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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
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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
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?
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.
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)
Brand Equity Index by Country Benefit Creative Price Sales Share of Brand Positioning Execution Positioning Leadership Mind Equity Argentina 71 100 83 33 39 65 Brazil 64 80 78 41 42 61 Chile 65 100 79 32 68 70 Mexico 61 100 70 68 50 71 BEI Country Indexes 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. Share of Mind– A combination of your relative awareness vs. the leading awareness in a category as well as absolute awareness. 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.
Brand Equity Index by Country Benefit Creative Price Sales Share of Brand Positioning Execution Positioning Leadership Mind Equity Argentina 71 100 83 33 39 65 Brazil 64 80 78 41 42 61 Chile 65 100 79 32 68 70 Mexico 61 100 70 68 50 71 Overall Brand Equity Index Product Standardization 78 Regional Diversification 90 Consolidated Country Brand Equity 65 Overall Brand Equity 73 Exception Analysis – Identifying Opportunities BEI Country & Overall Indexes Country & Overall BEIs should be > 70 for Marketing Differentiation Advantage
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?
