Global Application of Marketing Resources (GAMAR)

CALGOLIA INC.

CALGOLIA

A fictitious European company 3 product categories

Ovadols Squazols Trizols

United Kingdom Poland France Germany Italy

5 countries

15 Operational Marketing Units aka OMUs aka SBUs

We will have only 8!

SITUATION

Ms Sylvia Retchi, European Marketing Manager

New to the job What was the old way of doing business? What issues are confronting her? Answer:

Global allocation of marketing resources Global standardization vs local adaptation of Product, Price, Promotion Organization and application of peoples time

CALGOLIA Selected Marketing Strategy Issues

Allocation of Marketing resources

Management Time Consumer Marketing Trade Marketing

Global standardization vs local adaptation of

Pricing Product Specifications Consumer Marketing Trade Marketing

Organization & People

Management Team

SITUATION

Greater international co-ordination wanted 10 year planning horizon Goal:

Maximize shareholder value (Share Price Index)

CALGOLIA Levels of Strategy Employed

Top level objective

Maximize shareholder value (Share Price Index) Allocation of resources between

Portfolio Strategy

Products Markets

Product Marketing Strategy

Market Segmentation Product Positioning

CALGOLIA Marketing Analysis & Strategy

Market Analysis Competitive Analysis Company Analysis

COUNTRIES

PRODUCTS

CALGOLIA Market Analysis

PRODUCTS
Ovadols Squazols Trigols

CATEGORY SITUATION DIFFERENCE BETWEEN COUNTRIES COMPETITION CALGOLIA SITUATION

Current Size Stage in Life Cycle Long Term Growth

In Product Purpose In Consumer Prolfie In Price Levels In Trace Demand Number of Intl Firms Evolution Mkt Share of Largest

409 Maturing 6%
Moderate Moderate Low Moderate

233 291 High Growth Growth/Maturing 10% 14%

Low High High High Moderate Moderate Moderate Low

5 Stable 17% Strong 13.9% No. 2

3 Unstable 15% Strong 18.9% No. 1

4 Consolidating 13% Weak 7.5% No. 4

Reputation Mkt Share ($) Wwide Position

CALGOLIA Market Analysis

COUNTRIES
UK POLAND
38M Low Low 115 15% Moderate Low 12 2 10% Low Early Entry 15.6% No. 1

FRANCE GERMANY

ITALY

ECONOMIC SITUATION RELEVANT CATEGORIES COMPETITION CALGOLIA SITUATION

Population Income Level Trade Concentration Current Size (M$) Long Term Growth Price Sensitivity Sophistication Qty of Local Firms Qty of Intl Firms MS of Largest Price Pressure

History
Mkt Share ($) Overall Strength

57M Medium High 265 6% Low High 3 6 15% High Long Established 12.3% No. 2

57M 81M 58M Medium High Medium Medium Medium Low 152 214 187 10% 13% 11% Low Moderate Moderate High Medium Low 7 6 9 4 3 2 15% 17% 16% High Medium Low Long Long Recent Established Established Entry 10.4% 14.6% 13.5% No. 4 No. 2 No. 3

CALGOLIA Company Analysis-Marketing

PRODUCTS
Ovadols
Mkt Share (% of $) Revenue (%) CAM % Marketing Resources (%) CM/Total Marketing (%) Management Priority (%)

Squazols
18.9% 36% 41% 35% 62% 33% 15 40 30 23%

Trigols
7.5% 18% 13% 26% 67% 33% 40 20 30 19%

13.9% 46% 46% 40% 64% 33% 90 60 90 12%

Local Adaptation of: Product Consumer Marketing Trade Marketing Price Variation (%)

CALGOLIA Company Analysis-Marketing

COUNTRIES
UK
Mkt Share (% of $) Revenues (%) CAM (%) Marketing Resources (%) CM/Total Marketing (%)

POLAND
15.6% 15% 14% 14% 64%

FRANCE GERMANY
10.4% 13% 11% 16% 65% 14.6% 25% 29% 22% 64%

ITALY
13.5% 21% 23% 19% 65%

12.3% 27% 23% 30% 65%

CALGOLIA Company Analysis-Profitability

PRODUCTS
Ovadols
Revenues Contrib Before Mktg (CBM) Cosnumer Marketing Trade Marketing Contrib After Mktg (CAM) 100% 60.4%

Squazols
100% 68.0%

Trigols
100% 66.6%

14.6%
8.1% 37.7%

15.9%
9.5% 42.6%

25.6%
12.4% 28.6%

CALGOLIA Company Analysis-Profitability

COUNTRIES
UK
Revenues

POLAND
100% 60.9% 15.6% 8.9% 36.4%

FRANCE GERMANY
100% 64.7% 21.7% 11.5% 31.6% 100% 65.6% 14.7% 8.3% 42.6%

ITALY
100% 66.8% 15.4% 8.3% 43.1%

100% 62.6% 19.1% 10.4% 33.1%

Contrib Before Mktg (CBM)

Cosnumer Marketing Trade Marketing Contrib After Mktg (CAM)

CALGOLIA Summary of Analysis

Ovadols

Nearly half of Revenues and CAM Lowest growth opportunity Highest level of local adaptation

Except for Price

Lowest Marketing intensity as % of revenue Highest growth opportunity Strongest market share position Highest product standardization Highest consumer price satisfaction

Squazols

Trigols (Applicable)

Middle size and growth Weakest market share position Highest marketing intensity as % of revenue

CALGOLIA Summary of Analysis

Countries

UK & Germany have largest size Poland & Germany have largest growth opportunities

Price Pressures

CALGOLIA GAMAR3 Simulation

SOME NUMBERS

Budget

Between $45 MM and $150 MM Consumer and Trade marketing 360 Man-Months Fixed cost - not out of CAM

Management Time

Unit Variable Costs (UVC)

$100 for Ovadols $40 for Squazols $60 for Trigols

30% 30% (between lowest & highest of same product) $15 MM for a given product in a given country

UVC Increase for Max Local Product Adaptation

Max Price Differential

Max Consumer or Trade Budget

CALGOLIA GAMAR3 Simulation

YOUR CHALLENGE

69 decisions/period for 10 periods 10 possible tests per period

STRATEGY vs BUNCH OF DECISIONS vs EXPERIMENTATION vs RANDOM WALK

CALGOLIA GAMAR3 Simulation-Assignment

Marketing Plan (2-3 pages) addressing:

SITUATION

Brief overview:

Each product Each country

PLAN

In each area

What do you recommend (conceptually) What is your rationale Split between Consumer & Trade Marketing Pricing Application of Management Time Standardization vs Local Adaptation

Areas to address