase to $5.96 mil. for Thailand, and will be $1.58 mil. for the Philippines. In terms of gross margin, AllSmile’s operations are expected to bring in a net contribution of $21.86 mil. by the end of the third period. Based on an expected net contribution of around $15.91 mil. and the cumulative loss from the previous two periods, Allsmiles will make up around 28% of its losses from Period 1 and 2.
Period 4: No new markets will be entered. Thailand’s gross margin is expected to increase by 6.5% to $19.9 mil., while the Philippines’ would be $17.6 mil. Allsmiles is expected to cut down marketing expenses by 10% to $5.36 mil., to save capital in preparation for entering the Chinese market in period 5. After all overhead and administration costs, estimates show that total net contribution for the period should be $29.14 mil.
Period 5: Operations begin in China, with expected unit sales to be 300 from 5 SKUs. AllSmile will allocate $25 mil to the China marketing budget. We hope to breakeven in Chinese markets while retaining high profits from operations in Thailand and the Philippines.
Period 6: Marketing efforts will be flexible as AllSmile will continue to spend between $10 and $40 mil. depending on the success of advertisements launched in period 5. While making frequent responsive adaptations in previously entered markets and grasping adequate information on China’s market. AllSmile hopes to have the following market shares in each country by the end of period 6: Thailand: 36%; Philippines: 22%; China: 7%.
Philippine’s SKU Forecast:
Thailand’s SKU Forecast:
Country Attractiveness Spreadsheet
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